union booklet 2012

8/2/2019 Union Booklet 2012

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Unions: the Good,

the Bad and the Ugly

How forced

unionization has

harmed workers

and Michigan


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How Unions Have Helpedthe American WorkerUnionization took hold in America during the Industrial

Revolution in the mid-1800s. At the time, there were few

laws protecting workers. Uneducated laborers worked

long hours in sweatshop conditions for little pay.

Early unions fought for better pay, safer working

conditions, and shorter work hours. They have been

credited with securing the 40-hour workweek, minimum

wage, and government oversight of workplace safety.

Michigan and federal law now grant nearly all of the

protections the rst labor organizations demanded.

Before the early 20th Century, unions were voluntary

organizations. Workers had the freedom to associate,

or not associate, with anyone they chose. Businesses

could also choose to bargain with employees as

individuals or in groups.

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There may be here and there a

worker who for certain reasons

unexplainable to us does not join

a union of labor. This is his right,

no matter how morally wrong

he may be. It is his legal right

and no one can or dare question

his exercise of that legal right.

Samuel Gompers, rst and

longest-serving president of the

American Federation of Labor (AFL)

What isRight to Work?Right-to-work laws allow employees the freedom to choose

whether or not to join a union. Section 14(b) of the Federal

Labor-Management Relations Act of 1947 (Taft-Hartley Act) gives

states the option to grant this right to employees. Twenty-two

states, mostly in the south and west, have right-to-work laws.

Michigan is one of the 28 states where workers do not have the

right to say no to paying union dues.

Right to work does not ban unions but rather takes away their

monopoly, allowing them to serve their members better.

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Union Special Treatment

n The law gives unions special treatment that is forbidden to other

businesses and associations in America. This special treatment

restricts the freedom of both employers and workers.

n Unions are monopolies free from competition. Unions are given

the right of exclusive representation, denying workers a choice

once a union is formed.

n In 28 states, employees are forced to pay union dues simply to

keep their jobs. In these states, workers do not have the right to

say no to a union.

n If a company is unionized, employees must accept a union to

bargain on their behalf. It does not matter if the workers want to

negotiate with an employer themselves.

n Through employer help, unions can take money directly out of

workers paychecks.

Unions monopoly status gives them almost absolute power in

forced unionization states. Right-to-work policies allow unions tocompete for members. This competition forces unions to act in the

best interest of their workers.

Michigan Economics

n As of July 2011, Michigan had the 4th highest unemployment rate in

the nation: 10.9% of Michigan workers were unemployed compared to

the national average of 9.1%.

n In 1965, Michigan was 9th in per capita personal income. By 2008,

26 states surpassed Michigan, which had become a comparatively poor

state, ranking 37th for per person income.

n In 2009, Michigans population dropped below 10 million for the rst

time since 2001. Michigan was the only state to lose population in the

2010 census. Detroit alone lost 25% of its population over the last decade.

n Michigan has seen the greatest loss of gross domestic product of any

state in the nation.

n The cost of doing business in Michigan is 4% higher than the national

average because of taxes and labor costs.

Michigan needs a change. Right-to-work policies are the rst step toward

turning the economy around.

MICHIGANS GROSS DOMESTIC PRODUCT

2000-2007 Growth 2008-2009 Growth Rank

MICHIGAN -0.1%Ohio

IndianaGeorgia

TennesseeAlabama

IllinoisNorth Carolina

CaliforniaMassachusetts

Texas

49

38

46

39

39

29

44

43

31

25

23

0.7%

1.3%

2%

2.7%

2.7%

1.6%

2.8%

2.7%

1.7%

3.4%

..................................................................-5.2%

................................................................................ -2.7%

.........................................................-3.6%

................................................. -3.1%

............................... -3.1%

........................................... -2.1%

..................................................... -3.4%

............................. -3.2%

........................................... -2.2%

........................................................................ -1.6%

.................................... -1.5%

Source: Bureau of Labor Statistics; Bureau of Economic Analysis; Moodys Economy.com

Power tends to corrupt, andabsolute power corrupts absolutely.

