Mark Gaffney: Chasing low wages won't revive State of Michigan

[Omaha Steve]

http://www.detnews.com/apps/pbcs.dll/article?AID=/20070316/OPINION03/703160302


Mark Gaffney: Labor Voices

Chasing low wages won't revive state

Cutting benefits and unionization will not fix what ails Michigan

L abor union members in Michigan find themselves injected into a debate about how to fix Michigan's economy and make our state more "competitive."

Some voices suggest that there are too many union members. These voices say unions are too strong, and our wages and benefits make our employers uncompetitive. These comments lead to suggestions to cut workers' benefits and pass legislation such as right-to-work laws, which reduce wages and weaken collective bargaining.

Let me ask a few questions. First, compete with whom? The Chinese manufacturing worker who makes between 39 cents and 80 cents an hour and has no benefits? The jobs lost to Chinese manufacturing are not due only to uncompetitive wages. We simply cannot expect our American workers to work for 39 cents an hour.

Don't blame wages, costs

Jobs lost to China are caused by greed and a lack of American industrial policy. Blaming wages and labor costs alone is too simple of an answer.

Who are the American consumers who fuel more than 60 percent of our economy? They are largely middle-class workers. Reducing workers' ability to spend in our economy and reducing workers' ability to be consumers cannot be an overall good thing.

Reducing or eliminating pensions and retiree health care coverage tends to make paupers out of the retired, formerly robust consumers.

There is a line that we must not cross in our economy. If the middle class is forced to reduce its discretionary spending below a level that helps grow our national economy, consumer spending then decreases to a point that actually slows the overall economic activity. A recession would result.

Why weaker unions?

Why are certain Michigan proponents calling for weaker unions? States without much union density, so-called right-to-work states, have median household incomes of $6,000 less than states like Michigan, according to the Economic Policy Institute. Less money for families, more profits for business.

Union-organized states have more of their citizens covered by health insurance (16.1 percent compared with 13.4 percent). Again, more out-of-pocket costs by individuals, more savings and profits for their employers. Those calling for weaker unions have a vested interest, that of putting more coins into their own vest.

Would workers feel safer in a state without strong unions? They shouldn't. In 2004, the rate of workplace fatalities was 41 percent higher in right-to-work states. In nonunion coal mines last year, a miner was almost 10 times more likely to die if he or she was not in a union. Last year, 42 out of 47 American coal miner deaths were in nonunion mines.

Does union membership and high union density make workers in a state like Michigan the only ones who suffer from cheap competition? Not necessarily.

NAFTA hurts South

The furniture, manufacturing and textile industry in North Carolina, a state with only a few union members, has lost well more than 200,000 jobs since the passage of the North American Free Trade Agreement. Do high rates of unionization make companies leave their home states? Not necessarily. Two major Michigan corporations have announced their relocation outside of Michigan. Neither of the companies, Pfizer nor Comerica, were unionized companies. Wages were not an issue. Unionization was not an issue.

Families need adequate income to have a high quality of life. Trying to reduce our way to prosperity by cutting wages and benefits and weakening unions just doesn't work. Michigan's most recent plant closing is Pine River Plastics of St. Clair, where more than 400 nonunion workers made $10.50 per hour, almost 50 percent below Michigan's average wage. No union, less-than-average wages and the plant still closed. Instead, Michigan needs to grow out of our problems. Worker training and education and, yes, high-wage and high-skill jobs are what our state needs.

The New York Times said in a March 2007 editorial that "Labor unions have a role to play in helping to fix today's economic ills -- most notably, (the) worsening income equality, a problem that's caused in part by unions' decline and the workers' resulting lack of bargaining power." The Times has it right. Those who want to fix Michigan only by seeking to attract businesses to a low-wage state have it wrong.

Mark Gaffney is president of the Michigan AFL-CIO, a federation of Michigan labor groups. E-mail: [e-mail].

[Vincardog]

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