Friday, December 7, 2012

December 7, 1941 and the Attack on Pearl Harbor ... Making Labor Law History in Michigan ... Self Governance is Alive and Well ... The Indiana Example

{NOTE: Thursday evening both houses of the Michigan Congress approved right-to-work legislation. The Governor also said he'll sign the bill into law. Thus, right-to-work will be the law in Michigan, and employees will have the right to decide whether to join the union or not.}


Preliminary Thoughts ... We the People and Democracy

Today is December 7th. Pearl Harbor was attacked on this day in 1941. We went on to lead the free world to victory by defeating Hitler. Of course, the Cold War with Russia followed. We won that one, too. But let's talk about domestic affairs today and our self governing federalist system.


Our 50 states are in fact individual laboratories of our unique system of governing in America. This self governance allows us to see what works and what doesn't work so well. It also enables us to change what needs changing after experimentation and healthy political debate.

We must never waver in the believe that this federalist system of self governance is a large part of what makes our country strong and our citizens free and prosperous.

The debate taking place in Michigan concerning the rights of individuals over the power of unions is yet another example.


The UAW has been a big player in Michigan politics and the U.S. as well.

It in effect has operated as a labor monopoly representing the Big Three's (GM, Ford and Chrysler) hourly automotive employees over the years. As a labor monopoly, the UAW contracts were the same across all three companies and thereby made labor productivity, including wages and benefits, a non-factor in the U.S. auto industry.

Of course, that was before Honda, Toyota and others started up non-union facilities in other parts of the U.S. Thereafter the market shares of the Big Three tumbled, their profitability struggled or disappeared, and things were forever changed in the industry. Except for the UAW continuing its stranglehold in Michigan.

So now the city of Detroit, the state of Michigan and tens of thousands of current and former employees of these companies and their affiliates are struggling to stay in the game. Meanwhile, Indiana and Tennessee are winners, and lots of other right-to-work states are winners as well. But not Michigan.

So what to do? Right to Work in Michigan makes a great deal of sense, but not to the UAW, of course. {For an update on the developiong story, see also Push to Curb Union Power Advances in Michigan.}

"Unions lost big in Michigan in November when voters rejected Proposal 2, Big Labor's plan to canonize collective bargaining in the state constitution. Now they are facing a backlash with the happy possibility that Michigan could become the 24th right-to-work state. . . .

Meanwhile, the economy has languished. Michigan is the fifth most unionized state in the country and the birthplace of the UAW. According to the Mackinac Center for Public Policy, Michigan has lost 7,300 jobs since January, while next-door Indiana, which became a right-to-work state earlier this year, has been on the upswing.

According to the Indiana Economic Development Corporation, the state has a record number of businesses choosing to expand or set up in the state, including Amazon and Toyota. The 220 companies will create some 21,000 new jobs and invest $3.6 billion. The growth has come despite a decrease in the average tax incentives offered by the state to $8,900 from around $37,000 in previous years.

Republicans hold a 26-12 majority in the Michigan Senate and a 64-46 majority in the state House. {NOTE: Bills approving the right-to-work legislation were approved in both the Michigan Senate and House Thursday evening.} According to a recent poll by Mitchell Research & Communications for a right-to-work advocacy group, 51% of Michiganders support a right-to-work law while 41% are opposed.

That's important because . . . unions could still try to repeal it on the ballot, as they did this year with the emergency manager law, which let the Governor appoint emergency financial managers who could redo collective-bargaining agreements. . . .

AFL-CIO El Supremo Richard Trumka has said that politicians who oppose Big Labor would "pay a steep political price" but it's not turning out that way. In Indiana, Republicans picked up nine seats after the right-to-work law passed and lawmakers who made the law a key part of their agenda won by wide margins."

Summing Up

Michigan is the home of the UAW and has long been the bastion of big labor.

Unions destroy jobs. Most of us know that. The U.S. auto industry in Michigan is proof positive of the harmful effects of big labor.

Considered as a whole, unions reduce the total payroll and size of the state's workforce. That's harmful to the state's citizens, its economy and tax base.

As unions introduce uncompetitive work practices and bargain for all the pay and benefits they can get at any point in time, jobs are forfeited to those companies who have a more productive and all-in labor cost competitive work force.

The more productive company wins, and that's almost always the non-union company. As President Obama likes to say, it's just math.

And if you doubt that even one little bit, look at what's happened to the Big Three auto companies and the UAW in Michigan in the past 30 years.

In Michigan the UAW's auto industry monopoly has helped to make a financial basket case out of the auto companies.

It's no wonder that Indiana, Tennessee and other right-to-work states are doing so well now.

Neither is it a surprise that today a historically heavily unionized state like Michigan has more citizens in favor of right-to-work legislation than those who are opposed to it.

For the sake of Michigan's citizens, communities and the state as a whole, this right-to-work movement should have taken place many years ago, but politically it was a non-starter.

But now things have changed, and one thing has changed the most. And what's that?

Well, as President Clinton might say, "It's the economy, Stupid!" And so it is.

Thanks. Bob.

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