Michigan: Right to Work State?

My home state of Michigan is in many ways ground zero of the modern industrial labor union movement. Even as unions have lost ground nationwide and been all but outlawed in the South, unions in Michigan have persevered even though they have but a shadow of their former strength and militancy. Roughly 18% of Michigan workers belong to a union. In some respects the union movement is on life support. But if there's one thing the Republican establishment agrees on it's dislike of unions. So the Republican dominated House and Senate passed bills that would establish Michigan as a "right to work" state. Michigan governor Rick Snyder, who had previously cast himself as a moderate technocrat and said that he thought such legislation was divisive and not very useful to the Michigan population, has done a 180 and said that he could sign the measures into law as early as today.

So what brought us to this point? Well a lot of different things actually. You can't just point to one item. There has always been a struggle between labor and capital simply because the interests are different. If capital could go back to the bad old days of the 1920s or before when they had no unions, compliant politicians, non-existent worker protections and virtual immunity from legal consequences they would do so. If labor could get back to the 1950s when they had strong large popular unions they would do that as well. But the proximate cause of this fight is strangely enough not something in Michigan at all. Michigan unions, and their supporters, deeply worried about labor rights in the wake of Wisconsin governor Scott Walker's successful trimming of labor protections in his state, backed an amendment to Michigan's Constitution. This Proposal 2 would have enshrined labor rights in the Constitution by guaranteeing public and private sector employees the right to organize and collectively bargain for wages and benefits. This was decisively rejected at the polls.

Well as the saying goes, elections have consequences and payback is a muyerfuyer. Republicans saw the Proposal 2 amendment failure as a shot across their bow that had to be responded to, proof of union weakness or as the excuse they needed to implement long desired ideas. So that's how we arrived at this point. Republicans are in the majority. Majority writes the rules. It's been called a lame duck majority because when the new members arrive in the next session there won't be quite as many Republicans and/or possibly not even the support for "right to work" legislation. But just as Scott Brown's election didn't stop the PPACA, Republicans similarly intend to work with the numbers they have while they have them. Ironically Scott Walker says he has no interest in "right to work" legislation.

So what is "right to work" legislation? It's quite simple. It plays on people's financial incentives and uses the free rider problem to destroy unions. When a union is established in a given arena it has to represent everyone in that workplace, whether they joined the union or not. It can't restrict higher wages and better benefits only to union workers. It can't force union membership.It would be a good thing if the union could restrict better wages to those who joined the union but that's against the law. Certainly no employer would ever go for that. So as a result unions have to have a method by which to ensure that there is some ability to ensure that everyone in the workplace has some skin in the game. For union members this is where union dues come in. For non-union members this is where "fair share" provisions come in. These monies are part of what allow the union to continue to exist and have the wherewithal to fight back against management overreach, whether that is in court or simply by organization and communication among workers.

"Right to work" legislation strips unions of the ability to obtain monies from people in a shop where there is a union. This sounds good no? It's expanding the worker's choice no?

Not really. This means that everyone, union worker or not, then has a MASSIVE incentive to withhold dues or fair share provisions because they get the benefits of union representations without the costs. Over time the union can't economically function with all the free riders and can't legally or politically function with smaller and smaller membership. So goodbye union. In other arenas people understand the free rider problem.

This is no different from giving someone like me the option to withhold taxes from the US government because I am bitterly and profoundly opposed to its foreign policy. I have no intention of leaving the US and going to live in another country. I just don't want to pay taxes. If everyone did that the US could not continue to exist. Now unions aren't nation states but the concept is exactly the same.

Do "right to work" states have better economic outcomes as companies that were avoiding the state because of grasping, overreaching unions, come flooding into the state?

The evidence seems to say no those "right to work" states aren't better off. "Right to work" states are associated with lower income and higher numbers of uninsured people. If you want a low wage state with fewer worker protections, then by all means support "right to work" legislation.

And this soon to be law can't be overturned by referendum because the Republicans were smart enough to add appropriations to the bill. Under Michigan's constitution, doing that means that the law is not subject to referendum of the people. Assuming that Governor Snyder signs the legislation, the only way to overturn it would be to replace Snyder and a sizable number of Republicans in 2014. So we're living in interesting times in Michigan.

Questions

1) Do you support Right to Work legislation?

2) Do you live in a Right to Work State?

3) If Snyder signs the bills, what should the response of the labor movement be?

Shutting Detroit Down

What's happening in Detroit?

You may not have noticed with all the national media attention on the Democrat-Republican fracas over the budget, the deficit, the Obama tax cuts, and payroll tax cut political gamesmanship but by some estimates the city of Detroit is on the verge of going belly up as soon as April of 2012. Detroit has a deficit of roughly $150-200 million and accumulated debt of somewhere around $10 billion. Vendors are already waiting in some cases as long as 18 months to get paid.

