BRYCE ON POLITICS
– But will it work for them?
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Presidential candidate Sen. Kamala Harris (D-CA) recently raised eye-brows by calling for a federal ban on “Right-To-Work” (RTW) laws in the United States. By doing so, she was pandering to American unions to support her candidacy. Other Democrat candidates will likely follow suit, as they do every four years, and by doing so RTW laws are once again becoming a campaign issue. Unfortunately, many people still do not understand what is at stake here.
Right-To-Work simply means a union cannot get a worker fired for not paying union dues. It also means joining a union is voluntary, not compulsory as you will find in a “closed shop.” Such laws started in the south and west, but are now moving north with Kentucky becoming the 26th (2017), Wisconsin the 25th (2015), Michigan (24th; 2012) and Indiana (23rd; 2012).
RTW laws weaken the strength of unions. To illustrate, Boeing’s North Charleston plant employs about 7,500 workers to build fuselages for 747s and 787s. In 2015, the International Association of Machinists and Aerospace Workers tried to build support to unionize 3,175 production and maintenance workers. The effort was called off as workers wouldn’t embrace the union. Boeing constructed the plant in South Carolina after several battles with unions at its Washington plant.
According to a February 2011 study by the Economic Policy Institute, the drawbacks to RTW include:
* Wages in right-to-work states are 3.2% lower than those in non-RTW states.
* The rate of employer-sponsored health insurance is 2.6 percentage points lower in RTW states.
* The rate of employer-sponsored pensions is 4.8 percentage points lower in RTW states.
However, it should be remembered that the cost of living in RTW states is less than non-RTW states.
Further, an article in the “Wall Street Journal” (“An Inspiration and a Warning From Michigan”; Dec 14, 2012) claims that “between 1980 and 2011, total employment in right-to-work states grew by 71%, while employment in non-right-to-work states grew 32%. Sadly, employment in Michigan increased just 14% during that time. Since 2001, RTW states added 3.5% more jobs, while other states decreased by 2.6%. Similarly, inflation-adjusted compensation grew 12% in RTW states, but just 3% in the others.”
Beyond this, RTW is an important indicator of a state’s prosperity. To illustrate, according to a report from the Mercatus Center at George Mason University, it appears financial success in state governments is not by accident. The Mercatus report, examined the financial stability of the fifty states, plus Puerto Rico and Guam. The report considered debt and financial obligations, as well as state pension programs and health care benefits. Of the top 10 states, all had adopted RTW legislation:
#1 – Nebraska #2 – South Dakota #3 – Tennessee #4 – Florida #5 – Oklahoma #6 – Wyoming #7 – Idaho #8 – Utah #9 – North Carolina
#10 – Nevada
Of the bottom 10 states in the study, with the exception of Kentucky (which just adopted RTW legislation in 2017), none supported RTW:
#41 – New York #42 – California #43 – West Virginia #44 – Delaware #45 – New Mexico #46 – Kentucky #47 – Massachusetts #48 – New Jersey #49 – Connecticut
#50 – Illinois
In another article, I discovered the states reporting the highest levels of worker “engagement,” meaning the employees are motivated and self-starting, were primarily in the South, and the lowest were in the Northeast and Midwest. Again, in this instance, the South includes RTW states, and the Northeast and Midwest are under union control.
Time and again, RTW is somehow related to prosperity. Coincidence? I do not believe so. Bottom-line, it comes down to whether or not you believe trade unions serve the best interests of their constituents. With the passing of Kentucky’s RTW legislation, there are now more states interested in providing work for their people as opposed to trusting the unions.
As an aside, the territory of Guam has RTW laws, as does the Federal Government. Participation in unions is strictly voluntary.
In the upcoming presidential election, you will not hear a Democrat candidate openly support RTW legislation as they need union votes to get elected. However, the day is not far away when living in a non-RTW state will be considered a political liability as opposed to an asset. Therefore, Sen. Harris’ attack on RTW was to be expected, after all she is not a Republican.
Keep the Faith!
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Tim Bryce is a writer and the Managing Director of M&JB Investment Company (M&JB) of Palm Harbor, Florida and has over 40 years of experience in the management consulting field. He can be reached at [email protected]
For Tim’s columns, see: timbryce.com
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Copyright © 2019 by Tim Bryce. All rights reserved.
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