The Michigan example

I had to pause and reflect this week as the Legislature in my home state of Michigan passed into law a form of “right to work” that had been promoted by Gov. Rick Snyder. The law made union dues voluntary for private-sector unions and most public sector unions.

If you had asked me five years ago which state would pass right to work sooner, Michigan or Minnesota, I would not have guessed Michigan. But that’s because I knew too much about the history of labor in Michigan and too little about the current conditions of organized labor in Minnesota.

The history of organized labor in Michigan is filled with drama and conflict. Copper mining gives the state’s Upper Peninsula (or “UP”) cultural and economic similarity to Minnesota’s Iron Range. There are stories and songs about the struggles of miners to organize in the face of brutal management tactics.

One event in that lore was the Christmas Eve disaster of 1913, in Calumet, Michigan. Striking workers and their families were at a Christmas party when strike-breaking thugs yelled “fire,” causing a stampede for exits. Seventy-three people were killed, mostly children. Union history in Michigan is also tied to heavy industry in and around Detroit. The year 1937 saw the “Battle of the Overpass,” in which UAW organizers led by Walter P. Reuther were beaten up by thugs hired by the Ford Motor Company at the flagship River Rouge Plant.

Today, the only visible evidence of that event is the Walter P. Reuther Freeway, part of I-696. It’s a bypass route, detouring around the city of Detroit to connect the more vibrant and prosperous northern suburbs in Oakland and Macomb counties. It’s also a good metaphor for the path that economic progress has taken in Michigan.

The days when companies challenged the mere existence of a union are long gone. When he was governor of Michigan, Mitt Romney’s dad, George Romney, signed bills giving collective bargaining agreements and unions special legal status, further bolstering federal labor laws. It was those laws that unions tried to pass by a ballot initiative, a move that was repudiated as overreach by Michigan voters Nov. 6.

Gov. Snyder’s action doesn’t undo any of what those workers of long ago fought for. It gets rid of the special authority that the state has granted to unions, to compel workers to join and/or pay them dues.

For the most part, big business has learned to live with unions and has simply factored them in as a cost of doing business. All was well until the era of predominance of the American companies came to a close. The first sign of problems came in the 1980s, with the ascendency of the Japanese. To different degrees, Ford, Chrysler and GM slashed their middle management layers and instituted profit-sharing with the unions in lieu of the continued pay and benefits increases that had been the norm.

But it’s one thing to accept ever-expanding labor costs when the future portends growth; it’s another when your market share is shrinking. The 1980s was also a time when automation technology in manufacturing was becoming much more reliable and was replacing some of those assembly line jobs. Robots don’t need health insurance or a pension.

These massive changes are what economists and policy experts call “structural variables.” They are not within the control of either the unions or their private-sector managers, both of whom must navigate the treacherous waters of these fundamental changes, as well as the ups and downs of the business cycle, together, for better or for worse.

It’s a truth that has been staring Michiganders, union and nonunion alike, in the face for at least the last 40 years. It’s not “the man” who is their ultimate enemy: It’s the business cycle and global competition. There are only so many “buy American” laws that you can pass, and in the end, they don’t do any good. You can give your employer more flexibility to reorganize and operate, or you can start packing the U-haul to move to Texas or some other right-to-work state.

Right to work may not save the Michigan economy, but it will change the terms of the conversation from this point forward. It will give workers a bigger say on what they think the benefits of collective action are, and they will be able to vote with their feet.

But what about Minnesota? As I noted earlier, the conditions are fundamentally different. Michigan is a highly unionized state, but private-sector unions like the UAW predominate. In contrast, 15 percent of Minnesota workers belong to a union, but public-sector workers predominate. The public sector has at best, a lagged relationship to economic cycles. This usually permits them to skirt the troughs in their long, drawn-out biennial negotiations.
This trend sets Minnesota on a collision course with reality. It is now surrounded by states with some form of right to work laws. Michigan (like Wisconsin before it) has shown us that private sector worker and their unions will continue to respond to market forces. Public sector workers don’t have to, until taxpayers say “enough!” Which would be better, to wait until we get to that point, or to allow workers to transform their unions through the power of choice?