December 11, 2012
-- by Dave Johnson
Pay attention to what is happening in Michigan, because it will add downward even more pressure to your wages and benefits, wherever you live and work. Republicans in the Michigan legislature have rammed through anti-union "right-to-work" laws making union dues voluntary even as unions a required by law to provide services to members and non-members. They say this will make Michigan more "business-friendly" by driving down wages and benefits, thereby stealing jobs from states where working people have rights. The actual intent is to get rid of the unions altogether, and their ability to fight for the 99% in the ongoing class war with the 1%.
What Are So-Called "Right-To-Work" Laws?
"Right-to-work" means the right to work in a unionized business thqt has a negotiated contract without paying dues to the union.
The 1947 Taft-Hartley Act allows states to prohibit unions from collecting fees from non-members or making union membership mandatory, and states that do this are called "right-to-work" states. So-called "right-to-work" laws prohibit labor contracts from requiring employees who are covered by the contract to pay dues to the union that won the contract. But the unions are still required to represent every worker who is covered by a contract -- even workers who are not members of the union and do not pay union dues. This costs money, so the union is drained of funds and power, thereby weakening their ability and incentive to fight for better wages and benefits.
Stealing From Other States, Lowering Wages And Tax Revenue
The appeal of these so-called "right-to-work" laws is that by weakening the ability of workers to band together and fight for better wages and conditions, they result in lower wages, benefits and safety standards. This is supposed to make these states more attractive to employers, which then brings jobs to the lower-wages states as employers leave states where worker have rights.
This affects wages across the larger economy. Any jobs that do move to these states come from other states. So in the larger economy of the country the effect of these laws is to shift wages, benefits and safety standards downward. This brings pressure that forces all wages for all employees down, which further lowers the country's tax base, reducing the entire country's ability to educate, maintain and modernize infrastructure, etc.
As jobs shift to lower-wage states, pressure to lower all wages increases, and the collection of income tax revenue decreases. The ability of consumers to make purchases decreases as well. Infrastructure investment declines. Education declines. Over time the country falls behind the rest of the world and it become more expensive and more difficult to catch up.
Or, in other words, exactly what we are seeing all around us now.
Studies Of The Effects
A May, 2011 Bureau of Labor Statistics study found that "right-to-work" states have lower wages (examples: 9.4% lower for all occupations, 11.4% lower for teachers) than states with union rights.
A January, 2012 study by American Rights at Work, New Research Counters Arguments for “Right-To-Work” Laws, examined a number of studies and found that "recent studies rebut claims of economic growth and instead find that laws suppress wages."
In Nonunion Wage Rates and the Threat of Unionization Henry Farber, Professor of Economics at Princeton University found that after Idaho passed a RTW law in 1985, there was a statistically-significant drop in nonunion wages relative to other states.
Feb, 2011, Economic Policy Institute (EPI), Does ‘right-to-work’ create jobs? Answers from Oklahoma,
Despite ambitious claims by proponents, the evidence is overwhelming that:
• Right-to-work laws have not succeeded in boosting employment growth in the states that have adopted them.
• The case of Oklahoma – closest in time to the conditions facing those states now considering such legislation – is particularly discouraging regarding the law’s ability to spur job growth. Since the law passed in 2001, manufacturing employment and relocations into the state reversed their climb and began to fall, precisely the opposite of what right-to-work advocates promised.
• For those states looking beyond traditional or low wage manufacturing jobs – whether to higher-tech manufacturing, to “knowledge” sector jobs, or to service industries dependent on consumer spending in the local economy – there is reason to believe that right-to-work laws may actually harm a state’s economic prospects.
Sept, 2011, EPI, ‘Right to work,’ The wrong answer for Michigan’s economy, findings included,
• Right-to-work laws lower wages—for both union and nonunion workers alike—by an average of $1,500 per year, after accounting for the cost of living in each state.