This has made some of the usual suspects happy but most people are angry or sad. Under the emergency financial manager law (which was given new teeth under the new Republican Governor's administration) the state has the power to appoint a manager who would have the authority to run the city, void union contracts and privatize services and sell assets. 

This being Southeast Michigan (one of the most segregated areas in the US) the race issue is never far from people's minds. Detroit is between 80% and 85% Black. With a few exceptions most suburbs are the reverse image of that demographic.  Detroit has had black political hegemony since the early seventies or so. Within the city there is INTENSE paranoia about the idea of a white governor appointing someone to run Detroit and even more suspicion about white suburbanites taking over Detroit's "jewels". Honestly, some of this is nonsense but some of it is 100% accurate as Detroit and the surrounding suburbs have battled for decades over the Detroit Water Department, (Suburban municipalities have urged greater suburban control over the Detroit water department-a stance greatly at odds with their otherwise anti-regionalism preferences), the Detroit Zoo, the Arts Institute and Library, mass transit, Detroit's income tax on suburban workers, and many other things.


Bottom line is that Detroiters feel it's their city so they get to vote and if you don't like that, quit your whining and move into the city. Otherwise have a nice long drink of STFU. Suburbanites feel that fine if you don't want our say, stop taking our money. We'll take that deal in a heartbeat.

How did this happen?
The city of Detroit has 48 different unions. They have generally refused to offer any more concessions, claiming that they've given enough. They blame bad outsourcing and private contractor decisions for this crisis. The unions have offered some ideas on solving the problem, which include such things as cutting Blue Cross Blue Shield out of the medical payment process and eliminating private contractors. The city council has seized upon an unpaid $200 million block of aid that the State of Michigan was supposed to pay Detroit as the proximate reason for the crisis. However the State of Michigan cut back aid to several localities as it is also cash poor. The city also would like the State of Michigan to forgive some of its debt and help the city to do a better job of collecting city taxes-from both residents but especially businesses.

If Detroit collected all of its owed income taxes each year, the city would receive an additional $155 million annually that could wipe out the deficit in a few years and avoid massive service reductions and layoffs. At a time when the state is about to begin dissecting the city's troubled finances, about half of Detroiters and non-Detroiters who work in the city fail to pay their city income taxes. But city officials said to aggressively go after the delinquent taxes would be time-consuming and require more employees and sophisticated technology than the city can afford. That's why Mayor Dave Bing is lobbying state lawmakers to enact a law that would require suburban employers of Detroiters to automatically withhold income taxes and electronically deposit the money into a city account.

STORY

The rising costs of health care for retirees and some bad decisions with the pension fund are an additional problem. In my opinion the primary cause for this is that Detroit simply has too many costs for the population that it supports. Things that could be done when Detroit was home to roughly a million people can't be supported when only about 700,000 live there. The property tax base and income tax base no longer exist to support the current payroll and other items. There is just not enough money coming in. People have left for reasons both good and bad. But at the end of the day, they've left.


All the other race-baiting and political posturing aside that's what it comes down to. It's like trying to make a monthly payment on a new Bentley Arnage when your job description has changed from international rock star to Olive Garden busboy. Eventually, the numbers turn against you. No matter how much you may hate it, you will need to accept (grudgingly and temporarily perhaps) your new reality. To paraphrase Moe Greene from The Godfather  "..the City of Detroit ain't even got that kind of muscle no more!!!"










What happens next?

Council members JoAnn Watson and Kwame Kenyatta

Well that is indeed the million dollar question. The city council, union leaders and Mayor all came together last Friday to announce that although they had not solved the problem they would solve it and didn't need or want any outside help-period. However this was too late as the State Treasurer announced a 30 day review of the city's finances to determine whether an emergency manager would be appointed. The city is of course free to solve the crisis before then but many think this unlikely. Although it would be more symbolic than not the City Council has so far refused to cut its budget by the amounts it wants other departments or workers to accept.


Detroit faces privatization of lighting, waste management the zoo, the water department, parking, parks, Belle Isle, mass transit, fire, police and other normal city services. This looms in the future, whether it be through an unprecedented bankruptcy or the emergency manager process. In short, Detroit would temporarily cease to exist as an independent political entity. Some analysts feel that emergency manager or not bankruptcy is inevitable.


Others think that the both the emergency manager law and its application (most -not all-of the Michigan cities or institutions where the law has been applied or invoked are majority Black) is unconstitutional and therefore the law should be repealed. There is a petition drive to do just that. US Congressman John Conyers has also asked the Justice Department to review (i.e. block) the law.

