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FEATURE NEWS | |
ANTI UNION FORCES WIN BIG
IN RUST BELT STATE
Indiana becomes 23rd state
with right to work law
February 02, 2012
 Union workers protest at the Indiana state house in Feb 2011. CLICK TO ENLARGE
He changed his mind.
On Wednesday Indiana’s right to work bill became law.
The state Senate voted 28-22 to pass what many saw as a bill to smash organized labor as thousands of protesters packed the Statehouse hallways shouting disapproval.
Daniels signed the bill shortly thereafter without any fanfare, making Indiana the 23rd state in the nation with such a law.
Under typical right-to-work laws, companies can no longer negotiate a contract with a union that requires non-members to pay fees for representation.
The House earlier passed the measure 54-44.
Daniels and other Republican supporters of the bill said it was necessary for Indiana to attract jobs.
In a statement released by his office Daniels said, "Indiana will improve still further its recently earned reputation as one of America's best places to do business, and we will see more jobs and opportunity for our young people and for all those looking for a better life.”
Other supporters, including the Indiana Chamber of Commerce, say besides leading to more jobs in the state, the bill will give workers more choice by letting them decide for themselves whether to financially support a union.
The main sponsor of the Senate bill, Republican Sen. Carlin Yoder also said the bill was about jobs and that unions will thrive despite the bill.
Not everyone sees it that way.
JOBS OR UNION BUSTING?
After the Senate vote, protesters left the Statehouse and joined a rally on the Statehouse lawn and later a march to Lucas Oil Stadium, where the Super Bowl will be held Sunday.
Sen. Tim Skinner, D-Terre Haute, said the bill was nothing less than part of a "union-busting" agenda from a governor who’s still running for president.
Others who oppose the bill say it will make it more difficult for unions to be able to improve wages, benefits and working conditions for all workers, both union and non-union.
Since the 1940s, 22 states have passed laws that bar unions from collecting mandatory fees from workers for labor representation.
Republicans are traditionally supporters of such laws believing they help create a pro-business climate that attracts employers and increases jobs in a state.
Opponents, traditionally Democrats say the law leads inevitably to lower wages and poorer quality jobs in a state, as there is no longer an effective counter balance to the power of large corporations to dictate wages and conditions to workers.
Indiana did adopt a right to work law in 1957 but repealed it in 1965.
Unions began forming in the mid-18th century as a response to poor wages and working conditions by large industrial companies that, due to their growing power and no effective labor laws, had no counter force in the marketplace to dictate wages and conditions.
UNION MEMBERSHIP DOWN CONSIDERABLY FROM THE SALAD DAYS
In 2010, total “labor union density” - the percentage of workers both public and private that belonged to a labor union - was 11.4% in the United States, down from a high of around 24% at the height of union membership years ago.
By comparison, in 2010 it was 18.6% in Germany, 27.5% in Canada, and 70% in Finland.
Both Germany and Canada were ranked in the top ten with the United States (with Germany ahead of the U.S.) as countries with the highest “quality of life” in a 2010 index of 194 countries compiled by International Living.
Union membership in the U.S. private sector has in recent years fallen under 9% — levels not seen since 1932.
Unions maintain that employers, with the help of political allies, have gotten much better at union busting and preventing unions from forming at companies in the first place.
COINCIDING WITH DECLINE IN UNION MEMBERSHIP IS DECLINE IN OVERALL AMERICAN WORKER WAGES
In tandem with the decline in union membership, and thus the number of Americans afforded union wages, benefits and job protections, overall American wages have essentially been flat since the 1970’s when adjusted for inflation.
“The slow economic strangulation of…millions of…middle-class Americans started long before the Great Recession, which merely exacerbated the “personal recession” that ordinary Americans had been suffering for years. Dubbed “median wage stagnation” by economists, the annual incomes of the bottom 90 per cent of US families have been essentially flat since 1973 – having risen by only 10 per cent in real terms over the past 37 years. That means most Americans have been treading water for more than a generation,” noted a July 2010 article in FT magazine.
And over that same period the incomes of the top 1 per cent in America have tripled.
In 1973, chief executives were on average paid 26 times the median income. Now the multiple is above 300. Union supporters would assert that is a "transfer of wealth" over decades from worker wages into the pockets of the upper class in America.
And the trend shows no sign of reversing soon.
THE GREAT STAGNATION BRINGS A NEW AMERICA WHERE UPWARD MOBILITY IS MUCH HARDER TO ACHIEVE
“Most economists see the Great Stagnation as a structural problem – meaning it is immune to the business cycle. In the last expansion, which started in January 2002 and ended in December 2007, the median US household income dropped by $2,000 – the first ever instance where most Americans were worse off at the end of a cycle than at the start. Worse is that the long era of stagnating incomes has been accompanied by something profoundly un-American: declining income mobility," notes the FT magazine piece.
That “income mobility” phrase means that now in America, you have a smaller chance of swapping your lower income bracket for a higher one than in almost any other developed economy – even Great Britain on some measures, a country that is often castigated as “socialist” in nature.
Put another way, in today’s America if you are born in rags, you are likelier to stay in rags than in almost any place in old Europe.
According to a recent report in the Los Angeles Times, a German couple with a $40,000 annual income lives better than an American couple with an $80,000 income.
The report concludes the secret is this: with its manufacturing base and export prowess, Germany is the U.S. of yesteryear -- an economic power unlike any of its European neighbors. It has thrived on principles America seems to have lost.
Those principles include frugal habits, low inflation and extensive social services such as old age pensions and universal medical care.
Those principles have given German workers, “Job security and good medical care as well as well-maintained roads, trains and bike paths.”
Young people also have a boost in German society that they do not have in America thanks to Germany’s job-training system and heavy subsidies for university education.
WHICH IS BETTER FOR WORKERS: A RTW OR NON-RTW STATE?
The results of a large amount of peer reviewed research data on how wages, benefits, disposable income, living standards, job availability, worker rights, worker safety in the workplace and other factors affect workers in RTW states and non-RTW states is so far inconclusive at best.
No one really knows for certain which states fare better for workers overall.
Quite often the results of what is purported to be a non-biased, purely scientific research study will depend on if the study comes from a business group “think thank” or research arm of a political group that opposes unions, or from a union or groups that support union activities.
Comparing the differences in RTW states to non-RTW states is also problematic as results may be driven by many factors other than RTW itself such as cost of living, productivity, climate preferences, aggressive subsidies provided to companies by states, geographical trends, location preferences built on closeness to markets and government policies among many other things.
There is also considerable variation in the results of controlled empirical studies because of differences in data, explanatory variables and methodology.
One review of a number of national studies done by Dr. Hari Singh of the Seidman College of Business, Grand Valley State University in Michigan concludes that, “Since no study is completely free of methodological problems, readers need to review all the empirical evidence in its entirety.”
In other words all the research on the subject, says Dr. Singh, should carry a prominent “buyer beware” sticker suggesting the results of such studies could well show a RTW state or non-RTW state in a positive or negative light depending upon many factors including the credence any one individual chooses to give to any particular study.
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