Tuesday, December 11, 2012

Michigan: Right to Work State?

My home state of Michigan is in many ways ground zero of the modern industrial labor union movement. Even as unions have lost ground nationwide and been all but outlawed in the South, unions in Michigan have persevered even though they have but a shadow of their former strength and militancy. Roughly 18% of Michigan workers belong to a union. In some respects the union movement is on life support. But if there's one thing the Republican establishment agrees on it's dislike of unions. So the Republican dominated House and Senate passed bills that would establish Michigan as a "right to work" state. Michigan governor Rick Snyder, who had previously cast himself as a moderate technocrat and said that he thought such legislation was divisive and not very useful to the Michigan population, has done a 180 and said that he could sign the measures into law as early as today.

So what brought us to this point? Well a lot of different things actually. You can't just point to one item. There has always been a struggle between labor and capital simply because the interests are different. If capital could go back to the bad old days of the 1920s or before when they had no unions, compliant politicians, non-existent worker protections and virtual immunity from legal consequences they would do so. If labor could get back to the 1950s when they had strong large popular unions they would do that as well. But the proximate cause of this fight is strangely enough not something in Michigan at all. Michigan unions, and their supporters, deeply worried about labor rights in the wake of Wisconsin governor Scott Walker's successful trimming of labor protections in his state, backed an amendment to Michigan's Constitution. This Proposal 2 would have enshrined labor rights in the Constitution by guaranteeing public and private sector employees the right to organize and collectively bargain for wages and benefits. This was decisively rejected at the polls.

Well as the saying goes, elections have consequences and payback is a muyerfuyer. Republicans saw the Proposal 2 amendment failure as a shot across their bow that had to be responded to, proof of union weakness or as the excuse they needed to implement long desired ideas. So that's how we arrived at this point. Republicans are in the majority. Majority writes the rules. It's been called a lame duck majority because when the new members arrive in the next session there won't be quite as many Republicans and/or possibly not even the support for "right to work" legislation. But just as Scott Brown's election didn't stop the PPACA, Republicans similarly intend to work with the numbers they have while they have them. Ironically Scott Walker says he has no interest in "right to work" legislation.

So what is "right to work" legislation? It's quite simple. It plays on people's financial incentives and uses the free rider problem to destroy unions. When a union is established in a given arena it has to represent everyone in that workplace, whether they joined the union or not. It can't restrict higher wages and better benefits only to union workers. It can't force union membership.It would be a good thing if the union could restrict better wages to those who joined the union but that's against the law. Certainly no employer would ever go for that. So as a result unions have to have a method by which to ensure that there is some ability to ensure that everyone in the workplace has some skin in the game. For union members this is where union dues come in. For non-union members this is where "fair share" provisions come in. These monies are part of what allow the union to continue to exist and have the wherewithal to fight back against management overreach, whether that is in court or simply by organization and communication among workers.

"Right to work" legislation strips unions of the ability to obtain monies from people in a shop where there is a union. This sounds good no? It's expanding the worker's choice no?
Not really. This means that everyone, union worker or not, then has a MASSIVE incentive to withhold dues or fair share provisions because they get the benefits of union representations without the costs. Over time the union can't economically function with all the free riders and can't legally or politically function with smaller and smaller membership. So goodbye union. In other arenas people understand the free rider problem.
This is no different from giving someone like me the option to withhold taxes from the US government because I am bitterly and profoundly opposed to its foreign policy. I have no intention of leaving the US and going to live in another country. I just don't want to pay taxes. If everyone did that the US could not continue to exist. Now unions aren't nation states but the concept is exactly the same.
Do "right to work" states have better economic outcomes as companies that were avoiding the state because of grasping, overreaching unions, come flooding into the state?
The evidence seems to say no those "right to work" states aren't better off. "Right to work" states are associated with lower income and higher numbers of uninsured people. If you want a low wage state with fewer worker protections, then by all means support "right to work" legislation.
And this soon to be law can't be overturned by referendum because the Republicans were smart enough to add appropriations to the bill. Under Michigan's constitution, doing that means that the law is not subject to referendum of the people. Assuming that Governor Snyder signs the legislation, the only way to overturn it would be to replace Snyder and a sizable number of Republicans in 2014. So we're living in interesting times in Michigan.

1) Do you support Right to Work legislation?
2) Do you live in a Right to Work State?
3) If Snyder signs the bills, what should the response of the labor movement be?
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