Washington — U.S. Attorney General Eric Holder is reviewing whether the state of Michigan can legally appoint an emergency manager to oversee the Motor City's finances, Rep. John Conyers, D-Detroit, said late today.Conyers said he spoke to Holder about his request that the government move to block the law."(Holder) said, 'I've got my lawyers working on it right now,' " Conyers said, adding he spoke to the attorney general about 4 p.m. today. "He's trying to find out if my allegations of great constitutional concerns are valid. That's what he's got several hundred lawyers for."The Justice Department confirmed Holder and Conyers spoke — and reiterated that the Justice Department is reviewing the letter.Conyers, the ranking Democrat on the House Judiciary Committee, sent a letter Dec. 1 to Holder asking him to review whether the state's emergency financial manager law is constitutional and to intervene if necessary to block it. "(Holder) told me he got the letter and he's going to act on it."

LINK

Detroit Mayor Dave Bing

My take is that even if we believe that this is a dastardly corporate Republican plan to steal and sell off Detroit's assets for their own gain while disenfranchising thousands of black voters to boot, who let things get to this point in the first place?  Whether or not there is an emergency manager appointed is almost irrelevant given the cash flow needs of the city. Detroit leadership is coming in a day late and a dollar short. I mean seriously, folks. You can't say and believe in your heart of hearts that those folks over there hate us and want to control us and then behave in such a manner that shows that despite all of your protestations to the contrary, you can't successfully run your own affairs. This is not a race thing in my opinion though there are elements of that which must be addressed. It's a pure numbers situation. The costs are too high; the revenue is too low. That's been an obvious problem for at least the past 15 years. Now the bill is coming due. This is of immense personal interest as there are people very dear to me who rely on city pensions. Bankruptcy could-probably would-put some or all of those pensions at risk. This goes into uncharted territory as Michigan law places high (but not insurmountable) protections around pension payments-perhaps The Janitor or Old Guru can speak to the legalities.


I'd like to believe that Detroit will find a way out of this but I really don't think it will. Time will tell. Maybe the state should just say," Fine. You the man. Handle it yourself-go bankrupt -just don't come crying to us."


QUESTIONS
1) Do you think the emergency financial manager law is constitutional?
2) Should public sector unions and outsourcing contracts have automatic spending reductions inserted based on the city's financial health?
3) Do you think bankruptcy is inevitable for Detroit?
4) Why hasn't city leadership been able to craft a plan to solve this issue?

Wisconsin - The Face of Democracy: Recall Elections

Democracy at Work

Democracy is a form of government in which all eligible people have an equal say in the decisions that affect their lives. Ideally, this includes equal (and more or less direct) participation in the proposal, development and passage of legislation into law.

Scott Walker marched into the Wisconsin Capitol on January 3, 2011 with an anti-Wisconsin agenda - dismantle the unions, abolish women's rights and put the state of Wisconsin on a path backwards. Swept into office on the Republican wave, Walker was said to be a moderate republican, who would reduce taxes, cut spending, create jobs and grow the Wisconsin economy. This all sounded great to the voters of Wisconsin, so they elected him Governor with 52% of the vote. Unfortunately, voters were unaware of Walker's plan to balance the budget on the backs of government employees with the exception of law enforcement personal and firefighters. With control of Republican State Senate and legislative maneuvers Scott Walker was able to pass his anti-union bill and sign it into law on March 11.

The people of Wisconsin did not sit around and accept the bad cards they were dealt, they galvanized and took democracy into their hands. Using the Wisconsin Constitution, the put into play a series of unprecedented recall elections. Since 1908, only 20 recorded state legislative recall elections have taken place.

Recall Races

(District 2)

(R) Robert Cowles vs. (D) Nancy Nusbaum

(District 8)

(R) Alberta Darling vs. (D) Sandy Pasch

(District 10)

(R) Sheila Harsdorf vs. (D) Shelly Moore

(District 14)

(R) Luther Olsen vs. (D) Fred Clark

(District 18)

(R) Randy Hopper vs. (D) Jessica King

(District 32)

(R) Dan Kapanke vs. (D) Jennifer Shilling

Per The Associated Press:

Republicans held onto control of the Wisconsin Senate on Tuesday, beating back four Democratic challengers in a recall election despite an intense political backlash against GOP support for Gov. Scott Walker's effort to curb public employees' union rights.

Fueled by millions of dollars from national labor groups, the attempt to remove GOP incumbents served as both a referendum on Walker's conservative revolution and could provide a new gauge of the public mood less than a year after Republicans made sweeping gains in this state and many others.

Even though the Democrats failed to capture the majority in the State Senate through these recalls, I think they set the tone for 2012 and have given Americans a bigger picture - democracy at work. I don't see this as a loss. This is a sign of bigger things to come and more work to be done.

Did Citizens United play any role in the outcome of the recall elections?

Do yesterdays recall elections set the tone for 2012?

Did Democrats loose the War or did they win the Battle?

Will the recall elections impact the likelihood of Scott Walker being recalled in January 2012?