Saturday, June 16, 2007

Making Michigan a Right-to-Work State

From Larry Reed's (president of Michigan's Mackinac Center for Public Policy) editorial in today's WSJ "It Takes a Recession" (subscription required):

Why is the basic truth, that unions are part of the state's economic problem, now coming to replace the notion that they are the state's salvation? A 2002 study from the Mackinac Center for Public Policy gives us a little hint. The study found that from 1970 to 2000, right-to-work states created 1.43 million manufacturing jobs. At the same time non-right-to-work states lost 2.18 million jobs. Not surprisingly, heavily unionized Michigan was near the bottom of the pile.

Michigan lost a quarter million jobs since the start of this decade. Unemployment is the highest for any state in the country. And while inflation-adjusted per capita personal incomes grew nationally by 4.2% since 2001, in Michigan they have fallen. Over the same period, real per capita GDP grew by nearly 9% nationally and declined in only one state -- Michigan. High-profile companies like the Big Three auto makers, Pfizer and Comerica are slashing workforces or moving operations out of state. Tax revenue is down and the state budget is hemorrhaging red ink.

Michigan's "economic development" efforts have obviously flopped, and for largely the same reason that a bad restaurant can't turn itself around by offering discounts or subsidies to a handful of customers. It must change the menu for everybody.

The state has tried to stop the bleeding with expensive TV ads featuring Michigan-born actor Jeff Daniels spotlighting the state's corporate welfare. But what's really dumb and getting dumber is the persistent reluctance of the administration of Democratic Gov. Jennifer Granholm to tackle the union issue, even as signs swell that the public is ready for a sea change. Her strategy is to sweep aside any suggestion for labor reform and lobby instead for an unpopular, job-killing tax increase and a billion-dollar hike in state spending.

Making Michigan a right-to-work state would quash with one powerful blow the nagging perception that our labor climate is too hostile and costly for business. It would provide more freedom for individual workers and a temporizing influence on union leadership.


At 6/16/2007 9:36 AM, Anonymous Anonymous said...

Reed distorts and then reaches unsupportable conclusions I.e. Comerica misrepresentation. To subject your students to this is egregious. This is hardly something for reputable teachers to do-SAD.

At 6/16/2007 5:03 PM, Blogger happyjuggler0 said...

Excellent post. It is astonishing how much MI is in denial. Raising taxes when you are bleeding jobs? Raising spending when your revenues are dropping? Are you insane?

The right to work states vs unionized states stats are spot on, a staggering contrast in manufacturing job action. I would only point out that it costs MI and other unionized states service jobs too. When the state's motto is effectively profits are evil, let's take them all, who would open up a new business there when they can open up someplace that actually wants them to create jobs in their state? No profits equals no reason to open up business, thus no profits equals no jobs.

At 6/17/2007 8:18 AM, Anonymous Anonymous said...

It's a misconception that right-to-work states don't have unions. Workers just aren't forced to join unions as a condition of employment.

As a union representative, I sometimes (well, oftentimes) clash with the direction the leadership wants to take us. To remain a useful tool for workers, unions must change with the times and give companies a reason to make new investments. We can't operate in the 21st century like we have in the past and expect to survive. For just one example, instead of banning imported cars from our parking lots (whatever that is), we should be asking their owners what it would take to get them to buy GM products. Focusing on problems and trying to address them is far more productive than trying to find scapegoats.

Unions do not have to be eliminated for a company to be successful, but they have to focus on a less adversarial role and use their collective power to benefit the company as well as themselves. Teamwork appears to be the way to do business now, and the teams (unions) are already in place, so why break them back up instead of changing their mission?

At 6/19/2007 8:07 PM, Blogger skh.pcola said...

happyjuggler, why would you "...clash with the direction the leadership wants to take us"? You just said it right there..."[company] leadership". Why do you suppose that you (or your anti-capitalist union) should have any influence on your company? If you don't like what they're doing, go start your own. If the capital investment is prohibitively high, then quit that job and go find another with a company that mirrors your own ideological biases.

Why do you union thugs insist and kvetch about companies running their businesses in a way to maximize shareholder value? You are (collectively--unions) part of the problem, not part of the solution. The US is not a subsistence economy where there are scant jobs for laborers...your time is past.


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