Time to Give Indiana an Economic Edge

As Right to Work legislation finds its way back to the top of the legislative agenda in the state capital, Andrea Neal looks at the benefits of enacting a Right to Work bill in the Hoosier State:

It doesn’t take an economist to spot the common thread in these recent economic development headlines:

  • Chattanooga, Tenn., July 29: “Volkswagen hires 2,000th employee.”
  • Shreveport, La., July 28: “NJ-based bag manufacturer to build Louisiana plant.”
  • Decatur, Ala., July 21: “Polyplex to build $185 million plant.”
  • West Point, Ga., July 7: “Kia builds vehicle No. 300,000.”

All four stories have Southern datelines. All come from states with right-to-work laws, which prohibit labor contracts that [force] employees to join a union or pay a union representation fee.

This is the issue that prompted the five-week House Democratic walkout during the 2011 Indiana General Assembly. The Democrats — a minority in both House and Senate — had no other leverage. So when a right-to-work bill came up unexpectedly in a session that was supposed to be about the budget, redistricting and education, they bolted. Republicans capitulated and took the legislation off the table.

In 2012, it will return with a vengeance, and this time Democrats can’t avoid it. Right-to-work has been promised a full public airing. The Interim Study Committee on Employment Issues, chaired by Sen. Phil Boots, R-Crawfordsville, is taking a first crack this summer and hopes to recommend a bill by November. Gov. Mitch Daniels, who didn’t support the bill last session, has hinted he might this time around. (more…)

Matt Mayer of the Buckeye Institute debunks the long-term economic growth without Right To Work freedom is sustainable. Mayer uses a Columbus Dispatch reporter Joe Hatlett column that featured Former Michigan Gov. Jennifer Granholm to expose the fact that corporate welfare and reduced regulations ignore the “proverbial elephant in the room weighing down” compulsory union states like Indiana, Ohio, Illinois,, and Michigan.

From Matt Mayer’s post:

“With Michigan bleeding jobs and tax revenues, Granholm said she followed the corporate playbook in her attempt to close a huge state budget deficit and make Michigan more competitive. ‘In listening to the business community, I cut takes [sic] 99 times, and I ended shrinking government more than any state in the nation. In my two terms, I cut more by far than any state in the nation. And yet, we still have the highest unemployment rate.

There was no correlation.’ Granholm conceded that streamlining business regulations and lowering taxes — Kasich’s economic recovery mantra — are helpful, but they aren’t a panacea…[l]abor costs, help with start-up costs and proximity to markets are other factors.”

Hallett and Governor Granholm fail to mention why streamlining regulations and lowering taxes aren’t helping the northern states (located within 50 percent of the U.S. population and with low start-up costs) compete against the southern and western states. Instead, Hallett ignores the obvious answer and pleads for an end to corporate pork (with which we enthusiastically agree).

The reason Michigan and Ohio can’t compete is that the southern and western states already have fewer regulations and lower taxes, so “catching up” with those states still leaves the proverbial elephant in the room weighing down the northern states. Plus, those states are also pushing for lower taxes and fewer regulations, so the northern states are perpetually behind them. The elephant, which Governor Granholm does hint at, is labor costs, or, more specifically, unionized labor costs (see: General Motors and the United Auto Workers).

As I noted in Six Principles for Fixing Ohio, “Of course, tax and regulatory burdens also impact a state’s economy. Although many of the forced unionization states have heavy tax burdens and many of the worker freedom states have light tax burdens, some heavily taxed worker freedom states (Idaho, Nevada, and Utah) had the strongest sustained job growth from 1990 to today.

Similarly, a few moderately taxed forced unionization states still had weak job growth (Indiana, Illinois, and Missouri). The combination of both a heavy tax burden and forced unionization is deadly when it comes to job growth, as 11 of the 15 worst performing states are ranked in the top 20 for high tax burdens.” If Ohio and the other states from Missouri to Maine want to truly compete with Texas, Georgia, and South Carolina, then those states need to enact laws that protect the rights of workers not to join a labor union to get a job. (more…)

Teacher Unions Must Collect their Own Dues

Governor Bob Riley speaks to a gathering of lawmakers and citizens before signing into law a series of sweeping anti-corruption reforms. Photo credit: Robin Cooper, Office of the Governor.

Alabama’s News 13: “A new era for state corruption reforms”

Governor Bob Riley signed what he called, some of the strongest anti-corruption laws in the country.

The legal departments at both unions are rechecking Senate Bill two.

Take a look at what some them will do: Ban the practice of secretly funneling money to political candidates, through political action committees, called “pac to pac transfers.” They also limit what lobbyists can spend on public officials and requires them to register and file disclosures.

Now a week old, Senate Bill 2 is being double and triple-checked by the legal departments of the state’s teacher unions. SB2 ends the practice of deducting union dues from paychecks. The unions say it’s political payback. Governor Riley calls it an end to financing political activity by special interest groups.

Jefferson County AFT President, Vi Parramore said, “I think hurrying an ethics bill through has been a disaster.”