- Lord Acton

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Big Labors Anti-Economic Agenda

Unions aggressively push laws that give themhandouts, but harm the greater economy.

n Policies such as Davis-Bacon mandate federal contractors pay

a wage determined by the Secretary of Labor. This is called

prevailing wage, but in reality it is the typical union wage in an

area. Davis-Bacon gives unions an unfair advantage because many

non-union contractors are priced out of competition. Davis-Bacon

can raise costs for federal projects by as much as 20%. Citizens incur

these costs as either high taxes or decreased services. In the end,

they are handouts to unions at the expense of the public.

n A recent report by the Government Accountability Oce shows

that Davis-Bacon prevailing wage requirements caused delays for

Recovery Act (stimulus) projects at the departments of Commerce,

Energy, and Housing and Urban Development, and at the

Environmental Protection Agency.

n Project Labor Agreements (PLAs) rig the contracting process for

public construction projects to ensure that only unionized rms

qualify. They can raise the cost of construction by up to 18%. PLAs

impose burdensome requirements on non-union contractors. For

example, under a PLA, a non-union contractor could be required

to employ workers from union hiring halls, acquire apprentices

from union-only apprentice programs, and require employees to

pay union dues. One of President Barack Obamas rst acts in oce

was to require PLAs on all federal construction projects. Thankfully,

Michigan took the opposite approach in 2011 when the legislature

passed Senate Bill 165, which banned PLAs.

n Public sector employee unions are one of the key lobbies for larger

and more expensive government. Many politicians receive a great

deal of support from public unions. The unions provide donations

to help their political allies get elected. The politicians then

presumably return the favor by increasing pay and benets for the

unions. In the end, taxpayers are left with the bill. This system of

patronage has resulted in severe decits for many states, due to

overpromising benets to public sector employee unions.

n Public Act (PA) 312 of 1969 forces Michigan into compulsory

binding arbitration with police and reghter unions. PA 312

allows an unelected arbitrator to decide contracts that obligate

taxpayer dollars. Our elected representatives are eectively

removed from the negotiating process, which in turn leads toskyrocketing costs. Arbitrators often give favorable rulings to the

unions that can result in communities having to either raise taxes

or lay o employees.

n PA 345 of 1937 allows for millages to pay for the retirement

benets of police and reghters. After initial voter approval,

millage rates increase automatically cover the cost of retirement

benets. Following years of promising greater and more lavish

benetscities, villages, and municipalities can now ooad

liability from their personnel budgets directly to taxpayers. Some

local governments are incentivizing early retirement, which will

result in this burden being placed on taxpayers even sooner.

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UnderfundedPrivate Pensions

One way unions lure in new members is by promising large,

dened-benet pension plans. What they do not tell these prospective

members is that many of these plans are signicantly underfunded.

Dened-benet pensions promise a regular payment to retired

workers. Unions control these pensions, and in many cases have

mismanaged pension funds for years.

According to the Department of Labor, in 2007 only 64% of union

pension plans were healthy, being funded above 80% (in other words,

having 80 cents for each dollar owed). In comparison, 89% of non-

union plans were considered healthy. The number of union pensions

in critical status, or funded below 65%, was 12% compared to just

2% of non-union plans. Moodys Investor Services estimated private

union pensions were underfunded by $165 billion in 2009.

Pension plans for union bosses are much better funded than those

for rank-and-le workers. In 2007, the 46 largest rank-and-le unionpension plans were funded at 80%. In contrast, the average for union

ocer and sta pension plans was 96%.

The Teamsters Central States pension plan is an example of unions

mismanaging the retirement security of their members. In 2007, this

plan had only 47 cents for every dollar owed to its members.

Forced UnionismsInfringements on Freedom

No one should be forced to join or pay a private third-party organization

to obtain or keep a job.

Freedom of Association remains a central tenet of the First Amendment

of the Constitution. Americans have the right to associate with or not

associate with anyone they choose. Unions point to Freedom of Association

as the basis of their right to collectively bargain for their members.

The United Nations in their Universal

Declaration of Human Rights states:

Article 20

1. Everyone has the right to freedom of peaceful assembly

and association.

