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Today’s number

Thursday, Dec 12, 2013

* I don’t know if this statistic is even close to accurate, but it’s fascinating. From a Reuters story about Michigan’s new “right to work” law

Tracy Bosman, a Chicago-based site selection consultant with Biggins Lacy Shapiro & Co, says Michigan’s law has generated interest in the state.

Up to 50 percent of manufacturers automatically screen out any non-right-to-work state, Bosman said, so Michigan was out of the picture for many companies looking to add production capacity.

“While it does not guarantee success for Michigan, it does at least mean the state will get a second look from firms that automatically excluded it in the past,” she said. [Emphasis added.]

Discuss.

- Posted by Rich Miller        


30 Comments
  1. - Chicago Cynic - Thursday, Dec 12, 13 @ 10:16 am:

    It’s a race to the bottom. Which state can give away the most. Which can offer cheapest wages, etc. There’s an old saying in sales training, “never talk price until you’ve established value.” States are competing all on price and not much on value (educated workforce, other advantages of a particular locale).

    Illinois will never win on price, but we have a good case to make on value. Central location, access to transportation, educated workforce, etc. If those things matter more, we’ll often win. When companies are just looking at price, we’re far more likely to lose. Making us a right to work state is probably not worth it.


  2. - Skeeter - Thursday, Dec 12, 13 @ 10:30 am:

    Most of the “right to work” states also have high numbers of people on food stamps.

    Will becoming a right to work state bring jobs to Illinois? Probably, but we will end up paying part of their salaries.

    For percentage by state, see: http://online.wsj.com/news/articles/SB10001424127887324000704578386910572298122


  3. - Ghost - Thursday, Dec 12, 13 @ 10:30 am:

    the right to work states all have large populations of poor people who comsume large amounts of the States resources for things like medical care, food etc.

    Adding minimium wage jobs costs the State more money then they typically bring in, thus the State just subsidizes the company and gets nothing from the relationship.

    But if you want more people who dont earn enough to pay taxes while consuming available resources, this is a good move.

    Eventually we will replace china for cheap work force, and we can move to asia for good paying jobs….


  4. - wordslinger - Thursday, Dec 12, 13 @ 10:30 am:

    Interesting. MIchigan led the nation in new manufacturing jobs over the last three years before the right-to-work law.

    Among the Top 10 in new manufacturing jobs, it’s a mixed bag on labor laws.

    http://www.cnbc.com/id/100832195


  5. - Grandson of Man - Thursday, Dec 12, 13 @ 10:32 am:

    Michigan currently has a high umemployment rate. I saw a news story in which Michigan’s right to work law has not been working well to lower the unemployment rate. One person in the story complained that she used to be paid more, but in this current economy, she has to accept a job that pays way less.

    There is no doubt in my mind, that no matter what variables existed at the time, when the unionization rate was at its highest, there was more middle class prosperity. Now that the unionization rate is at a historical low, 11.3%, is it surprising that wages are flat and productivity is way up?

    There is an interesting story in Tennessee. Workers reportedly voted to unionize at a VW plant, because there is pressure to implement a works council, like VW has in other production plants. Oppenents of this are Republican politicians and Americans for Prosperity/Norquist types, the super-wealthy who benefit the most from keeping wages and benefits as low as possible. Tennessee has a lower per capita income than Illinois, as do almost all right to work states.

    We in Illinois have a lot to sell, in my opinion: tolerant social laws, great infrastructure and education, skilled workforce, etc. Now that we did pension reform, whether we like it or not, we can sell our attempt to get our financial house in order.


  6. - PoolGuy - Thursday, Dec 12, 13 @ 10:32 am:

    well, they’ve been saying manufacturing jobs are coming back to the US from China. I guess those companies are just trying to find “Chinese wages,” a la right to work states, since most of the jobs will be low-tech vs high-tech ones. so if cheap labor is all they want good luck.

    I guess we are supposed to show appreciation that manufacturing jobs are coming back so why complain about what they are going to pay.


  7. - DuPage Dave - Thursday, Dec 12, 13 @ 10:33 am:

    That’s a nice weasel-worded statement “up to 50 percent” of manufacturers…. That would include 10 percent, 20 percent, 30 percent, and so on. It sounds like the business this spokesman works for was looking for a headline.


  8. - Todd - Thursday, Dec 12, 13 @ 10:34 am:

    I dn’t buy it. Its like a talking point from the RTW foundation and their corporate spin masters.

    Look at McDonalds, their criteria is the traffic pattern between 6-9am as that is their biggest market.

    Now i know they are not Cat or Deere, but it shows that there re other things more important. There are plenty of manufacturers in Illinois that are not unionized. They are hear for the market, and infrastructure. I heard all of this during the Indiana fight, and the truth was this issue rated way down on the list compared to workforce, location and such.


