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Bruce Pietrykowski

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Michigan and Right-to-Work: Entrance Ramp to the Low Road Economy

Posted: 12/10/2012 9:32 am

The legislature and the governor's support for right-to-work legislation is premised on two notions: (1) right-to-work is a freedom of choice issue and (2) right-to-work promotes economic growth and job creation. Let's consider each of these arguments.

Unions come into being when a majority of the workers vote in favor of union representation. Unions are the outcome of a democratic -- one worker one vote -- system. Workers who are unhappy with the union can organize a decertification election if they so choose. If this sounds familiar, elections with the ability to recall unpopular representatives, it should. That's how our democratic system works.

Right-to-work legislation distorts this democratic process under the guise of freedom of choice. Unions bargain for wages and benefits for all the workers that they are elected to represent. Unions don't represent only those workers who voted for them. Union wages and benefits are paid to all workers in the bargaining unit. The facts indicate that workers represented by unions have significantly higher wages and more generous benefit packages than similarly situated workers who lack a union. In essence, unions provide a collective good to unionized workers. This, in turn, benefits the communities in which workers spend their wages and the government that collects more in tax revenue.

Unions also have been found to increase productivity and profitability in those companies that adopt a high wage, high performance work organization. This is the "high road" strategy. Recent studies identify high performance workplaces as those that are able to innovate and successfully respond to change. The evidence is clear that unions, working in cooperation with management, actually enhance high performance workplace initiatives. Increasingly the auto industry is an example of a high performance workplace. And unions are instrumental to this high road strategy. That's right; today's unions are a key ingredient for high productivity, high wages and high profitability. These are the workplaces that the state should try to grow and attract.

By contrast, right-to-work exemplifies the "low road" strategy. A 2010 study by economists at Ohio State, Penn State and Oklahoma State compared state-level economic performance from 2000 to 2007. They explored differences between states that adopted high road policies with those that adopted the low road strategy. After controlling for other policy effects, states with right-to-work had lower rates of employment growth and lower levels of per capita income.

In addition, right-to-work actually threatens the very benefits that collective goods provide. By allowing individuals to opt out of paying for services that they are still able to consume, right-to-work undermines the logic of shared responsibility. This is analogous to allowing homeowners to opt out of paying their local taxes while still being able to freely partake of police and fire protection, garbage pickup and road repairs. These are community services that require that each of us pay our fair share. Right-to-work undermines the effects of a one-person one-vote democracy, abandons social responsibility and puts Michigan squarely on the low road of economic development.

Unions have changed. It's time for politicians to crack the books and learn about how to encourage the creation of more high performance workplaces of the 21st century rather than clinging to outmoded ideas that attempt to recreate the 19th century workplace.

 
 
 
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