Almost every time the Western Growers’ Board of Directors meets, it has to read and hear lengthy reports on a growing list of anti-business legislation and regulations proposed or in force in California. The directors from Arizona cast glances at one another and smile. You can almost hear them thinking, “Thank God we live in Arizona.”
On the whole, Arizona’s laws and regulations are nowhere near as cumbersome, costly or onerous as those of California. Regulatory compliance in Arizona starts with the idea that it’s good to have profitable businesses that employ Arizonans and pay taxes. Too often in California, regulatory compliance starts with the idea that businesses exploit employees and harm the environment. In the California Legislature, the outsized influence of labor unions, as well as environmental activist groups, results in a yearly flood of proposed laws that would add new layers of rules and costs on top of the tens of thousands of laws and regulations that have accumulated over the last few decades.
Why do labor unions hold such overwhelming influence in Sacramento? In Arizona, a right-to-work state (where workers do not have to join a union or pay union dues as a condition of employment), union membership is declining. California, on the other hand, is home to the largest number of union members in the country (2.4 million). It is a forced-union state, not a right-to work-state, and no change in that status is anticipated. While union membership in the United States is declining, it increased last year in California by 110,000. In Arizona, it fell from 149,000 to 125,000 (5.1 percent of the workforce). Art Pulaski, head of the California Labor Federation says a big reason that unions in California are doing better than those in other states is that California’s unions have built impressive political power, helping Democrats clinch a two-thirds supermajority in both houses of the state legislature in the last election.
Once-upon-a-time, unions protected the common interest of workers. The early labor movement led efforts to stop child labor, give health benefits and provide aid to workers who were injured or retired. With few laws or regulations governing the employer-employee relationship, unions helped drive better wages, hours and working conditions for millions employed in America’s rapidly-growing industrial sector. Unions offered value to members, and their achievements translated directly to the foundational laws that continue to protect workers today. But what value does a union bring to its members today? How does it help workers when employers have to spend more and more money on regulatory compliance and mandates, leaving less for higher pay and benefits?
What does it say about the labor movement that its political power relies on forced membership in unions? The fact is, if you want to work for a company that is unionized in a forced-union state, you must join that union, and financially support it even if you didn’t vote for it or choose it, and then must pay dues to it which can be used for purposes you do not support like making donations to candidates or political causes you oppose.
I believe it’s unfair that unions can require new and existing employees to join or pay fair-share fees when the only alternative is to look for another job. Early in my work-life it happened to me and I didn’t like it. But in the larger picture, the financial consequences for business can be serious and for the economy, worse. The vibrant auto industry that defined Detroit is now but a shadow of its former self. Only two auto factories exist there today, and it’s no secret that unions played the major role in its demise. Unions wielded enormous influence in the Michigan Legislature for decades while Chrysler, GM and Ford famously struggled against the United Auto Workers (UAW) union and its ever-increasing demands. At one point, hourly wages reached $78, including gold-plated benefits for workers, and $2,000 per car was tacked on to cover retiree health care and pensions. American car companies were priced out of the market. Since 1979, UAW membership has declined 74 percent. Today, unemployment in Detroit is 16 percent and, Detroit-based auto companies have shed 200,000 jobs in the last 12 years.
Positive change is possible. Economist Thomas Holmes compared counties close to the border between states with and without right-to-work laws. He found that the cumulative growth of employment in manufacturing in the right-to-work states was 26 percentage points greater than in the forced-union states. The Mackinac Center for Public Policy reported 71 percent employment growth in right-to-work states from 1980 to 2011, while employment in forced-union states grew by less than half of that.
Michigan voters may have started to make real change. In 2012, labor unions attempted to amend the state constitution with a ballot measure to prohibit the Legislature from adopting right-to-work legislation. Michigan voters rejected that amendment by 15 points, paving the way for the Legislature to pass a right-to-work bill, which Governor Snyder signed into law. So, if a right to work law can be passed in Michigan, home of the mighty UAW, it can pretty much happen anywhere else, can’t it? I hear Illinois and Missouri may be next.
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