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Michigan's right-to-work laws will ripple across the US

Whither Michigan, so may go other union-friendly states.

The right-to-work legislation signed by Michigan Gov. Rick Synder on Tuesday marks a victory for Republican lawmakers and others who believe that unions hurt the U.S. economy. The pair of new laws, which make Michigan the 24th right-to-work state, make it harder for its workers to organize and to maintain power because workers covered by union contracts will no longer be required to pay dues.

The impact of Michigan’s decision will be felt far beyond the borders of the once-staunchly pro-union state. Even though the ranks of union workers have been dwindling across the nation, the influence of big unions is still felt from the halls of government to corporate board rooms, and their clout affects everything from the economy to the political field. But the rising number of right-to-work states could further drain that influence.

"It’s a union story today, and a much broader economic story tomorrow,” said Harley Shaiken, a professor at UC Berkeley and an expert on union issues. 

That's partly because there are so few union members left for such legislation to directly impact. Only 11.8 percent of American workers, or nearly 14.8 million people, were union members in 2011, according to the Bureau of Labor Statistics. That’s down substantially from just a decade earlier, when 13.3 percent of workers, or 16.3 million people, were union members.

Even in Michigan – long considered the stronghold of unionized workers in America – just 17.5 percent of workers, or 671,000 people, are union members.

That’s marks a very steep drop from the early 1970s, when about 40 percent of workers in the state were unionized, said Henry Farber, an economics professor at Princeton University and an expert on labor unions.

That figure has fallen steadily in the decades since, as heavily unionized automakers shed U.S. jobs because the auto industry became increasingly globalized.

Despite the gradual erosion of union representation in Michigan, Farber said it’s still a stunning change to see such a highly industrialized state adopt right-to-work legislation that severely limits labor’s power. 

He expects Michigan's legislation to have a major ripple effect on other historically labor-friendly states like New York and New Jersey.

“The symbolism is mainly that it will embolden opponents in other states to try to do similar things,” he said.

That, in turn, could deal another blow to already weakened unions.

Those who oppose unions say that’s a victory for businesses who want more flexibility in how they manage their work forces, and for workers who don’t want to be constrained by union rules or collective bargaining agreements. That, they say, will ultimately create more jobs and help the state’s economy.

“The right to work law will provide significant economic benefits for the state’s workers and small businesses,” Mark Mix, president of the National Right to Work Committee, said in a video posted on the organization’s website following the move in Michigan. 

But union proponents say such ripple effects could extend beyond just the minority of Americans who are directly covered by union contracts. They say that without unions, workers are at risk for lower wages and less job security.

Shaiken, the Berkeley professor, argues that unions are often key advocates, on both a state and national level, on issues that affect workers more generally. Those include affordable health care, unemployment insurance, Social Security and the minimum wage.

Michigan's new law also could have political implications for Democrats who have relied on unionized labor's political and financial support, Shaiken said.

Major unions such as the AFL-CIO and the UAW were staunch supporters of President Barack Obama’s successful re-election bid. Any moves that hurt their membership numbers, or ability to collect dues, also could impact their ability to support Democrats in future elections.

There also could be a ripple effect on some unions' ability to financially support political moves that would help preserve their own livelihood, said Michael Hicks, director of the Center for Business and Economic Research at Ball State University.

His research has shown that it's quite difficult to judge the impact of right-to-work legislation on things like wages. But he said such laws can reduce the amount of money unions collect because workers are no longer required to pay dues, and many people opt to pocket that money instead.

He thinks that could affect how much clout public sector unions, such as teachers, have to help support political efforts for things like maintaining pension benefits. Those are the type of hot-button issues state and local governments are sure to take up as they work to deal with severe budget shortfalls in the coming years.

"I do really believe that the biggest argument, the biggest push, for this (right-to-work legislation) was designed to weaken unions in their negotiations with state governments," Hicks said.

Farber, the Princeton professor, expects that there will be a modest drop in the number of workers who are unionized in Michigan once the legislation goes into effect. Also, because workers could choose to not pay dues and still be represented, unions could see less money coming in.

In addition, he said, new businesses or plants may be less likely to unionize because of the weakened union power.

Farber’s research also has shown that strongly unionized work forces sometimes create a “threat effect” where other workplaces offer higher wages and better benefits because they worry that if the workers aren’t treated as well they will unionize. He said that threat is lessened in right-to-work states.

“To see Michigan go this way – it’s quite remarkable, really,” he said.