2. No one may be compelled to belong to an association.

Article 231. Everyone has the right to work, to free choice of

employment, to just and [favorable] conditions of work

and to protection against unemployment.

4. Everyone has the right to form and to join trade

unions for the protection of his interests.

Organized labors support for these rights fall short since they actively

appose the rights of workers to choose not to associate with their unions.

Unfortunately, for Michigan and the other 27 states without

right-to-work laws, employees can lose their jobs if they refuse to

associate with a union and not pay dues.

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Unions and Politics

The American Federation of State, County and Municipal

Employees spent $90 million, making them the largest

outside spender of the 2010 election.

Unions have considerable inuence over those in power.

Andy Stern, former head of the SEIU during the Obama

Administrations rst term, was the most frequent visitor

to the White House. Richard Trumka, president of the

AFL-CIO, came in as a close second.

Unions continue to lobby for the Employee Free Choice

Act (EFCA), which is their top legislative priority. The Card

Check provision in EFCA would eectively eliminate the

secret ballot in union organizing elections. This in turn,

could lead to increased intimidation by union organizers.

The bill would also allow a federal bureaucrat to author

initial contracts in newly unionized companies.

Organized labor received much of the $862 billion in

stimulus funds. Davis-Bacon and PLA provisions steered

federal contracts to union rms.

Teachers unions received over $67 billion in federal supplements to

state education costs. The Washington Post noted that the latest $10

billion was more of an election-year favor for teachers unions thanan optimal use of public resources.

Because of their coziness with politicians, unions receive favors and

billions from government coers.

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Unions Eect on the EconomyBesides denying workers freedom, forced unionization harms economic

growth. Businesses are put at a competitive disadvantage when burdened by

strict union work rules, unsustainable pay and benets, and a lack of agility

due to collective bargaining agreements.

Both workers and businesses are often shackled to collective bargaining

agreements against their will. This is why organizations such as the National

Federation of Independent Businessthe voice of small businessadvocates

for worker freedom, saying, [W]e continue to take a strong stance that no

employee should have to pay dues or fees to a union against his or her will.

A majority of Americans now believe unions mostly hurt the economy.

This means that when businesses consider moving or starting, they will avoid

places that have strong union reputations.

The Wall Street Journal has documented how right to work aects business,

noting that right to work and tax policy [stand] out as perhaps the most

important in attracting jobs and capital States that permit workers to be

compelled to join unions have much lower rates of employment growth than

states that dont. Many companies say they will not even consider locating a

factory in a state that does not have a right-to-work law.

What Michigan and the Rest ofAmerica Think About Unionsn Michigan voters overwhelmingly support giving workers the choice

to reject membership in a union and not pay union dues or fees.

According to polling data, 77% of Michigan voters would vote in

favor of making union membership optional.

n Organized labors reputation has dropped sharply in recent years.

In 2010, 42% of Americans had an unfavorable opinion of labor

unions, while 41% had a favorable opinion. This represents a

dramatic changed from just three years prior. In 2007, unions

had a 58% favorable rating versus 31% unfavorable.

n While 45% believe unions make our country weaker, only

26% think unions make the nation stronger.

n Nearly half of Americans believe unions have outlasted their

usefulness. Only 29% disagree.

n Of non-union workers, 81% do not want to join a union.

Only 9% would join if they were given the choice.

n In 2010, Michigan lost 11.7% of its union workers, a decrease

from 710,000 to 627,000.

17.0% or more

13.0% - 16.9%

9.0% - 12.9%

5.0% - 8.9%

4.9% or less

Union membership rates by state, 2010 annual average

(U.S. rate = 11.9 percent)

% mostly help

Overall, do you think laborunions mostly help ormostly hurt the companieswhere workers are unionized?

Overall do you thinklabor unions mostly helpor mostly hurt theU.S economy in general?

% mostly hurt

02

38

45

48

55

37 38 38

54 54

3936

5351

39

49

35

40

5350

39

45

46

58

52

98 99 00 01 02 03 04 05 06 07 08 0903 04 05 06 07 08 09

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Public vs. Private Unions

There are more public sector union members than private sector union

members. This is despite there being ve times as many private sector

workers in America.

