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Michigan 'Right-to-Work' Bill is the Wrong Economics for the Middle Class

Michigan 'Right-to-Work' Bill is the Wrong Economics for the Middle Class

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So-called right-to-work legislation will make it harder for unions to do their job: improving wages and working conditions. That, in turn, will push our economy toward more weakening of the middle class, which will, in the end, lower our nation’s economic competitiveness.

So-called right-to-work legislation will make it harder for unions to do their job: improving wages and working conditions. That, in turn, will push our economy toward more weakening of the middle class, which will, in the end, lower our nation’s economic competitiveness.

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Published by: Center for American Progress on Dec 10, 2012
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1Center or American Progress | Michigan ‘Right-to-Work’ Bill Is the Wrong Economics or the Middle Class
Michigan ‘Right-to-Work’ Bill Is theWrong Economics for the Middle Class
Adam S. Hersh, Heather Boushey, and David Madland December 10, 2012
Te Michigan sae legislaure las week rushed hrough a bill o insiue a so-called“righ-o-work” law, which will make i illegal or workers and employers o negoiae aconrac requiring everyone who benes rom a union conrac o pay heir air share o he coss o union represenaion.
1
I Michigan Gov. Rick Snyder signs his legislaion i will no only weaken unions, bu also hur workers, he middle class, and local econo-mies in general.Te preponderance o economic evidence on he eec o labor unions on produciv-iy and economic growh show ha unions oser high-produciviy, high-pro rms.Botom line: Srong unions are good or jobs and “righ-o-work” laws are no, as heevidence in his brie shows. Unions suppor a srong middle class and play a criical rolein supporing our naion’s economic compeiiveness by:Supporing high-produciviy workplaces where inormaion can ow rom he botom-up o improve business perormanceSupporing higher wages and benes, no jus or union members bu across he board. High union densiy in a region ends o suppor higher wages across he regionregardless o union represenaion, especially or workers a he lower end o hedisribuionConribuing o macroeconomic sabiliy by giving cerainy o consumpion, saving,and invesmen in he economy  Advocaing or broader worker proecions needed or amilies o make human-capialinvesmens—srong public educaion, social saey nes, minimum wages, paid leave,and even civil righs and ecien regulaion A srong middle class, in urn, is wha uels compeiive economies wih high sandardso living. Research on economic growh clearly shows he ried and rue pah o sus-ained economic growh is o build rom he middle ou—osering an economy wheregrowing economic opporuniy and nancial securiy build a burgeoning middle class.Moreover, a srong middle class is a key o all he building blocks ha research says arehe oundaion o long-erm economic growh:
 
2Center or American Progress | Michigan ‘Right-to-Work’ Bill Is the Wrong Economics or the Middle Class
Educaion, skill developmen, and healh o he work orceIncenives or enrepreneurshipSable macroeconomic and nancial balancesHigher-qualiy governance in boh public and privae insiuions
2
 “Righ-o-work” laws have ailed o increase employmen growh in he 22 saes hahave adoped such laws, and in saes more recenly adoping righ-o-work, employ-men growh and business relocaions have reversed heir previous expanding rends.
3
 In oher words, he economic evidence shows ha unions and union membership, no“righ-o-work” laws, are wha are conducive o broad economic growh.I is also imporan o noe ha “righ-o-work” is a misnomer. While proponens ramehis policy as being pro-workers’ righs, in ac, ederal law already guaranees ha noone can be orced o be a member o a union, or o pay any amoun o dues or ees oa poliical or social cause hey don’ suppor. oday in Michigan workers covered by aunion conrac can reuse union membership and pay a ee covering only he coss o  workplace bargaining raher han he ull cos o dues.Michigans proposed legislaion will allow some workers o receive a ree ride, getinghe advanages o a union conrac—such as higher wages and benes and proecionagains arbirary punishmen or discriminaion—wihou paying any ee associaed wihnegoiaing on hese maters. Ta’s because, by law, unions mus represen all workers wih he same due diligence regardless o wheher hey join he union or pay is duesor oher ees. Addiionally, a union conrac mus cover all workers, again regardless o heir membership in or nancial suppor or he union. As a resul, righ-o-work legisla-ion weakens unions by making hem provide services wihou being paid or hem.
4
 
“Right-to-work” laws create fewer jobs and attract less business investment
Tere is really no economic evidence showing “righ-o-work” laws leading o more jobs or beter oucomes or workers. Tis is seen plainly in analysis looking a heimpac o such laws in Oklahoma, he only oher sae o adop a righ-o-work law in he pas 25 years prior o Indiana doing so in 2011 and Michigan’s curren legisla-ive move. In ac, economiss Sylvia Allegreto and Gordon Laer o he Universiy o Caliornia, Berkeley and Universiy o Oregon, respecively, show ha sinceOklahoma’s law passed in 2001, manuacuring employmen and business relocaionso he sae acually reversed heir “pre-righ-o-work” increases and began o all—andhis a a ime when Oklahoma’s exracive indusry economies were booming.
5
o heconrary, hese researchers show ha righ-o-work laws have ailed o increase employ-men growh in he 22 saes ha have adoped hem.
 
3Center or American Progress | Michigan ‘Right-to-Work’ Bill Is the Wrong Economics or the Middle Class
 As Henry Ford ound a cenury ago, i workers don’ earn enough o spend on basics, heeconomy suers. Paying workers a living wage no only booss produciviy, bu i is alsogood or demand. As he middle class weakens or inequaliy rises, hose no a he opdon’ have as much o spend.
Unions strengthen the middle class
Unions srenghen businesses and he economically vial middle class by giving work-ers a voice in boh he workplace and our democracy. Unions do his by pushing or air wages and good benes, and also by encouraging ciizens o advocae or middle-class-riendly policies like a srong Social Securiy sysem and amily-leave benes.In ac, according o a recen sudy conduced by he Cener or American Progress AcionFund, srenghening unions is as imporan o he middle class as boosing college-grad-uaion raes.
6
Similarly, soci-ologiss Bruce Wesern and JakeRoseneld o Harvard Universiy and he Universiy o Washingon,respecively, have calculaed haapproximaely one-hird o heincrease in male wage inequaliy rom 1973 o 2007 was due odecreasing unionizaion—abouhe same amoun hey ascribed ohe increasing payo o a collegeeducaion.
7
No surprisingly, righ-o-work laws have a negaive impac onhe middle class. Te average worker—unionized or no— working in a righ-o-work saeearns approximaely $1,500 lessper year han a similar worker in asae wihou such a law. Workersin righ-o-work saes are alsosignicanly less likely o receiveemployer-provided healh insur-ance and pensions.
8
I benes coverage in non-righ-o-work saes were lowered o helevels o saes wih hese laws, 2 million ewer workers would receive healh insuranceand 3.8 million ewer workers would receive pensions naionwide.
9
And unions end oespecially make large income dierences or communiies o color in he Unied Saes.
10
 
figure 1
As unions have weakened, Michigan’s middle class has shrunk 
 
0%5%10%15%20%25%30%35%40%40%42%44%46%48%50%52%54%56%
Union-membership rateMiddle-class income share
197719791981198319851987198919911993199519971999200120032005200720092011
Union-membership rateMiddle-class income share
Source: Michigan’s union membership rate is from unionstats.com; share of income going to middle 60 percent of households is from Bureauof the Census, American Community Survey (Department of Commerce, 2012).

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