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Original article URL: http://bridgemi.com/2012/12/interest-high-in-right-to-work-gains-unclear/

Economy & competitive position/Public sector

Interest high in Right to Work; gains unclear

Gov. Rick Snyder has engaged in some shuttle diplomacy in recent days, talking with opponents and supporters of Right to Work, which limits requirements for participation in union activities by employees.

RTW is something the governor has repeatedly said is divisive and not on his agenda, yet the idea has been the subject of much discussion in State Capitol circles in the wake of the defeat of Proposal 2.

So far, Snyder’s effort to head off the introduction of an RTW bill in the Legislature’s lame-duck session is working. But the issue is not going to disappear when lawmakers call it a year and head home for the holidays.

The push to enact RTW picked up steam late Monday when the politically powerful, 6,800-member Michigan Chamber of Commerce announced it was throwing its weight behind the measure. Chamber President Rich Studley said his group switched from having no position on RTW after a survey showed 85 percent of its members support the measure.

UPDATE: The momentum increased Tuesday evening, when the Capitol news service MIRS reported that Snyder, after meeting with legislative leaders, said RTW is on his agenda and could advance in the current lame-duck legislative session.

In a statement, Studley said “it is clear that now is the time for bold and decisive action to pass comprehensive Freedom to Work legislation that applies to both the public and private sectors.”

RTW doesn’t prevent collective bargaining, said Jim Holcomb, the chamber’s senior vice president and general counsel.

“(I)t just gives every employee the ability to decide for themselves if joining and financially supporting a union is the right choice for them,” he said.

But was unclear on Tuesday if the Legislature would take up the highly controversial measure during the final days of its lame duck session.

Gongwer News Service reported Tuesday that lawmakers who support RTW were looking for a “vehicle bill” already introduced that will allow them to act on the measure in the waving days of their legislative session. That would avoid a requirement that a bill must sit for five days in each chamber of the Legislature, Gongwer said.

Last Thursday, hundreds of organized labor supporters came to the Capitol to express their displeasure over potential RTW legislation. And hundreds of supporters of RTW were expected to show up at the Capitol on Tuesday.

The failure of Proposal 2, which would have locked collective bargaining rights in the state constitution, has emboldened some Republicans and conservative West Michigan business leaders to try to soon make Michigan the nation’s 24th right-to-work state. There’s also been talk in Lansing of a pared-down, “Right to Work-lite” bill that would apply only to public sector workers.

If a RTW bill is not introduced in the lame-duck session this month, supporters say they will continue to push for its adoption next year in a Legislature that will continue to be controlled by Republicans – 59-51 in the House, 26-11 in the Senate (with one vacancy).

Right to Work laws prohibit companies from negotiating contracts with unions that require workers to pay union dues.

“I believe every person in Michigan deserves the right to decide whether they want to join or not join, support or not support, any group or cause they choose,” House Speaker Jase Bolger, R-Marshall, told WJR’s Frank Beckmann on Friday. “This is a fundamental change about freedom, fairness and equality.”

But others disagree. Several prominent business groups disagree with the chamber’s approach and say RTW is a treacherous path should Michigan avoid.

“I’m focused on trying to get people to work together and not do things that pull people apart,” said Brett Jackson, president of the Economic Alliance for Michigan, a labor-management coalition that works on state economic policy issues such as workers compensation insurance and health care.

The Economic Alliance is opposed to RTW, saying the measure won’t benefit Michigan.

The Economic Alliance’s leadership includes United Auto Workers President Bob King, Chrysler Group CEO Sergio Marchionne and Ford Motor Co. Executive Chairman Bill Ford Jr.

Another prominent group, Business Leaders for Michigan, led by Michigan Economic Development Corp. Chairman Doug Rothwell, echoes Snyder’s position on RTW.

“Right to Work is not on our agenda,” spokeswoman Kelly Chesney said via email.

Business site selection consultants say many manufacturing companies will not put new factories in non-RTW states. But the evidence that RTW leads to a stronger economy is inconclusive.

Studies by conservative groups mostly conclude that job growth is higher in RTW states, while studies by liberal groups have found that workers in RTW states generally earn less than those in non-RTW states.

A Bridge Magazine analysis in March of state gross domestic product, personal income and jobs data over the past two decades found that RTW states generally performed better than non-RTW states.

In the predominately Right to Work South, economists say faster job growth also is being influenced by better weather, lower energy costs and less government regulation.

