Public employee unions, the last bastion of an American labor movement in decline, are facing the fight of their lives this year as strapped state and local governments seek to permanently downsize their pensions, pay, benefits and bargaining rights. Powerful unions such as the National Education Association (NEA) and the American Federation of State, County and Municipal Employees (AFSCME) have been bruised in battles with Republican governors and legislators in Ohio, Wisconsin, Indiana and other states that are grappling with record budget shortfalls and fighting to stave off insolvency. Even where state governments are controlled by Democrats, public employees such...