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Christopher Bjorke, Forum Communications, Published December 15 2012

It hurts unions, but does it help states’ economies?

GRAND FORKS – Michigan, the heart of American manufacturing, became the latest state to become a “right-to-work” state this week, prohibiting compulsory union participation.

The move was greeted by demonstrations by protesters angered by the erosion of union power in the state.

In North Dakota, however, the issue is less emotional. It passed its right-to-work law in 1948 as part of the first wave of states to adopt such laws after they were made possible the year before.

“North Dakota was one of the original 19,” said Bruce Byars, a professor with University of North Dakota’s College of Business and Public Administration. “We were afraid of farm labor being unionized.”

Michigan’s law bans mandatory dues payments to unions by employees at worksites with union organization. North Dakota’s law says that employment cannot depend on a worker’s membership in a union.

Right-to-work laws can stir up strong feelings shaped by whether one identifies with labor, sides with employers, sees unions as impeding economic development or bolstering wages.

Perspectives

Even the words “right to work” can rankle.

“I believe ‘right to work’ is a misnomer. It doesn’t give workers any rights,” said Tom Ricker, president of the North Dakota AFL-CIO, which encompasses several unions active in the state. “I prefer to call it the right to work for less.”

Ricker said the laws in other states weaken unions’ power and decrease wages and worker safety. Despite being a right-to-work state for decades, the law has not enticed employers from other states to build factories here and hire workers, he said.

“It did not create jobs,” he said.

From businesses’ perspective, the right-to-work laws contribute to a place’s business climate and are a factor in businesses’ decisions on where to place production. Andy Peterson, president of the Greater North Dakota Chamber, cites the relatively strong economies of the Upper Midwest.

“You’re looking at Iowa, South Dakota, North Dakota, Nebraska,” he said. “A portion of that is due to right-to-work laws.”

While North Dakota has both union and non-union worksites, as do states without right-to-work laws, the law gives employers more flexibility with their workforces, Peterson said.

He named Marvin Windows as a manufacturer lured to North Dakota by its right-to-work law. The company has production plants in Grafton, N.D., and Fargo but is based in Warroad, Minn., where there is no state law against mandatory union membership.

Marvin spokesman John Kirchner said the law was one of many factors in choosing North Dakota.

“I wouldn’t say it was a main factor by any means,” he said. “It’s what contributes to the overall business climate.”

Over the years, manufacturers in the auto industry and other sectors have expanded production from non-right-to-work states in the north – also called closed-shop states or even right-to-bargain states – to right-to-work states in the South.

Kirchner said he expected some of those companies could bring jobs back to Michigan.

“They’re building in Georgia, Tennessee or Alabama,” he said. “I think it’s a very positive thing for Michigan.”

Byars said he didn’t expect a rush of jobs to Michigan now that it is a right-to-work state, “but they may see some old employers coming back,” that were outsourced by the auto industry.

“One of the factors if I’m going to locate a plant is unionization,” he said. “It could be a deciding factor when it comes down to it.”

Uncertain effect

It isn’t clear what impact the law has on wages, but lower wages are part of the argument for the laws, according to Aaron Sojourner, an assistant professor in the Work and Organizations Department at the University of Minnesota’s Carlson School of Management.

“I think the basic economic argument is we need to reduce wages so we have more employment,” he said.

Wages in North Dakota have long lagged behind other states, including its more pro-union neighbor to the east, Minnesota, Byars said.

“If we look just across the river, they generally pay higher than we do,” he said.

Despite claims made about the laws, saying how right-to-work laws affect states’ economies or businesses’ actions is hard, if not impossible. They are a factor among many, such as location, workforce and transportation that go into a company’s decisions.

“To be able to say right-to-work laws, independent of everything else, have their own effect is incredibly difficult,” said John Budd, director of the Center for Human Resources and Labor Studies at the Carlson School.

Budd said the laws tend to be more motivated by political reasons rather than economic ones. Banning automatic union membership reduces the power of unions, traditionally a strong ally of the Democratic Party, and is typically supported by Republican politicians.

“The clearest thing right-to-works laws do … is make it more difficult to collect dues,” Budd said. “I think it really does come down to politics, not economics.”


Christopher Bjorke writes for the Grand Forks Herald


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