Right to Work Blog

Readers know the difficulty Michigan is having creating jobs and economic prosperity. But defenders of Big Labor like to deny that the regulations and costs the United Auto Workers (UAW) and other big unions have imposed on the state have anything to do with the state’s mired economic conditions. Albeit already difficult, it is getting harder to make such an argument.

Phil Gramm and Mike Solon writing in the Wall Street Journalnote:

The Competitiveness Index created by the American Legislative Exchange Council (ALEC) identifies “16 policy variables that have a proven impact on the migration of capital — both investment capital and human capital — into and out of states.” Its analysis shows that “generally speaking, states that spend less, especially on income transfer programs, and states that tax less, particularly on productive activities such as working or investing, experience higher growth rates than states that tax and spend more.”

Ranking states by domestic migration, per-capita income growth and employment growth, ALEC found that from 1996 through 2006, Texas, Florida and Arizona were the three most successful states. Illinois, Ohio and Michigan were the three least successful.

The rewards for success were huge. Texas gained 1.7 million net new jobs, Florida gained 1.4 million and Arizona gained 600,000. While the U.S. average job growth percentage was 9.9%, Texas, Florida and Arizona had job growth of 18.5%, 21.4% and 28.9%, respectively.

. . .

There also appears to be a clear difference between union interests and the worker interests. Texas, Florida and Arizona are right-to-work states, while Michigan, Ohio and Illinois are not. Michigan, Ohio and Illinois impose significantly higher minimum wages than Texas, Florida and Arizona. Yet with all the proclaimed benefits of unionism and higher minimum wages, Texas, Florida and Arizona workers saw their real income grow more than twice as fast as workers in Michigan, Ohio and Illinois.

Incredibly, the business climate in Michigan is now so unfavorable that it has overwhelmed the considerable comparative advantage in auto production that Michigan spent a century building up. No one should let Michigan politicians blame their problems solely on the decline of the U.S. auto industry. Yes, Michigan lost 83,000 auto manufacturing jobs during the past decade and a half, but more than 91,000 new auto manufacturing jobs sprung up in Alabama, Tennessee, Kentucky, Georgia, North Carolina, South Carolina, Virginia and Texas.

Gramm and Solon ask whether any of these facts play into the presidential debate and the positions the candidates have on issues like Right to Work?

So what do the state laboratories tell us about the potential success of the economic programs presented by Barack Obama and John McCain?

Mr. McCain will lower taxes. Mr. Obama will raise them, especially on small businesses. To understand why, you need to know something about the “infamous” top 1% of income tax filers: In order to avoid high corporate tax rates and the double taxation of dividends, small business owners have increasingly filed as individuals rather than corporations. When Democrats talk about soaking the rich, it isn’t the Rockefellers they’re talking about; it’s the companies where most Americans work. Three out of four individual income tax filers in the top 1% are, in fact, small businesses.

In the name of taxing the rich, Mr. Obama would raise the marginal tax rates to over 50% on millions of small businesses that provide 75% of all new jobs in America. Investors and corporations will also pay higher taxes under the Obama program, but, as the Michigan-Ohio-Illinois experience painfully demonstrates, workers ultimately pay for higher taxes in lower wages and fewer jobs.

Mr. Obama would spend all the savings from walking out of Iraq to expand the government. Mr. McCain would reserve all the savings from our success in Iraq to shrink the deficit, as part of a credible and internally consistent program to balance the budget by the end of his first term. Mr. Obama’s program offers no hope, or even a promise, of ever achieving a balanced budget.

Mr. Obama would stimulate the economy by increasing federal spending. Mr. McCain would stimulate the economy by cutting the corporate tax rate. Mr. Obama would expand unionism by denying workers the right to a secret ballot on the decision to form a union, and would dramatically increase the minimum wage. Mr. Obama would also expand the role of government in the economy, and stop reforms in areas like tort abuse.

The states have already tested the McCain and Obama programs, and the results are clear. We now face a national choice to determine if everything that has failed the families of Michigan, Ohio and Illinois will be imposed on a grander scale across the nation. In an appropriate twist of fate, Michigan and Ohio, the two states that have suffered the most from the policies that Mr. Obama proposes, have it within their power not only to reverse their own misfortunes but to spare the nation from a similar fate.