While private sector unionization has been decreasing for years,

organized labor is making major inroads in federal, state, and local

government.

Public unions are one of the key forces lobbying for bigger and more

expensive government. Public employees are 40% more likely to vote

than private sector employees. Politicians cater to public unions giving

them ever-increasing compensation with hopes to secure their votes.

Public unions are one of the main reasons many states are in a scal

crisis. Their compensation packages are currently underfunded by as

much as $3 trillion. Yet, many unions refuse to compromise, instead

relying on taxpayers to fund benets that far exceed the private sector.

Michigans largest public school employee union, the Michigan

Education Association, even sued the legislature to have cuts in their

retirement package ruled unconstitutional. The union did not want

their employees to pay 3% of their salary for retiree medical benets.

The benets paid 100% of the medical and 90% of the dental, hearing,

and vision insurance for public retirees. These benets far outpaced

what most workers in the private sector have.

Public unions refuse to accept any eorts to bring their benets in line

with scal reality, even as state revenues are falling and private sector

employees are seeing reductions in their salaries or losing their jobs.

Michigan has embraced policies to help reverse this trend. The state

has enrolled most new employees in a dened contribution plan since

1997. The new employees have their own retirement savings account,

meaning the state does not bear the risk of underfunding. Michigan

must continue to pursue these types of policies and can go even further.

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Unions in MichiganMichigan has always had a reputation of being a strong union state. Unfortu-

nately, that reputation drives away business, stymieing economic recovery.

In just one year, Michigan has fallen from being the 5th most heavily

unionized state, with almost 20% of its working population represented by

unions, to the 10th most heavily unionized, with around 17% of workers

represented. This illustrates how Michigans reputation has harmed not just

the economy, but unions themselves.

The overreaching and stringent work rules mandated by unions have helped

to create one of the worst state economies in the country.

The auto industry has cut almost half its workforce in Michigan. The state

lost over 210,000 automotive jobs in the last decade from 365,500 in 2000

to 158,800 in 2009.

Young union members are among those paying for the unreasonable demands

the UAW imposed on the Big Three. New workers at UAW plants earn only

$14 an hour, half of what their veteran coworkers make under their old

contracts. Today, new UAW members are paid 20% less than the average

American manufacturing worker.

The UAW itself has lost over a million members since 1979. In that year,

the UAW had 1,500,00 members. In March 2010, membership dropped to

only 355,199 workers, the lowest number since World War II. Thanks to the

Federal Government bailout of Chrysler and General Motors, as well as

forcing self-employment daycare providers to join the UAW, their numbers

grew to 376,612 by the end of 2010. However, both of these Band-Aid

solutions to address declining UAW membership have been short lived. There

is little public appetite for more bailouts or strong-arm tactics to create

new members. In 2011, daycare owners were no longer required to be UAW

members. This will diminish the UAWs members for 2012.

New UAW leadership has signaled they want to take back recent concessions,

going back to the ruinous contracts of the last half-century. UAW President Bob

King said, Im very upset with the situation [at Ford] where there were merit

increases and [retirement savings plan contributions]. Thats wrong.

Unfortunately, the Big Three gave in to too many UAW demands and paid a

hefty price.

For years, thousands of UAW members were paid to sit in job banks or

warehouses where they were paid to do nothing.

Not all is doom and gloom for the UAW. Still, they have over a billion of dollars

in assets, making them one of the richest unions in the nation. Their strike

fund alone was over $871 million at the end of 2007. Unfortunately for their

members, the UAW sat on this money while workers were losing their jobs.

Percentage of workers unionized in U.S. and Michigan, 1989-2009

Decline in UAW Membership

1,500,000

1,300,000

1,100,000

900,000

700,000

500,000

300,000

79 81 83 85 87 89 91 93 95 97 99 01 03 05 07 09

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What Union Bosses & PoliticiansDont Want You to Know

Workers are not required to support their unions political candidates

or causes. The Supreme Court in Communication Workers of

America v. Beck said workers do not have to pay the portion of their

dues that are not directly related to collective bargaining activities.

Workers are also entitled to see how much the union is spending on

representation versus politics.

