The Rust Belt gets tired of the label

“Right to work” laws are no longer just southern.

Such laws, which prohibit union agreements that require employees to join unions or pay the equivalent due, have long been a staple of the southern and interior western states. But Wisconsin is about to become the latest example of a trend in which such legislation is gaining traction in other parts of the country.

As The Wall Street Journal noted, if Wisconsin passes its currently proposed law, it will become the 24th state to have such legislation on the books. (1) The state Senate passed the bill, and as of this writing, the Assembly is expected to pass it shortly. Governor Scott Walker has already said that he will sign such a bill if it reaches his desk. Four years ago, Walker’s decision to push through legislation restricting the reach of public sector unions triggered the controversial recall election that made national headlines (and won).

While only three states, other than Wisconsin, have passed their right to work laws in the past 10 years, it is worth considering that two of those three states, Michigan and Indiana, are in the Rust Belt. (The third, Oklahoma, is solidly Southern and Southwestern in culture.) In fact, the Wisconsin bill was based, at least in part, on law passed in Michigan.

It is almost certain that what is driving this expansion trend is the manufacturing sector in general, and automobile manufacturing in particular. Foreign automakers have been quick to expand into southern states, where they can attract non-union workforces. The United Auto Workers union has struggled to gain a foothold in foreign-owned plants in the south, and many experts have cited right-to-work laws as a major barrier. Although the UAW managed to win some recognition last year at a Volkswagen plant in Chattanooga, Tennessee, it lost a worker vote that would have allowed it to exclusively handle collective bargaining. Tennessee has been a right-to-work state since the 1940s.

Legislatures at the heart of the traditional American auto industry seem to realize that the only way to compete is to create an equally attractive legal and economic environment.

It’s not just about automakers. Perhaps even more important is the supply chain that surrounds the industry: smaller manufactures clustering within hours of auto assembly plants to produce parts that typically need to be delivered on short notice, as automakers already they don’t want to have large inventories of parts. and supplies. It will be interesting to see if this legislative trend expands beyond the upper Midwest to places like California and Washington state, which have seen aviation manufacturing jobs move to places with friendlier business climates.

At the state level, the trend is something of a safeguard against an aggressively pro-union National Labor Relations Board. The federal government is pushing hard to allow unions to demand quick elections with less time for companies to respond and explain to workers why they may not want to organize. The new rules will go into effect this spring, although legal challenges are expected. In right-to-work states, the NLRB’s exaggerated position is less threatening to employers and workers because even in unionized factories, some workers will have the right to choose not to pay union dues. Falling union membership levels may well indicate that workers are skeptical about what they get in exchange for those often expensive annual union dues. According to the Bureau of Labor Statistics, only 11.1 percent of salaried workers were union members in 2014, compared with 20.1 percent in 1983. The rate in the private sector is below 7 percent. . (two)

It is difficult enough for the United States to compete for manufacturing jobs, thanks to our illogical tax system, which imposes a single burden on everything produced for export, limiting our manufacturing to a purely domestic market and therefore renouncing the scale economics. Even that limited domestic manufacturing is hampered by inefficient and costly union contracts in many industries, making the prospect of US-based manufacturing doubly unattractive.

The results of these policies are evident in the very name “Rust Belt”. Rust Belt states are getting tired of the label and reacting logically. Time will tell if that logic will spread to the rest of the country.

Sources:

1) The Wall Street Journal, “Wisconsin Senate Passes ‘Right to Work’ Bill Amid Protests”

two) Bureau of Labor Statistics, “Summary of the members of the Union (2014)”