Both unions agree, Hyche with the regional Alabama Education Association and Vi Parramore, President of the Jefferson County American Federation of Teachers, that senate bill two – ending the practice of deducting union dues from paychecks – was an attack on the AEA.

Parramore said, “But I think the bill is mean-spirited…”

Hyche said, “…the governor and Bradley Byrne hijacked the legislative process for political gain and for political payback.”

Where were these concerned union officials to be found when Harry Reid tried to ram through federally mandated monopoly bargaining on states during the Lame Duck?

Birmingham News Takes on Phony Card Check Arguments

From the Birmingham News:

The good news for Alabama union membership is bad news for state and national union leaders.

The Bureau of Labor Statistics reports that the number of union members in Alabama increased fairly significantly from 2008 to 2009. (See story here.) The portion of the state’s work force that is in a union rose from 9.8 percent in 2008 to 10.9 percent in 2009. The same report noted union membership was stable across the nation at 12.3 percent for 2009, essentially the same as 2008.

Alabama is the only state in the Southeast with double-digit union membership. A likely reason this good news for organized labor is being greeted with such surprise is that it works against the storyline unions want Americans to believe right now.

Unions are trying to get the Democratic Congress and President Barack Obama to go along with a provision that would make it easier for them to organize a workplace. The so-called “Employee Free Choice Act” still is organized labor’s No.1 priority. It’s such a high priority that the AFL-CIO has dropped its longtime support for U.S. Sen. Blanche Lincoln, D-Ark., and is now backing her challenger, Arkansas Lt. Gov. Bill Halter, in this year’s Arkansas Democratic primary.

Union leaders should reassess their goals. Even with a heavily Democratic Congress, they haven’t been able to convince the honorables to tilt the playing field toward their favor. More than anything, the union leaders want Congress to approve something called “card check,” which would allow a union to organize a workplace by getting more than 50 percent of the workers at a particular company to sign a card asking for representation. That basically gets rid of the longstanding tradition of the secret ballot under current rules.

Right now, it takes only 30 percent of the workers in a company to ask for a union vote, but that vote is by secret ballot, as it should be. That way, neither management nor the union bosses can exert undue pressure. It’s easy to see how the card-check system, where a worker is asked to sign the membership card immediately, in front of colleagues, might be intimidating.

Back to Alabama, where instead of union membership declining, membership is increasing, even as unemployment continues to rise. According to the Bureau of Labor Statistics, union membership climbed by 10,000 workers in 2009, to a total of 181,000. The number of state residents represented by unions (they’re covered by union contracts but are not official union members) rose to 212,000, or 12 percent of all state workers.

Alabama’s percentage of union workers is more than double border states Tennessee (5.1 percent), Mississippi (4.8 percent) and Georgia (4.6 percent). Alabama’s story doesn’t help the unions make their case.

With Congress expected to become more Republican after this year’s elections, union leaders know they’re running out of time on this lousy card-check idea.

Courier Press Joins Card Check Opposition

The Evansville, Indiana Courier Press lends its voice in opposition to the Card Check Scam:

. . . It is a basic standard of democracy, a protection that allows them [workers] the freedom to vote their conscience and their best interests.

But that would change if labor organizations have their way with the Employee Free Choice Act, more commonly known as card check. Indeed, if the bill passes Congress and as expected, is signed into law by President Barack Obama, it would allow anything but “free choice.”

But they certainly are not alone. The Birmingham [AL] News makes the point:

The card-check bill is a horrible idea in a good economy; it’s even worse in the economy we’re living in today.

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Posted in: Alabama, Card Check, Indiana

Teachers' Union Violates Golden Rule

The National Right to Work Legal Defense Foundation has filed a formal complaint with the Federal Election Commission (FEC) asking it to investigate charges made by two Alabama educators who discovered a union scheme to divert their money into the National Education Association’s (NEA) political action committee (PAC).

Claire Waites, the chair of the science department, and Dr. Jeanne Fox, an assistant principal, both work at Daphne Middle School in Bay Minette, Alabama. Waites and Fox are both members of the Baldwin County Education Association (BCEA), Alabama Education Association (AEA), and NEA teacher unions.
In July 2008, Waites and Fox attended the NEA’s annual convention in Washington, DC, as delegates of the BCEA. By telephone, BCEA union president Saadia Hunter informed Waites and Fox that contributions to a “children’s fund” in their names were made from money included in their expense reimbursements for their trip to the convention.

Although Hunter told Waites that these contributions were not political in nature, they actually went to the NEA’s PAC, the NEA Fund for Children and Public Education.

Later, Hunter admitted that the money would be contributed to Barack Obama’s presidential campaign. Sworn statements by Waites and Fox indicate that the AEA union boss also admitted that the PAC contributions were paid with BCEA members’ dues. However, it is illegal for unions to contribute to political candidates using “dues, fees, or other moneys required as a condition of membership in a labor organization.”