Montana Democrats endorsed a party platform this week that specifically rejects workers’ choice and the Right to Work. Montana’s neighbors: Idaho, North Dakota and Wyoming, have all benefited from the enactment of a Right to Work law. Surrounded by a sea of worker choice states, the Democratic Party of Montana just hung up a sign on the state that says “closed for business.”

This is not a theoretical debate. Just ask the working folks of Kentucky who lost a billion-dollar investment by VW to neighboring Tennessee — a Right to Work state.

In addition to the quarter of a billion dollars the AFL-CIO will spend to elect pro-Big Labor puppets across the nation, the Services Employees International Union (SEIU) will spend an incredible $75 million in forced-union-dues money between now and November.

The New York Times noted:

The union’s secretary-treasurer Anna Burger said the SEIU would devote money and staff to Colorado, North Carolina and Virginia. The union’s strategy appears to dovetail with the Obama campaign’s plans to compete in those states, all three of which President Bush won in 2004.

At a strategy briefing last week, campaign manager David Plouffe said “we think we’re in a very strong position” in North Carolina and Virginia and he indicated Mr. Obama would not be ceding the mountain West to Senator John McCain either. Mr. Obama chose the University of Colorado in Colorado Springs as the venue to talk up his national service agenda on Wednesday.

Ms. Burger said the union, which endorsed Senator Obama in February, would also pour resources for both the presidential contest and down-ballot races into the perennial battlegrounds of Iowa, New Hampshire, Ohio, Pennsylvania, Wisconsin and Michigan, among others, as well as governor’s races in Indiana, Missouri, North Carolina and Washington State.

To add insult to injury, the $75 million total does not include a $10 million bounty the union bosses have set aside to ensure that pro-Big Labor politicians don’t ever vote the interests of union members instead of the union leadership.

Despite bipartisan abandonment of taxpayers and workers by members of Congress from both parties who are trying to curry favor with police and fireman unions, the Winston-Salem Journal understands what the real issues are:

The U.S. Congress shouldn’t be meddling with the decisions that city and town leaders must make regarding local government salaries.

Yet that is exactly what Congress is trying to do with legislation that would require all cities and towns of more than 5,000 population to bargain collectively with the leading union that represents public-safety officers — police, firefighters and emergency-service workers.

The bill was moving toward Senate approval last week when Republicans suddenly stopped supporting it. Senate leaders now say they will try to work out a compromise and bring the bill back to the floor.

Although President Bush has promised to veto the bill, it’s entirely possible that there is enough support in Congress to override that veto.

At the very least, an override vote will be close because, for a pro-union measure, the bill has had a good deal of Republican support. (North Carolina’s two senators, Elizabeth Dole and Richard Burr, and 5th District Rep. Virginia Foxx have opposed the bill as it has moved through Congress.)

Even if a Bush veto is upheld in Congress, this is not likely to be an issue that will go away. But it should.

The bill is offensive for a number of reasons.

The first and foremost is that it is probably unconstitutional. That annoying 10th Amendment, the one that reserves for the states all powers not explicitly enumerated for the federal government, is still on the books. There’s nothing in the U.S. Constitution that gives Congress the authority to mandate collective bargaining.

In the past, the amendment has been used as the constitutional basis for a lot of bogus arguments — mostly to oppose the civil-rights movement — but this is not such a case. Setting salaries for government workers is a state and local matter.

In North Carolina, public employees do not have the right to bargain collectively. The N.C. State Employees Association has just affiliated itself with a union, but that doesn’t mean it has the right to hold negotiations with the governor and legislators over salaries and benefits. Congress should not come along and decide that it will change the labor structure in this state.

With HR 980, the Congress is also passing a huge unfunded mandate for cities and towns. Collective bargaining would put upward pressure on salaries, and the federal government would not help with them at all. If Congress wants to do something to raise safety officers’ salaries, it should send some money to cities and towns for that purpose.

Congress is meddling here, involving itself in an issue that is best handled by towns, cities and states.

Let’s hope there are enough votes to sustain a Bush veto if the bill passes the Senate. This is an idea best forgotten.