These are called Beck Rights* and apply to almost all workers

represented by unions in the public and private sector.

State and local public employees in Michigan have even greater

rights. Michigan is one of only a handful of states that has paycheck

protection laws for public workers. Michigans Campaign Finance Act

MCL169.255(6) requires unions to get permission from their members

before the union uses their dues for politics. If consent is not given, the

union must reduce or refund the percentage of dues spent on lobbyingor political donations.

Paycheck protection only applies to state and local government

employees in Michigan. Private union employees must still opt out to

keep their dues from being spent on politics.

The Catch A union can force employees to resign toexercise their Beck Rights. The employees are still required to pay

the actual cost of representation and collective bargaining.

Employees also lose all rights to participate in the union and have no

say in bargaining contracts that aect them. Further, employees risk

poor treatment by their co-workers, who may feel the employee is

not contributing their fair share.

Some politicians do not like union workers knowing about theirBeck Rights. President Obama recently canceled a requirement that

Beck Rights be posted at worksites for federal contractors.

Diculty in opting out, the loss of say in union governance, and in

many cases lack of knowledge, has led to very few union members

taking advantage of these options.

Of the 659,000 Michigan workers represented by unions, only 5%

have chosen to resign their membership and are eligible to exercise

their Beck Rights.* For more information on how to exercise your Beck Rights, go to www.unionrefund.org.Public sector workers who feel their union is not honoring their Beck Rights can call theMichigan Employment Relations Commission (MERC) at (313) 256-3510. Private sectorworkers can call the National Labor Relations Board at (313) 226-3200.

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Favors to Big LaborDuring the past decade, on average government workers earned 46% more in

salary and benets than workers in the private sector.

However, these are not the only added costs unions impose on taxpayers.

As previously noted, prevailing wage laws, which still exist in Michigan, can

increase construction costs by up to 20%. Project labor agreements can increase

the price tag for federal construction by up to 18%. But organized labor has

more tools in its toolbox for extracting special favors from taxpayers.

Buried in spending bills and other laws, organized labor and its legislative

enablers can hide provisions that require the government to buy union

products or grant them monopolies.

Recently in Wisconsin, Governor Scott Walker ended the Wisconsin Education

Associations monopoly on many of the states health insurance plans for

school district employees. The result was an immediate savings for taxpayers.

Nearly overnight, several school districts reported saving hundreds of

thousands of dollars by switching providers.

Unfortunately, even as Wisconsin moves in the interest of taxpayers, Michigan

lawmakers have proposed laws that will give more favors to Big Labor.

The proposed New International Trade Crossing (NITC), formerly known as

the Detroit River International Crossing, is a prime example of such favoritism.

The NITC, a proposed public-private bridge, would cost taxpayers billions to

build, even though the owners of the private Ambassador Bridge wish to build

another span that would expand capacity without using taxpayer dollars.

Hidden inside the NITC bill are provisions calling for the state to hire unions

as consultants and pay the 20% added cost of prevailing wages.

In the end, the bridge may be a windfall for Big Labor. But, Michigan

taxpayers must ask themselves if they can aord such giveaways during

these tough economic times.

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Union Desperationand shrill attacks

Organized labors power has signicantly decreased across the country.

They have been hemorrhaging members for years as workers move to new

non-union industries and more economically prosperous right-to-work

states. Politically, unions are losing across the country. Voters have realizedthat taxpayers can no longer aord the lavish salary and benets

of unionized government employees. Governors and lawmakers are

enacting legislation to bring scal sanity back to the budgetary process.

This has made unions more desperate to keep their power. The tone from

union bosses and their political allies has become more confrontational.

They are targeting, what they perceive, as their no. 1 enemythe Tea Party.

n On Labor Day 2011, Teamsters President James P. Hoa declared war

on the Tea Party. In his opening remarks for President Obama, Hoa

said the Tea party has got a war, they got a war with us and ... were

going to win that war. He added, President Obama, this is your army.