Teacher union officials also violated federal law by encouraging and soliciting contributions under false pretenses and without informing Waites or Fox of their right to refuse to contribute without any reprisal. Federal law also forbids campaign contributions made in the name of another person.

“This union money laundering scheme makes a mockery of federal election law,” said Stefan Gleason, vice president of the National Right to Work Foundation, which has joined Waites and Fox as a complainant. “We suspect this scheme was widely used by the NEA union hierarchy and could involve hundreds of thousands of dollars. We urge the FEC to take decisive action.”

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Posted in: Alabama, FEC, Forced-Dues for Politics, NRTWLDF

Teachers Fight Back

The National Right to Work Foundation announced it will file a formal complaint with the Federal Election Commission, on behalf of two Alabama educators, against the National Education Association teacher union and two NEA affiliates for an illegal political fundraising scheme initiated by the union hierarchy.

According to the complaint, the NEA illegally laundered teachers’ dues into a union political action committee. Adding insult to injury, when confronted by the teachers, union officials tried to dupe them into thinking they were contributing to a “children’s fund.”

You can read the Foundation’s news release here.

You can also listen to the Foundation’s podcast on the NEA scandal here.

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Posted in: Alabama, FEC, Forced-Dues for Politics

Right to Work States and the Card Check Scam Bill

We have been warning readers for years that enactment of the Card Check Scam Bill — certainly a top agenda item for a Democrat Congress and a Democrat president — will have a negative impact on Right to Work states, and more people are starting to recognize that fact.

The Birmingham Business Journal takes a look at the possible impact the so-called Employee Free Choice Act will have on Alabama employers:

The proposed bill, often referred to as card check legislation, would take away the right of the employer to demand a secret ballot when more than 30 percent of its employees petition in favor of union participation. If the petition is declared valid, the union would then be certified as the exclusive representative of all the company’s employees.

The bill also proposes federal mediation if a unionized company and a union can’t agree upon a collective bargaining contract within 120 days.

The concern for businesses is that unions might use pressure to push employees into union membership and that they won’t understand the ramifications, like the union bargaining exclusively for all employees, said Jay St. Clair of labor and employment law firm Littler Mendelson PC in Birmingham.

“The concern is that there can be coercion and people can’t vote their true feelings,” he said. “It does away with the fundamental process (secret ballot) that has been in law since 1930 and a process we’re all familiar with and have endorsed for 70 years.”

And in Virginia, where former Democrat Gov. Mark Warner is running for the Senate, Warner refuses to say that he will vote against the Card Check Scam Bill — a fact that has the Harrisonburg Daily News-Record rightfully up in arms:

As the polls repeatedly tell us, former Gov. Mark Warner makes an appealing candidate for U.S. Senate. But a recent refusal to commit, up or down, on an issue critical to many Virginia voters, in our mind, diminishes this appeal.

The issue to which we refer is the proposed Employee Free Choice Act, which would, in essence, replace the secret ballot in the decision to organize a union with a “card check” system. The system would allow union organizers to place pressure — at times, undue pressure — on individual workers to “check” that “card” to organize a union. A secret ballot affords each and every worker, well, the secrecy of their vote on this matter. It affords them protection. So in a state such as Virginia, which cherishes a right-to-work tradition that for decades has been a foundation stone of state prosperity, Mr. Warner’s position, or lack thereof, should be political dynamite for the business community and its employees.

Asked no less than three times this past Friday during a question-and-answer session at The Winchester Star whether he would vote “yes” or “no” on this undemocratic bill, Mr. Warner admirably imitated a crawfish. He wiggled and danced, and gave explanations for his wiggling and dancing, but never did answer the question.

We find that middling odd — and much more when we note that such a committed old liberal as George McGovern has actually made a television commercial opposing this “undemocratic overreach.” Part of the script reads as follows: “Voting is an immense privilege. That is why I am concerned about a new development that could deny this freedom to many Americans. As a longtime friend of labor unions, I must raise my voice against pending legislation I see as a disturbing and undemocratic overreach not in the interest of either management or labor.”

We wholeheartedly agree with Mr. McGovern, but would lend a bit of nuance to his statement. While it is true that “labor” — and by this we mean individual workers — would see no benefit from this act, “Big Labor,” the unions themselves, could realize substantial succor.

For his part, Mr. Warner pledged fealty to the state’s right-to-work law and tradition, but said the process of union organization was an entirely different matter. He said “reform” of the process was necessary, and that “over the last eight years,” the balance had shifted too much toward management, at the expense of labor. Nonetheless, he did say he had certain “concerns” about provisions of the legislation in question. Bottom line: Mr. Warner said he would not vote for any measure giving an “unfair advantage” to labor or management, yet refused to commit either way on this piece of legislation.

Yet this bill would give an “unfair advantage” to labor leaders by taking away from workers the right to choose without coercion, the same right all Americans exercise in an election. What about this does Mr. Warner not understand — particularly when a liberal like George McGovern sees it so clearly? This is a right-to-work issue.

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Posted in: Alabama, Card Check, Virginia