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EKVALL: Right to work economics cloaked in politics

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By Ryan Ekvall | Watchdog.org

LANSING – After the sound and the fury at the state Capitol, Michiganders woke up Dec. 12 in the nation’s 24th right to work state the same way they arose Dec. 11 — with the 5th worst unemployment rate in the country.

As an aftermath to Tuesday’s raucous protests, We Are Michigan – a union backed activist organization – staged multiple, simultaneous “silent protests” throughout the state. The idea was, as one protester put it, that “being silent is the best way to be heard.”

TAPE IT SHUT: In Lansing, the protesters wore duct tape across their mouths with the words, “1500 less,” citing flawed statistics “proving” that wage earners in right to work states were economically worse off than their forced unionism counterparts.

In Lansing, the protesters wore duct tape across their mouths with the words, “1500 less,” citing flawed statistics “proving” that wage earners in right to work states were economically worse off than their forced unionism counterparts.

The $1,500 figure fails to account for cost-of-living and other differences among the states.

Even the president weighed in:

“These so-called right-to-work laws, they don’t have anything to do with economics, they have everything to do with politics,” President Obama told union laborers in a plant outside of Detroit the day before Gov.  (Rick) Snyder signed right to work into law. “What they’re really talking about is giving you the right to work for less money.”

The president, whose campaign was backed mightily by unions, may have pulled a bait-and-switch; saying right to work was not about economics but politics, and then going back to economics to make his point. But was he correct?

Not according to research by the Mackinac Center for Public Policy, a Michigan-based public policy think tank.

“Since (Indiana passed a right-to-work law), the Hoosier State has added 43,300 jobs, while Michigan has lost 7,300. Indiana’s manufacturing sector added 13,900 new jobs, while Michigan’s lost 4,200. Nationally, the numbers are even more telling. Between 1980 and 2011, total employment in right-to-work states grew 71 percent, while employment in forced unionism states grew just 32 percent. Employment in Michigan grew just 14 percent during that same time. Inflation-adjusted compensation over the last decade grew 12 percent in right-to-work states, but just 3 percent in forced unionism states.”

In a 1995 study about cost-of-living and tax-level differentiation between the states, Dr. Barry Poulson, economics professor at the University of Colorado-Boulder, concluded:

“The average cost of living-adjusted household income in SMSAs (standard metropolitan statistical areas) in Right to Work states is $47,320. Average adjusted household income in SMSAs in forced-unionism states is $46,507. In terms of what their money income can buy, families living in SMSAs in Right to Work states are $813 better off than families living in SMSAs in forced unionism states.”

HAYEK: Nobel-prize winning economist F.A. Hayek wrote it is “the complete inversion of the truth to represent unions as improving the prospect of employment at high wages.”

Nobel-prize winning economist F.A. Hayek wrote in 1978, “It is a complete inversion of the truth to represent unions as improving the prospect of employment at high wages. They have become in Britain the chief cause of unemployment and the falling standard of living of the working class”

But it doesn’t take an economist to see that.

“They would come out with the contract and say, ‘This is what you’re going to get paid and this is what you’re going to get paid,’ and in the meantime what would happen? The price of gasoline would go up, the loaf of bread would go up, everything goes up,” a Salvation Army volunteer and retired union laborer told Watchdog.org. “As soon as the unions get that raise, everything goes up. So they don’t gain a whole hell of a lot of money.”

As union leaders fear the loss of union dues from employees who may now choose whether they find their union beneficial enough to support it financially — and unions in Michigan heavily back Democratic candidates for office – it appears the president was right. The fight over right to work legislation has nothing to do with economics and everything to do with politics.

Contact Ryan Ekvall at rekvall@wisconsinreporter.com

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Ryan Ekvall uncovers government waste, fraud and abuse for Wisconsin Reporter. His work has appeared at Reason, Fox News and Human Events.