  9. - Downstater - Thursday, Dec 12, 13 @ 10:34 am:

    Why should anyone be forced to join a union? Any monopoly, whether business or labor, is not good long-term policy.


  10. - sinclair's ghost - Thursday, Dec 12, 13 @ 10:38 am:

    what’s disgusting? union busting. The same argument for right to work laws are used as the argument for abolishing minimum wage standards. It’s all an attempt by the Masters of the Universe (ahem, Rauner) to create downward pressure on the middle class and below.


  11. - PoolGuy - Thursday, Dec 12, 13 @ 10:45 am:

    Texas and Florida are right to work states, and have no state income taxes. so if you get a job there that pays 15-25% less than the same job in Illinois, but you don’t have to pay the horrific 5% state income tax, you’re better off right?


  12. - walkinfool - Thursday, Dec 12, 13 @ 10:48 am:

    Fairly straightforward business decision, all other things being equal, to go for less union challenges.

    Stupid, however, to make it a disqualifying criterion up front, since many other factors are more important.

    Also ignorant of the value of the health of the community overall, in which you want to operate.

    The creeping economic ignorance, and amorality of those who run our biggest companies, is as appalling as any other deterioration in our society. Short term profits, and stock price, have replaced all the other values among business leaders that led to America’s greatness for a century, before the “Reaganomics revolution.”


  13. - Chris - Thursday, Dec 12, 13 @ 10:51 am:

    DP Dave sez:’That’s a nice weasel-worded statement “up to 50 percent” of manufacturers…. That would include 10 percent, 20 percent, 30 percent, and so on.’

    *Exactly* my thought. There probably is *one* ’study’/survey somewhere that got a high 40s result (who knows how the question was posed) and then a bunch of others that are much lower–maybe even single digits–but the big number is more interesting.


  14. - walkinfool - Thursday, Dec 12, 13 @ 10:56 am:

    ===Why should anyone be forced to join a union?===

    Why should anyone expect to get all the benefits hard-won by a union, without paying union dues?

    Why should anyone expect to get all the benefits of our modern society, without paying our society’s dues,(taxes)?

    All part of the “I deserve something for nothing” attitude, that so many on the political right fail to criticize in themselves.


  15. - Ahoy! - Thursday, Dec 12, 13 @ 10:56 am:

    The number of employers that screen that out is increasing, in a couple years it will be more than 50% instead of up to 50%. I’m still developing a personal opinion on it, but it is the reality in business attraction right now.


  16. - Downstater - Thursday, Dec 12, 13 @ 11:01 am:

    =Why should anyone expect to get all the benefits hard-won by a union, without paying union dues?=
    If unions are so good, why have their memberships seen a significant decline? If people were so miserable in their nonunion jobs, they would be seeking out unionization of their workforce. They aren’t.


  17. - Todd - Thursday, Dec 12, 13 @ 11:02 am:

    Downstater–

    When the owner of a company decides they want a union shop for ever reason, why should the state interfer with that? You don’t want to be a member, go work somewhere else and see if you can get the wages or benefits they have.

    We live in a republic that works off of a majority wins an election. I don’t get to opt out of hving Durbin as my senator. And if there is an election in the work place then the majority wins, be it for the union or against.

    Funny thing is that under federal labor law, the union has an obligation to represent all employees in the bargaining unit. In those states that have right to work, the union has to represent them for free. They can file grievences, that the union has to take up and file, they get all the benefits of the contract and if the union doesn’t do it they draw a failure on duty for fair representation or DFR suit. Without paying any dues


  18. - A guy... - Thursday, Dec 12, 13 @ 11:15 am:

    Unions exist and often even prosper in “Right to Work” states. The designation hardly changes the policy in many places…and given the choice, many companies and consumers choose the union labor. Usually because their training and professionalism stand out. The all or nothing philosophy doesn’t succeed anywhere I know of.


  19. - Grandson of Man - Thursday, Dec 12, 13 @ 11:15 am:

    “They aren’t”

    The reasons may be more complex than workers just not wanting to join unions. For example, union jobs were probably lost during the decline in manufacturing.

    We can ask why workers wouldn’t want to join unions to earn higher wages. I’ve stated this many times, but here is another good example where we can prove unions’ worth. Check out the weekly median earnings in last year’s BLS union statistics. Union workers earn more than non-union workers in almost every occupation:

    http://www.bls.gov/news.release/union2.t04.htm


  20. - Carl Nyberg - Thursday, Dec 12, 13 @ 12:03 pm:

    Is the decision to only consider “right to work (for less)” states based on research that shows these states manufacture better products?

    Or is it the capital class enforcing its ideological preferences?


  21. - Mouthy - Thursday, Dec 12, 13 @ 12:08 pm:

    Right to work = unfettered right to pay you less.


