Alvin Bessent: Bad news for unions is bad news for workers
12/19/2012 12:00 AM
12/18/2012 6:51 PM
As a son of Michigan, I grew up knowing there were three things you could always count on. Stand anywhere in the state and you’re no more than six miles from a beautiful lake. If you don’t like the weather, wait a few hours; it will change. And a job in a union shop is a ticket into the blue-collar middle class.
Lakes and weather are fairly immutable; unions aren’t. They’ve been losing members and clout for decades, and the Earth moved last week when Michigan abruptly became the nation’s 24th “right-to-work” state. The battle has just begun. But Michigan, the birthplace of the modern labor movement, could become the place where it dies.
The new law won’t end collective bargaining. And workers were never required to join unions as a condition of employment, so that won’t change either. But under the law, employees in the state’s unionized workplaces can no longer be required to pay unions the cost of being represented.
That creates a free-rider problem. Some workers will ask: Why send money to the union when I’ll benefit from its bargaining efforts whether I pay or not? The result will be weaker unions, which will ultimately mean lower wages – and less money to support Democratic candidates.
So there’s no mystery in a Republican legislature rushing the right-to-work bill through during a lame-duck session without public hearings. Or in Republican Gov. Rick Snyder signing it into law last week, saying it would make Michigan more competitive with places like Indiana, which became a right-to-work state in February.
Let’s be honest – labor unions have been their own worst enemies. They historically fought the good fight for fair wages, the 40-hour workweek, safe workplaces, pensions and health insurance. But they also pushed unproductive work rules, featherbedding and job protections that made it all but impossible to fire bad employees. They drove up costs for companies, prompting them to look wistfully abroad.
But the middle class has lost ground as union muscle waned, weakening its members’ hand in collective bargaining for higher compensation, which in the past raised others’ pay in their wake. Middle-class incomes have been stagnant for decades as union membership dropped from 20.1 percent of the U.S. workforce in 1983 to 11.9 percent in 2010.
Technological advances that reduced the need for unionized workers, as well as globalization and free-trade agreements that make it lucrative and easy for employers to move jobs to low-wage nations, have obviously played a huge role in the woes of America’s middle class.
In many ways, globalization is delivering as promised. Corporate profits have soared, and some of the world’s poor are doing better. The global middle class has grown and is projected to explode from 1 billion people today to as many as 3 billion by 2030, according to the National Intelligence Council, which reports to the U.S. director of national intelligence.
The most rapid growth is likely to be in India and China, but dramatic growth is also predicted for Africa. That’s good news for people in places where too many have been impoverished for too long. But American workers have been left with the short end of the stick, and right-to-work laws will make it even shorter.
Workers can join unions, or pay them to fight for middle-class compensation, but if they succeed there will be fewer jobs. Alternately, they can live with right-to-work rules that make states more competitive in attracting jobs. But many of them will be the soul-crushing, $10-an-hour variety.
Either way, too many Americans will see that ticket to the middle class revoked.