We are ready to march. Lets take these [expletive deleted] out and giveAmerica back to an America where we belong.

n On August 22, 2011, Rep. Maxine Waters (D-Calif.) told supporters

in California (many dressed in purple SEIU t-shirts), [As] far as

Im concerned, the Tea Party can go straight to Hell.

n Also in August, Rep. Andre Carson (D-Ind.) told the

Congressional Black Caucus, Some of them in Congress right

now of this Tea Party movement would love to see you and

me . . . hanging on a tree.

n Vice President Joe Biden went so far as to compare the Tea Party to

terrorists and at a Labor Day speech, told a union audience they

were the only folks keeping the barbarians from the gates.

Union Violence

But its not just rhetoric.

n In Monroe, Mich., a business owner was shot simply because

he owned a non-union electrical shop.

n In New York, vital emergency phone lines were sabotaged

during a strike by unionized Verizon workers.

n Union longshoremen closed a port in Longview, Washington,

took security guards hostage, damaged rail cars, and dumped

a shipment of grainall because the owner of the terminal

was using a contractor whose workers belonged to a rival

union. Longview Police Chief Jim Duscha said, A lot of the

protesters were telling us this is only the start.

It was just the start. A few weeks later, the union protesters

clashed with police after sitting on railroad tracks trying to

block a train shipment into the port. Dan Coman, the local

unions president, even admitted on camera that his members

became violent.

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Employment has grownmore in right-to-work states factBetween 1999 and 2009, non-farm private sector employment grew 3.7%in right-to-work states, but decreased 2.8% in forced unionized states.

___________________________________________________

Fewer people are getting healthinsurance because of right to work ctionFrom 1999 to 2009, the number of people covered by private employer

health insurance increased 0.9% in right-to-work states, but decreased

6.9% in forced unionization states.

___________________________________________________

Manufacturing has grownmore in right-to-work states factFrom 2000 to 2008, manufacturing has increased 20.9% in right-to-workstates, but only 6.5% in forced unionization states.

Right to Work:Fact or Fiction?Right to work bans unions ctionRight to work allows employees the option to join a union. If an

employee chooses not to join, they do not have to pay any union dues.In many cases, right to work makes the unions serve employees better

because unions have to compete and be responsive to their members.

___________________________________________________

Right to work helps the economy factCNBC recently released their Americas Top State for Business 2011

list. Seven of the top 10 states are right to work. Michigan ranked 34th.

___________________________________________________

Workers are worse oin right-to-work states ctionWorkers in right-to-work states have lower costs of living and

more disposable income ($35,543) than those in forced unionizationstates ($33,389).

___________________________________________________

More people aremoving to right-to-work states factSince 1970, the population in right-to-work states has doubled. In

forced unionization states, it has only increased 25.7%. From 2000

to 2008, 4.7 million people moved out of forced unionization states

to right-to-work states.

___________________________________________________

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Union interests are not always those of the worker.Union bosses have feathered their own nests,while allowing their unions and workers to suer.

Did You Know?n Unions ght against merit pay. In unionized rms, the only

way to get a raise is by seniority, not by working hard.

n Unions ght not only for a oor in wages, but also a ceiling.

An employer cannot give an exceptional worker a raise withoutthe unions permission, no matter how hard they work.

n Some unions would rather lay o workers than take small

benet cuts for the rest of their members.

n Employers are not always the enemy of unions. Unions ght

with themselves for dues paying members.

www.MichiganAFP.com

By F. Vincent Vernuccio, Labor Policy Counsel, Competitive Enterprise Institute

Published by Americans for Prosperity FoundationMichigan

Sources for data include:

Competitive Enterprise Institute .................................................. www.cei.org

National Right to Work Legal Defense Foundation .................. www.nrtw.orgBureau of Labor Statistics ............................................................... www.bls.gov

Cato Institute .................................................................................... www.cato.org

Mackinac Center For Public Policy .............................................. www.mackinac.org

Heritage Foundation ....................................................................... www.heritage.org

National Federation of Independent Business ........................... www.nb.com

Hudson Institute .............................................................................. www.hudson.org

WorkplaceChoice ............................................................................. www.workplacechoice.org

Phone: 517-853-9073 | Address: 222 W. Genesee, Lansing, MI 48933

Email: [email protected] | Facebook: http://www.facebook.com/AFPMI

union booklet 2012

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