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December 12, 2012
Will Right-To-Work Make Unions More Attractive In Michigan?
Source: Forbes Staff
By: Daniel Fisher

There’s a mystery at the core of the fight over right-to-work laws like the one Michigan passed yesterday: If workers aren’t required to pay union dues, why would they?

Nevada, for example, is a right-to-work state yet its casino and hospitality industry is heavily unionized and those unions helped deliver that otherwise conservative Western state for Democratic Sen. Harry Reid as well as President Obama. In a sign of the city’s clout, UNITE HERE has 60,000 members in Vegas and recently elected the head of Local 226 president of the national union.)

Now Michigan gets to test whether unions can survive the loss of one of their most powerful financial and political levers, contracts that require employers to deduct dues from each worker’s paycheck. I spoke with a lawyer who has negotiated labor contracts for 39 years in Michigan and other states and he isn’t sure himself what the impact will be.

“On the one side, one of the chief impediments to organizing a group of workers is explaining to them that they will have to pay union dues,” said John Hancock, a partner with Butzel Long in Detroit. “Maybe now they’ll say, `if it’s not going to cost me anything, why not see if the union can do any good for me?’”

On the other hand, if enough workers decline to pay dues, the union won’t be able to support the staff to handle negotiations, let alone matters such as grievances and arbitration. Hancock said he negotiated a contract with a hospitality union that included a clause allowing workers to opt out of dues — the employees were threatening to decertify the union otherwise — and the money promptly dried up. The workers still technically belong to the union, he said, but the yearly contract negotiations are a mere formality and the union barely participates.

Hancock has negotiated with the UAW at auto plants in right-to-work Tennessee and Oklahoma, however, and thinks the union has been successful in collecting dues even though workers don’t have to pay them. Part of that might be the 6-foot-5-inch union chief who sat across the table from Hancock in one of those negotiations; he told Hancock he just “goes out and talks to them three or four times” to get members to sign forms allowing the employer to deduct dues for a year.

But strong unions that deliver higher wages and pension benefits for workers, he thinks, have less difficulty convincing workers to pay for what they do. Dues for the larger unions typically work out to the equivalent of about three hours of wages per month, he said.

“I just don’t see those people not paying,” he said. “There’s so much peer pressure.”

A few decades ago, Hancock said, the UAW was negotiating from a position of strength.It had more than 1 million members and six or seven locals just on the west side of Detroit.

“The car companies used to negotiate contracts not knowing how they would pay for them, and just past along the cost to the customers,” he said.

Now membership is around 390,000 — plus 600,000 retirees pulling health and pension benefits from the union. The UAW has had to switch from pushing for more, more, more to salvaging what it has. Hancock says he starts negotiations now with 3 days of presentations about the company’s finances and market conditions. “That’s not something I did when I started,” he said. “You didn’t have Econ 101. Nowadays its trying to get them to understand they are in a competitive situation.”

Hancock said a representative from another union recently told him negotiating in recent years has been like playing poker with somebody who doesn’t have any money — intellectually stimulating but not worth much in the end. Even the UAW accepted a two-tier pay structure in its latest negotiations as well as swapping guaranteed pension benefits for a 401(k) for new members.

The future of unions in Michigan ultimately depends far more on how the state’s economy does than the right-to-work law that passed yesterday. The strongest unions will survive because they deliver benefits to their members. The harder thing will be convincing workers in other industries, especially low-paying ones, that handing over part of their paycheck every month will buy them enough to make the bargain worthwhile.



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