• Right-to-work laws also decrease the likelihood that employees get either health insurance or pensions through their jobs—again, for both union and nonunion workers.
• By cutting wages, right-to-work laws threaten to undermine job growth by reducing the discretionary income people have to spend in the local retail, real estate, construction, and service industries. Every $1 million in wage cuts translates into an additional six jobs lost in the economy. With 85 percent of Michigan’s economy concentrated in health care, retail, education, and other non-manufacturing industries, widespread wage and benefit cuts could translate into significant negative spillover effects for the state’s economy.
On CNN this morning UAW President Bob King explained that this bill threatens worker rights. "It demonstrates to workers and really a broad spectrum of the populous that we have to work hard, we have to fight hard to protect our rights." Explaining that workers already have the choice to join a union, King said,
"You don't have to be a union member. But you have to pay your fair share. Just like if you live in a community, you pay for your fair share of the road cleaning, of the police, of the fire," King argued. People who benefit by [the union's] collective bargaining benefit by this procedure. They pay a fair share of the cost of representation."
Steelworkers leader Leo Gerard called on Michigan governor Snyder to veto the law, (click through for the entire statement)
“The USW active and retired members join other unions and allies in Michigan and across the nation to call on Gov. Snyder to support the proposal of the state’s Democratic congressional delegation. We ask the Governor to use his veto power to stop this unnecessary and divisive right-to-work bill.
“If the Governor feels this bill will move Michigan forward, he should delay the final legislative votes and allow an amendment that would put this issue before the public as a state ballot initiative. We urge Governor Snyder to delay his signing of the bill. Let the people of Michigan debate and vote on a consequential matter that will affect all working families.
“We know the newly-elected Michigan state legislature convening early next year has added Democrats that would reject a right-to-work-for-less bill. Right-to-work is only supported by millionaires and billionaires who profit by taking more money out of the workers’ pockets.
Demonstrations and Disruptions
In a sign of things to come, 12-15,000 people demonstrated today at Michigan's capitol building. There were confrontations, including mounted police charging into the crowd. Former Congressman Mark Schauer was pepper-sprayed.
Ned Resnikoff, writing in, Michigan passes ‘Right-to-Work’ but fight isn’t over at the Ed Schultz website,
Shortly after noon on Tuesday, Michigan’s Republican-controlled House of Representatives gave its final approval to the state’s hotly contested “right-to-work” legislation, as thousands of the bill’s opponents rallied outside. But labor activists and their allies say that the fight isn’t over yet, and they’re already plotting their strategy for keeping Michigan a union stronghold.
“This fight is not over by a long shot, regardless of what happens today,” said Zack Pohl, the executive director of Progress Michigan.
Mary Bottari at PRWat: Michigan Passes "Right to Work" Containing Verbatim Language from ALEC Model Bill
AFL-CIO 'Right to Work' for Less fact sheet.
Economic Policy Institute, Unions and Labor Standards, a collection of articles, posts and studies of the effects labor and anti-labor policies.
Nicole Pasulka at Mother Jones, Right-to-Work Laws, Explained
Josh Eidelson at Salon, Koch brothers, Tea Party cash drives Michigan right-to-work bill
Amanda Terkel at Huffington Post, Big 3 Automakers Reportedly Worried About Michigan Right To Work Legislation
Teamster Nation: RTW passes in #MI as thousands try to enter Capitol
OurFuture post on being "business-friendly, China Is Very “Business-Friendly”,
China is very, very “business-friendly.” Corporate conservatives lecture us that we should be more “business-friendly,” in order to “compete” with China. They say we need to cut wages and benefits, work longer hours, get rid of overtime and sick pay — even lunch breaks. They say we should shed unions, get rid of environmental and safety regulations, gut government services, and especially, especially, especially we should cut taxes. But America can never be “business-friendly” enough to compete with China, and here is why.
Posted by Dave Johnson at December 11, 2012 3:42 PM
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