Until recently, a lot of people in America probably thought that labor unions were basically extinct. Then last month, Wisconsin’s Republican Governor Scott Walker introduced legislation in his state that would drastically curtail the power of public employee unions by eliminating their ability to collectively bargain. Teachers, firemen, and other public employees — along with their supporters — took to the streets and the Democratic opposition in the state senate decamped to Illinois to prevent a quorum. Suddenly, unexpectedly, people are not only talking about unions again, but most of them are saying nice things.

Jim Schmitz is director of organizing for the American Federation of State, County and Municipal Employees (AFSCME) union, the big public-sector union at the heart of the crisis in Wisconsin. Although the Democrats are now heading back to Madison for the vote, the labor debate is far from over. Fortune caught up with Schmitz last week for his thoughts on the future of the labor movement and how it’s been buoyed by Walker’s proposal.

Has AFSCME thought about giving some kind of an award to Governor Walker?

I’m not sure we’re ready to give him an award but I think what he has done not just in Wisconsin but across the country, is expose the extremist agenda we see in these state capitals. It is an agenda that wants to shrink the public sector, that wants to diminish the power of workers and their unions. It’s not about the budget and it’s not about finances. It’s about trying to settle a political score. It’s about trying to silence the collective voice of people working for state government.

Now that that agenda is public, people are starting to take notice. When I saw the WSJ/NBC poll that found 77% support for public employees having the right to bargain for healthcare, pension and other benefits — I can’t remember anything polling at 77%. I don’t think there’s been as much talk in the news about union rights since the PATCO strike [by the air traffic controllers union] in the 1980s, which was kind of the opposite story for us.

In fact PATCO was a disaster for the unions. Do you see Wisconsin as a different kind of watershed event?

It does almost seem to be the flip side here. Many of us thought the PATCO strike was ill-advised, that it maybe was based on some kind of overconfidence on PATCO’s part. They certainly didn’t have public opinion on their side. President Reagan took care of them in short order. Governor Walker never campaigned on this issue. He wasn’t on the stump saying, “The first thing I’m gonna do is abolish bargaining rights for state employees.” I think he’s operating out of overconfidence perhaps much as PATCO did back then.

Are the unions making plans to capitalize on their sudden popularity?

I don’t want to share any particular plan, but there was a meeting last week of the AFL-CIO executive council, and the executive council organizing committee met as well. There was consensus that there is an opportunity here to unite workers around some broad themes, and there are plans afoot.

Isn’t it sort of ironic that this epic showdown is occurring in the public sector? I thought it was supposed to be easier to bargain with states and municipalities than with private employers.

There’s no question that in years gone by, private employers fought harder when they didn’t want a union. But if you get someone who is an ideologue like Walker, he and his allies in the legislature have a hell of a lot of power. My sense is that in my lifetime — and I’m 55 ears old — even the Republican folks who didn’t favor unions understood there had to be some kind of balance. That seems to have gone out the window. It’s all about shrinking the public sector using any means possible.

Before this whole budget repair bill of Walker’s was proposed, he had passed a bill through the Republican majority in Wisconsin that required a supermajority to increase any tax or fee. He’s making it harder to balance the budget while he’s saying you need to cut to balance it. People forget we live in a new world. We’re spending $11 billion a month to fight wars in Iraq and Afghanistan. Somebody’s got to pay for that. I was a little shocked that there wasn’t a larger hue and cry back in September, when the tax cuts were extended. Where’s the patriotic duty of the super rich to support these wars in Afghanistan and Iraq?

Also on Fortune.com:

• Two governors. Two parties. One solution.
• Are public unions our convenient economic scapegoats?
• ‘Low risk’ alternatives for public pensions?