  22. - Educating the misinformed - Thursday, Dec 12, 13 @ 1:14 pm:

    ==”Why should anyone be forced to join a union?”

    No one is ‘forced to join a union’ in the states that DO NOT have economically repressive right to work (for less) laws. The real question that should be asked is why anyone should be allowed to take advantage of the improved conditions of work that unionization brings without having to pay for the costs. Remember the number one rule of economics is there is no such thing as a free lunch in that every benefit has its associated costs.

    It is also important to note that no one is ‘forced to join a union’ in Illinois and other like states. If a worker has issues with what they feel are unions dues going to non-work related matters they can choose instead to just pay an agency fee AKA fair share which covers ONLY the costs of collective bargaining and the right for representation if they face discipline or their employer has violated their contractual rights.

    Unionization rates are low in the U.S. because employers greatly have the upper hand with the weak labor laws. When employers can harass, intimidate, bully, illegally fire, and even deny a workers basic right to freedom of association if becomes a heavy lift for workers to organize. Level the playing field and you will find membership rates would be much higher like they were in the 50’s and 60’s.


  23. - ZC - Thursday, Dec 12, 13 @ 1:20 pm:

    As usual, it’s hard to control for -everything- that attracts business. Unions are a factor in there, but tons of other stuff is too. I agree most of the Republican anti-union rhetoric is more politically-motivated than economics-grounded.

    South Carolina is right-to-work, for instance. But is that really the reason it’s attracting manufacturing jobs from overseas? It could just as well include that SC is one state doing some nice innovation on the “factory apprenticeship,” high-school-to-factory-line approach that the Germans have been using for years but the U.S. has been slow to experiment with. Or that’s what I read in the New York Times: http://www.nytimes.com/2013/12/01/business/where-factory-apprenticeship-is-latest-model-from-germany.html?_r=0


  24. - Judgment Day - Thursday, Dec 12, 13 @ 1:29 pm:

    There’s something to this FOR THE MANUFACTURING ENVIRONMENT, but it’s more of an issue because it’s all about (a) flexibility, and (b) robotics/CNC component development.

    Lots of component builders want to get their work out of China. Too much product knowledge is being ‘inadvertently transferred’ (read: stolen). Plus development/implementation cycles are becoming shorter, and distance to market has become a real concern. Not to mention energy costs, where the US is currently far cheaper, and likely will be for an extended time frame.

    However (and it’s a big issue), product flexibility is everything to these folks. Some of these corporations (more every day) are able to generate complete cost/productivity curves every 2 weeks on every major product line, and even down to individual products within an overall product line. That’s what is required these days.

    These manufactures look for trends. And currently, they feel that China (and some neighbors) are becoming increasingly unstable (increased nationalism does not equal a better business environment), and that’s not a good thing for the business of manufacturing/building components.

    But coming back home and having to wrangle with unions all the time isn’t something they are interested in. They feel that having a unionized environment reduces their ability to adjust in the marketplace. And that’s a business killer for them. So they look elsewhere.

    Just saying.


  25. - catrike - Thursday, Dec 12, 13 @ 2:19 pm:

    Unions are not coming back. Period. We need to fashion other ways to address the economy killing effects of income inequality. One way (which unfortunately won’t happen either) would be to increase taxes on the super rich, and use that revenue to increase the Earned Income Tax Credit (EITC). The best thing about the EITC is that recipients are the working poor so it is not a welfare program per se. Of course, Republicans object to any attempt to redistribute income so the economy will continue to tank for lack of demand, and states will continue a futile “beggar their neighbors” race to the bottom.


  26. - persecuted - Thursday, Dec 12, 13 @ 3:14 pm:

    I’ve been trying very hard to buy USA manufactured products. I hate that the Chinese were allowed to be involved in pork and poultry production so will be searching for local producers!
    I shopped for a new toothbrush and some toothpaste recently and had to search to find either product manufactured in USA instead of China or India and I was angry at myself that I had taken for granted that these products were still manufactured in this country.


  27. - Pensioner - Thursday, Dec 12, 13 @ 3:45 pm:

    @Chicago Cynic. My thought exactly before I paged to the comments.


  28. - StreetervilleSnookie - Thursday, Dec 12, 13 @ 3:50 pm:

    Unions are anachronistic IMO. Meritocracies and RTW are the future.


  29. - Grandson of Man - Thursday, Dec 12, 13 @ 4:17 pm:

    “Meritocracies”

    When unions were at their strongest, so was the overall economy. That’s pretty meritorious.

    “Unions are anachronistic”

    Labor consciousness is timeless. There’s no better time than now for workers to organize and somehow–whether or not through unions–fight for better wages and benefits. Not everybody is just acquiescing to the economic status quo.


  30. - ZC - Thursday, Dec 12, 13 @ 5:11 pm:

    “Meritocracies and RTW are the future.”

    Umm, why?


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