As protests and pepper spray filled the lame-duck air in Lansing, the Michigan State Legislature cleared a series of bills and Gov. Rick Snyder signed them into law. HB 4003 (pdf), and SB 0116 (pdf) aim to fulfill a long-standing dream of a conservative Jack finally bringing down the giant Union from the beanstalk.
And as you can see in this video of the Lansing protests by James Lefler of the VanKal Tea Party, Michigan is about to begin a journey into a series of cheap and tasteless shots at each other, all for agency fees (commonly called union dues) for negotiation and collective bargaining that helps all workers in the state.
There are two components to this push for right-to-work laws. One is to provide government and citizens the ability to establish a zone in which a right-to-work environment may exist, and the other is to address the definition of a public employee and the rights afforded them in terms of collective bargaining and agency shop fees.
For a right-to-work state, you can choose whether or not to pay agency fees for jobs that secure a strong working-class wage. Without these union dues, there is additional pressure upon unions to negotiate more for even less. The question we should ask isn’t whether or not we need unions. We need to ask ourselves if our economy can boost jobs with the status quo (once a strange conservative concept), or if we need to change the game and the landscape of labor. But since 80% of the Michigan job market is already non-union, what’s the real scope of gain here? Is it for the public sector contracts (except for police and fire), or the private sector contracts to shave off a few dollars per worker?
I don’t have a problem with letting a local community decide. I do, however, reserve a sense of suspicion for Detroit residents who may find themselves in a managed bankruptcy. After all, a managed bankruptcy voids contracts and opens the door for negotiations under the new law. Even recently signed union contracts could go out the window, especially in the wake of the Consent Agreement and the repeal of PA 4.
A real-life economic example of right-to-work is in the grocery war. The Meijer vs. Wal-Mart SuperCenter battle is already underway. In Troy, a Wal-Mart SuperCenter is under construction on Maple, and the 14-Mile Meijer SuperCenter is about to get a taste of competition. For those who keep up with grocery in general, it will mean a battle between a non-union warehouse and a union warehouse. Prices on both sides will be low, which benefit the consumer, but also affect the workers on both sides of this economic experiment. Within one square mile, two SuperCenters will produce balance sheets that will show why non-union stores often win in the long run, because they pay less for their labor. And it’s sorta ironic that Wal-Mart’s “pro-associate” mantra is similar to the current PR of “pro-worker” that the governor uses so often.
The question is new growth, however. And as I sympathize with the union workers, and anyone undercut by this recent law, we have to ask what risk and what reward we gain for eliminating union dues that have (for decades) helped secure jobs and pay for the state (and at times almost to fiscal default). We need new jobs, and we need investment. But should workers risk so much against a faceless company, especially when they really have little leverage on their own (as “Freedom-to-Work” suggests)?
With right-to-work, you should expect wages to decrease across the board, and jobs to increase in proportion to the amount of the reduced salary. Let’s be clear, it will reduce unemployment. But it will also lower wages to compensate for the added jobs, and basically take all the gains and efforts of a union and disperse them to others.
Elimination of agency fees won’t solve the problems we’ve carried for decades. A vertical market with a vertical labor pool is why we fell so hard and so fast during the Great Recession. The impact of a right-to-work law isn’t as extreme as labor suggests, but it does reflect how desperate we are to reduce our unemployment at the cost of wage earners who support our economy.
Maybe our mix of labor talent is flawed for the current economy, but instead of adjusting for education, we force unions to take a pay cut? By trying to sell this as “Freedom to Work,” it shows that they know there’s a consequence they won’t say out loud.
It’s strange to see this from a detached point-of-view, that those who abhor redistribution are legislating redistribution with glee. Right-to-work forces unions to continue negotiations while not receiving any fair value for that negotiation or legal backing for those wronged by a company. Joe the literal trade union plumber is punished in the same way as a rich man is burdened by a tax increase. And despite the rantings of people about $50,000 per hour jobs, some trade unions are reasonable, and they suffer the same at $17.29 per hour at a fair wage as any forklift operator earning $37.29 per hour to move pallets.
For the unions, there’s no other way to slice it. The impact of the recession leaves you holding the bag. Even Keynesians notice that in times of poor economy, you have to take a wage cut in order to preserve the jobs you have. This can’t be avoided. Detroit’s obese infrastructure is the best example of how to destroy a city from within, and when the state starts considering a managed bankruptcy as the viable option, you know the public union contracts are on the block as well, and contract renegotiations will likely reside with a state-appointed EFM, now armed with a right-to-work clause.
Some proponents of right-to-work believe that business will just pour in because they still believe unions destroyed the economy. Some cite Indiana’s passage of a right-to-work law as some magical bean of commerce, or Oklahoma’s unemployment rate (while ignoring the energy boom).
Truth is, the biggest influence on jobs are tax abatements, tax credits, developed infrastructure, and political payoffs. Companies love to entertain multiple cities and force them to develop infrastructure or provide tax credits even before a shovel hits the ground. PA 198 of 1974 (pdf) provides a lot of incentives already, and attracting or maintaining business already seems to cost a pretty penny. The Michigan Economic Development Corporation (MEDC) is pouring money out the nose to attract business to the metro region, and brownfield credits are going out the door in desperation.
We should be aware of the ways that we’ve already addressed economic stimulus via legislation. I’m not against many ways of helping increase commerce, but we’re getting to a point where the economy takes a back seat to politics, and the promises of employment that aren’t guaranteed.
Is this why we go with right-to-work legislation in a lame duck session, eliminate a legitimately fair way to provide unions fair compensation for relentless work that supports workers? Is it to solve the vertical market and vertical labor pool? Is this the only way to broaden our labor market?
We’re not focused on manufacturing, growth, or new economy. We’re focused on cutting the balance sheets to survive, and hoping that companies hire more workers instead of pay out profits to stockholders. In fact, that’s what companies are supposed to do, so why do we think jobs will appear from corporate savings on labor?
And maybe that’s the real problem we need to face. The benefit of a corporate/labor system was to ensure both sides were equally matched. It kept growth stabilized, but also kept labor with enough income to retain upward mobility. And with right-to-work, we assume that all rights for workers will be upheld, regardless of the actual cost to the unions.
In adopting right-to-work, we adopt the idea that a corporation will negotiate with a single worker. I have enough trouble calling my Internet provider when service goes down for a day, and I pay them.
I support right-to-work in terms of how it is decided by the local community. But I do not subscribe to the nonsense of how we’d be better off on our own instead of in numbers when dealing with a corporation. I also do not support the governor who never mentioned this part of his master fiscal plan until last week.
I seem to remember a lot of other things that I agree with, and to be honest, right-to-work wasn’t one of those integral parts to growing the state’s economy. And now, it tarnishes a nerd who got snookered by his political 2014 backers and what I can’t describe as anything but retribution for Prop 2.
Blaming Prop 2 is fine. But this action overstates the reason why Prop 2 failed. Prop 2 was about the Michigan Constitution and people from both sides who thought that proposals permanently amending the state constitution were stupid. Those who didn’t want union dues in the Michigan Constitution weren’t just rabid anti-union people. There were moderates as well who voted against Prop 2, but hardly fans of right-to-work.
So when I hear Gov. Snyder say he’s not against unions, but sets the table for the elimination of their influence, I feel like 2014 just started. I’m not as upset at the idea of right-to-work as the way they tried to sell it, pass it in a lame-duck session, and then act like this wasn’t against unions, or political payback. I thought this governor was above it, but then again, re-election comes to mind.