Michigan’s legislature is facing a firestorm with their current attempt to pass a Right to Work Bill. For those that don’t know, Right to Work legislation typically means that it is voluntary to pay union dues and join a union. In shops that have unions when you are hired on, it means that you do not have to be part of the union to get the job or keep it. In the Michigan bill it goes even further by allowing current union contracts to maintain their integrity until they expire. So why do the unions and their supports attack and persist in trying to prevent something that seems like common sense?
There is no doubt unions have their purpose in protecting worker safety and collective bargaining rights but unions have gotten out of control. Since post World War 2 unions have seen a precipitous drop in both membership and dues across the board. So losing what amounts to a captive source of income is frightening to them as they slowly suffer from lower influence. Unions no longer stand for providing jobs and good wages for employees and maintaining a safe work environment. Now it is about holding companies hostage to get the most out of their contracts to perpetuate themselves as a group. There are several examples of this recently. Boeing building a new plant in the Carolinas and moving some production to a newer more efficient plant in a Right to Work state was stopped by union forces attempting to prevent the company from moving that production away from a union state. Another example was the union at Hostess that forced the liquidation of the company for refusing to change their instance on things such as split shipping of products to same locations and other common sense things.
To explain further in the case of Hostess, the union insisted that truck carrying bread that would deliver to a store not carry other baked products that were produced. So while Wonder Bread came on one truck to a grocery store, the twinkies would arrive by a separate truck even though they were going to the same location. This forced the company to maintain more trucks and employees that would have otherwise been necessary thereby increasing expenses. It is important to note that not only would the company have to maintain the trucks, pay employees but would also have to have health insurance for those extra employees and retirement benefits to those employees. To recover those costs the company then has to charge the consumer more for the same product than would otherwise be needed. Admittedly there are and were other factors to Hostess’s demise but the final nail in the coffin was the unions refusal to negotiate for a new contract. Now 18000 people are out of work and it lays at the feet of the union.
Some people think the unions are there providing a good service to the employees and protecting them from the evil corporations. No doubt some corporations will attempt to game the system of providing a fair wage but at the same time the same can be said of unions. I am not calling for the total removal of all unions but I am saying that right to work legislation should be country wide and unions now should work with the workers to provide services and collective bargaining and stop competing with the corporations. At a local factory that produces air conditioners there is a job that pays 25 dollars an hour for a person on an assembly line to put two screws in each unit. It is 45 minutes work with a 15 minute break and a hour lunch for eight hours. This is all union mandated mind you. So the company actually gets 5.25 hours of productive work, assuming no quality control issues such as screw in wrong hole etc. By the way, that 25 dollar and hour doesn’t account for the cost of benefits which are generous I assure you. X person now only really works 5.25 hours but is paid for 8 hours of work. Not counting other costs the company is now paying an extra 68.75 for no work or productivity. Even if we take out the lunch hour because that does effect productivity. (Hungry workers aren’t as productive.) The company is still paying 43.75 dollars not counting benefits etc. Who do you think pays that in reality? The consumer. That means you. When the other costs such as retirement and benefits are factored in the cost soars.
In the above example as laid out the company tried to negotiate with the union to lower that job specifically to 19.50 an hour with the same benefits and retirement as previous. The union denied the request. Why did they deny the request? Talking to the union steward I was informed that the union leadership did not want to lower that persons salary as that would lower the union dues that position paid in. The union wasn’t there for the person it was there for the position and that position made them money. That is just one example of many that occur in states even with right to work legislation.
If that occurs even in states with Right to Work then how does that promote right to work? In right to work states that person has a choice to join the union or not it is not mandatory. So now the unions are forced to work for the person not for the position as much as possible. It levels the field between unions and corporations at the negotiating table. Unions exist in Right to Work states but the costs are lower than in states that don’t Right to Work as law.
So lets compare a Right to Work State with Michigan since that is what we are talking about. Michigan has a Seasonal Adjusted Unemployment of 9.1 (As of Oct. 2012) and a Regional CPI (Consumer Price Index, an idea of consumer pricing and cost of living.) of 216. National Average is 224. The average salary in Michigan is 44,438 which is below the national average of 46, 742. Compare with Texas which has a 6.6 Seasonally Adjusted Unemployment. (As of Oct 2012), a Regional CPI of 229. National Average is 224 and the average salary is 46,956. Looking at the numbers several things should pop out. While in Michigan the cost of living with the indicator of retail pricing etc is lower than Texas meaning that good and services are somewhat cheaper than Texas but fact that there is a whole 3 point difference in the number of people employed verses not shows that while retail costs are lower they have to be because not as many people are working to buy those retail items. Moving on to the average salary Texas beats the national average and the Michigan average salary which means on average people are paid more in Texas than Michigan.
That is not saying that one state is superior to the other in the different factors of where people want to live. What it is saying is that when it comes to employment and salaries the Right to Work state trumps the union state in the Rust Belt. As much as you might complain corporations are evil and our to screw over the consumer the numbers tell a different story. Right to Work states have a better chance at producing jobs and having a higher standard of living in the form of higher salaries than forced union states. It is all fine and well to be a union supporter but if you can’t get a job what good does the union do for you?