Michael Hicks, an economist at Ball State University in Muncie, Ind. who has extensively studied Right to Work, released a report in January that found no significant impact of the measure on manufacturing jobs, wages and output.

But it is Indiana’s adoption of Right to Work earlier this year — the first Great Lakes state to do so — that has some saying Michigan must follow suit to compete economically against the Hoosier state.

Indiana Gov. Mitch Daniels opposed RTW during most of his time as governor.

Daniels said in media reports he changed his mind last year because of his frustrations over losing out on manufacturing investments that went to RTW states. He cited a $1 billion Volkswagen assembly plant that located in Chattanooga, Tenn. as one such investment.

The nonunion plant, which opened in 2011, has been expanding and is expected to employ 3,500 workers by the end of the year.

But wages and benefits at Volkswagen’s only U.S. assembly plant are far below those offered by other automakers building cars and trucks in the United States.

A study released in June by Kristen Dziczek at the Center for Automotive Research in Ann Arbor found that Volkswagen is paying $38 an hour in wages and benefits, compared to $55 an hour at Toyota and $56 an hour at General Motors.

In October, Bridge reported that Indiana’s Economic Development Corp. was crediting RTW status for drawing the interest of 83 firms toward the Hoosier State. However, of actual expansions, there were six — five of which from firms based in Indiana. The other firm, Android Industries, is from Auburn Hills, Mich. It planned to add up to 66 jobs in Fort Wayne.

Another state that might draw attention if the RTW debate advances in Michigan is Nevada. It has a Right to Work law, and it has a significant union presence.

Richard Block, a retired professor of labor and industrial relations at Michigan State, said the unionized casinos in Las Vegas are a labor “oasis, ” responsible for Nevada’s relatively high percentage of unionized workers. He also said Nevada’s labor climate is likely influenced by its neighbor to the west, California, which has a much larger economy and is a non-RTW state.

According to the federal Bureau of Labor Statistics, 16.6 percent of Nevada workers were represented by labor unions in 2011, not a lot less than the 18.3 percent of Michigan workers represented by unions. Nevada has the highest percentage of workers represented unions of any RTW state.

A culture shift for Michigan?

Making Michigan a RTW state would be a seismic cultural shift in a state where the union movement is credited with creating a prosperous middle class in the decades following World War II.

Despite their declines in recent years, labor unions in Michigan — particularly the United Auto Workers — are still a potent political force.

That’s one reason lawmakers may take just a bite of the apple by introducing legislation that would apply only to public sector workers. Some RTW supporters say collective bargaining by teachers and other public workers has resulted in generous wage and benefit packages that are financed from the pockets of taxpayers who often earn less in the private sector.

State employees in Michigan benefit from civil service protections and union representation. Union officials say both are needed.

“Collective bargaining is important for state workers for the same reason that it is important in the private sector, because it helps workers negotiate for fair wages and benefits, as well as for safer working conditions,” Michigan AFL-CIO spokeswoman Sara Wallenfang said in an email.

Ray Holman, legislative liaison at UAW Local 6000, which represents 17,000 state employees, said collective bargaining also is needed for state employees because civil service protections could be eroded by a Legislature that unions see as hostile to public employees.

Civil service rules have changed recently in states such as Tennessee and Arizona. In Arizona, the overhaul ended civil service rules for new hires – and for employees who accepted transfers or pay raises. About 40 percent of state employees had accepted the raise for service rules deal, as of mid-September.

Rick Haglund has had a distinguished career covering Michigan business, economics and government at newspapers throughout the state. Most recently, at Booth Newspapers he wrote a statewide business column and was one of only three such columnists in Michigan. He also covered the auto industry and Michigan’s economy extensively.

2 comments from Bridge readers.Add mine!

  1. Duane

    Let’s be honest Proposal 2, the Unions efforts to keep from having to compete for members, dared politicans and businesses to stop them. The Unions were using Proposal 2 as a means of retribution for the push back on the contractural cost agencies are facing. What is surprising is that so many politicans don’t believe that the Unions should suffer any conseqeuncies for their agressive action.

    Aside from sending a message to businesses that Unions don’t still have the political power that drove foreign car companies to avoid building plants in Michigan (Gov Blanchard’s era) it really has little impact on well run companies.

    The reality is that aside from making it convenient for lazy management avoid working directly with their employees what does a union offer a company be more competetive? Companies will have Unions when they see it will help them be sustainable.

  2. Joe

    Let’s see. The union negotiates for the benefit of all members but paying for this service by members is optional. Why don’t we apply this logic to all aspects of business and government? We don’t even need the IRS!

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