The Michigan legislature and Governor Richard Snyder passed a new “right-to-work” law on December 11, 2012. Such laws, authorized by the anti-labor Taft-Hartley Act of 1947, allow states to prohibit union locals from requiring workers who choose not to join the union that represents them at the work place and who receive union services from having to pay for them.
Social scientists refer to the dilemma this creates as the “free-rider” problem. Why pay for bargaining and negotiation, support for worker grievances, and other services if you can get them free? In the long run, supporters of right-to-work laws hope to reduce union membership and weaken organized workers as an economic force in the workplace and a political force in the electoral arena.
The Michigan Governor reversed his earlier declaration that he would not support this controversial legislation. Michigan is a state where the modern labor movement was formed in the 1930s during the sit-down strikes in auto plants. Indiana Governor Mitch Daniels also promised labor leaders that he would not support such legislation. They both changed their minds because the prospects of defeating labor at this critical juncture seemed too good to miss. So Michigan, like Indiana, dusted off its copy of the American Legislative Exchange Council (ALEC) model legislation and passed it.
As the Economic Policy Institute states, right-to-work provisions have negative consequences for workers. In right-to-work states workers earn significantly lower wages than workers in states without such laws. Also, they are less likely to benefit from employer-sponsored health insurance plans. Some studies note that health and safety at workplaces in right-to-work states fare poorly compared with workers in states without such laws. In short, Section 14 (b), the right-to-work provision of the Taft-Hartley Law of 1947, was designed to weaken the burgeoning new and militant labor movement of that day and as a result to increase corporate rates of profit.
On December 12, Indiana Governor Mitch Daniels (soon to be Purdue University president) announced that nine companies were “expected” to make investments in his state creating 2,552 new jobs. These included such companies as Angie’s List, BidPal Inc, and Mitsubishi Engine North America. The Indianapolis Star indicated that the nine companies who “expect” to add these jobs by 2016 will receive over $27 million in tax credits. It was likely that the Daniels announcement was designed to support Michigan Governor Snyder’s claim that he was inspired by the alleged economic boom Indiana experienced since adopting right-to-work legislation last winter.
Governor Daniels indicated that “…we have seen a significant surge of new interest in the past several months.” Again, Governor Snyder was inspired by the Indiana story not because of the tax giveaways but because he claimed it was Indiana’s right-to-work law which was passed ten-months ago that spurred this “economic miracle” in the Hoosier state.
In a recent article on the Economic Policy Institute (EPI) website written by political scientist Gordon Lafer, economist Marty Wolfson, and Indiana state AFL-CIO President Nancy Guyott, it was pointed out that investment decisions require a lengthy process of study. Since the law was passed last January, became effective in March and is being challenged in court, the authors argued, it was unlikely that the new law would have affected decisions to invest in Indiana.
Further Lafer, Wolfson, and Guyott point out that none of the nine companies the Daniels’report referred to claim that the new right-to-work law had anything to do with their plans to invest more in the state. Some of the nine already had major facilities in the state. In addition, the authors examined companies that were courted by the state but chose to go elsewhere. Their research indicated that right-to-work was not a criteria for choosing before 2012 to invest in other states.
Perhaps the most significant facts gleaned from recent research on the Indiana economy were published by the Indiana Institute for Working Families in their study entitled “Status of Working Families in Indiana, 2011.” (http://www.incap.org/statusworkingfamilies.html). Among their key findings are the following:
- the state had 231,500 fewer jobs as 2012 began than pre-recession employment.
- 21,200 state and local government jobs were lost from August, 2008 through February, 2012 (22 percent of jobs lost).
- in 2012, 19 percent of unemployment is among youth.
- Indiana is among 17 states continuing to experience absolute declines in the labor force since the recession began.
- only 14.6 percent of Hoosiers over the age of 25 have bachelor’s degrees.
- Indiana ranks 41st in average wages earned; economic inequality in the state has grown since 2000 but worker productivity has increased by 14 percent.
- median family income fell by 13.6 percent over the past decade.
- since 2000 poverty has increased by 52 percent.
The figures on the devolution of the Indiana economy over the last decade, as its state government has shifted to the right, are staggering. This is the model to which the Michigan Governor and legislature aspire.
Several conclusions can be drawn from the data and the contemporary political context in the industrial heartland of America.
First, economic decline has been a characteristic feature of workers’ lives before, during, and since the recession.
Second, during much of the last decade, particularly in states like Indiana, the political environment has been increasingly shaped by the rightwing economic agenda of the Republican Party.
There is no evidence, historical or contemporary, that right-to-work laws will reverse the severe economic decline workers experience. But there is evidence that the wealth and power of the super-rich will increase, while workers’ wages decline at the same time that their productivity rises.
Third, looking at capital/labor relations since the onset of the twentieth century, the strength of organized labor matters for all workers. Right-to-work, rather than attracting new investors, primarily enriches the current corporations in right-to-work states and weakens unions.
Finally, as President Obama stated in a visit to Detroit just before the Michigan legislative vote, the resurgence of right-to-work campaigns is “political.” Why? Because the labor movement is the only financial and grassroots base of opposition to the shift to pre-New Deal economic policy. This was demonstrated in the “ground game” of the labor movement in key battleground states during the last election. It also was reflected in campaigns to reverse assaults on public employees in Ohio and mobilizations of teachers in Chicago to protect public education. In general organized labor represents the front-line of defense against shocking inequalities in wealth and power, opposition to the privatization of virtually all public institutions, and the protection of programs that have given modest economic security to large portions of the population.
The Michigan story and the mythology about Indiana are just part of the ongoing struggle of the financial/corporate class and their rightwing politicians to destroy the last movement that can save Americans from destitution. While weakened labor appears to be mobilizing to protect the interests of the broadening working class.