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Latest News - December 2012

December 11, 2012
The Astonishing Decline of Unions, in Michigan and Elsewhere
By: Rick Newman

Union members rally at the Michigan State Capitol to protest a vote on Right-to-Work legislation in Lansing, Mich., Dec. 11, 2012.

A lot of changes in the economy during the last few years were hard to predict, such as a gargantuan housing bust and a financial panic that could have rivaled the Great Depression. To that list, add the remarkable new limits on unions in, of all places, Michigan.

The Republican-controlled Michigan legislature has passed two bills, which Gov. Rick Snyder plans to sign, that will make the Wolverine State the 24th to adopt "right to work" laws. The upshot is that workers cannot be required to pay union dues as a condition of employment. Theoretically, that means workers wouldn't need to belong to a union to drive rivots on a General Motors assembly line or sweep the gymnasium floor at a local school. While the new laws won't necessarily dissolve existing unions, they'll put new limits on their ability to expand and make it easier for employers to hire non-union workers.

Michigan has the nation's sixth-highest unemployment rate, at 9.1 percent, and it's reeling from a long-term manufacturing decline that has left its biggest city, Detroit, so dilapidated that some critics wonder if it can be saved. Still, the turn of popular opinion against unions in Michigan is akin to pot-smoking pagans driving the Mormons out of Utah: It's a revolution of sorts, with the old order being unceremoniously booted.

Michigan wasn't exactly the birthplace of unions, but they grew up there. The United Auto Workers was formed in 1935, and a string of strikes across Michigan over the ensuing years led General Motors, Ford and other carmakers to formally recognize the unions. As the auto industry surged following World War II, the UAW surged right along with it. From time to time there were bitter strikes and hard-fought deals, but by 2000 the automakers and their unionized workers had developed a grudging respect for each other and a form of peaceful co-existence.

With globalization, of course, union membership has been declining, and the 2009 bankruptcies of GM and Chrysler forced the UAW to give up many of the perks and benefits it had spent decades negotiating for, to help save their troubled employers. But the decline of unions in Michigan and elsewhere has implications for workers throughout America, whether they belong to unions or not.

First, the U.S. economy has become a buyer's market when it comes to labor, with employers holding most of the cards. Unions were built around the premise that workers were more or less interchangeable, with wages determined by the unions' bargaining power, not necessarily by the value of the skills each worker possessed. That has changed. One reason union power has crumbled is that many big companies can now build their products wherever labor is cheapest, including overseas. The best way to earn more is no longer to join a union; it's to develop needed skills that other workers don't have. Union power might return if there were a sudden shortage of labor, which would give workers more leverage. But nobody foresees that happening, except perhaps in a few specialized fields.

We are also entering an era in which Americans value individual initiative more than collective welfare. For better or worse, our modern heroes are entrepreneurs like Steve Jobs and Mark Zuckerberg, not team players such as union leaders or even CEOs. This is happening as public trust in government and other institutions is falling to record lows, as is loyalty between companies and their workers. More Americans are striking out on their own, some because they want to, others because they have no choice. We're becoming a DIY nation, and unions don't fit that identity.

Unions have fallen out of step with the initiative many Americans need to show these days, and the sacrifices they need to make. Most unions have held on to defined pension plans, guaranteed healthcare and other perks far longer than the overall workforce has. In some municipalities, this is forcing a showdown between taxpayers being asked to fork over even more money so unionized firefighters, police officers, teachers and sanitations workers can enjoy more job security and better benefits than the people paying their salaries. That sort of imbalance can't last very long in a democracy.

Finally, Michigan is undergoing a demographic shift in which union members and their families become a smaller and smaller part of the population, as unionized companies fold or move elsewhere, and new companies avoid Michigan while scouting lower-cost states like South Carolina, Alabama, or Texas. The whole nation is grappling with trends like this as the value of skills changes rapidly and employers test just how far they can push their workers. In Michigan, that test may only be getting started.



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