“Right to Work”: Menace to Labor

— Milton Fisk, March/April 2012, ATC 157

A YEAR-LONG BATTLE ended in January with Indiana becoming the 23rd “Right to Work (RTW)” state — and ominously for labor, now the wedge state for opening the rest of the industrial Midwest to RTW campaigns. In neighboring Michigan, the home state of the United Auto Workers, rightwing state legislators are pushing to follow the Indiana example in the name of “competitiveness,” even though Republican Governor Rick Snyder says it’s not high on his agenda.

“Right to Work” is one of those truly Orwellian terms: It has nothing to do with the right to a job, let alone full employment. It prohibits collective bargaining agreements with mandatory payment of union dues or representation fees, and its purpose is to strangle unions’ organizing power and finances.

For the 60-year-old National Right to Work Committee (NRWC), this is its first victory since that in Oklahoma a decade ago. Indiana unions mobilized their ranks against the measure, but this defeat leaves them concerned about their future under emboldened owners and managers.

The roots of the defeat grew over the last half-century. In 1964, Indiana employees had the third highest union density in the country, with 41% unionized. But by 2010, the rate of unionization had dropped to 11% — now 26th from the top.

How could this happen? In the Gary steel mills, productivity increases and intense foreign competition cut the workforce. In central Indiana auto production, major plants closed, with the loss of employees only partially offset by hiring in non-union transplants. Indianapolis alone had 50,000 autoworkers in plants under UAW contract, now in the entire state there are only 5,000 unionized workers.

In the southwestern coal mining area of the state, not a single union miner is left. Old mines closed, and the nation’s largest mine, operated by Peabody in Indiana, opened without a union presence. Finally, in major appliance facilities, like Whirlpool just outside Evansville, have shut down with the work going to Mexico or elsewhere.

After Congress passed the Taft-Hartley Act in 1947, a union could no longer insist that employers hire only union members. But Taft-Hartley did not forbid a union voted in by the workers from requiring new hires to join the union within 30 days (the “union shop”) or charging non-union employees representation fees (the “agency shop”).

Such fees cover union expenses for handling grievances, bargaining wages, training workers, and policing safety regulations. The fees seemed consistent with the legal requirement that a union represent both union and non-union employees.

However, Taft-Hartley included a clause allowing individual states to outlaw union or agency shops.

The NRWC formed to dedicate itself to exploiting this opening. Public sentiment for unions shifted due to corruption and racketeering in some unions, as well as divisive use of McCarthyism by some union leaders, and campaigns for anti-union legislation.

Indiana fell in line by passing a RTW law in 1957. But then a new impetus favoring unions came from public sector employees, who had been left out of the National Labor Relations Act. John F. Kennedy’s executive order permitting limited bargaining rights for unions of federal employees sparked an upsurge in the 1960s in state and municipal unionizing. In this context the Indiana legislature was ready to repeal the state’s RTW law in 1965.

The Battle of Indiana

For Mark Mix, the present NRWC president, passing RTW in Indiana in 2012 is sweet revenge for its 1965 repeal. The NRWC worked tirelessly for years in Indiana to make it the 23rd RTW state, with financial backing from the National Chamber of Commerce. The Chamber’s Indiana affiliate, along with numerous anonymous donors, were active in the campaign to pass RTW in 2011-12. Among other things, it published a position paper arguing that RTW states experienced higher growth of total and per capita personal income.

Current governor Mitch Daniels was a key figure in the struggle to get RTW. In TV ads and interviews, he deliberately obscured the issue by referring to “representation fees” as “union dues,” thus ignoring the crucial difference between union membership dues and payment for union services.

Daniels’ basic argument was that without RTW, companies would avoid Indiana as a place to settle. A TV interviewer asked him for examples. Daniels claimed he had contacted Volkswagen about coming to Indiana without ever receiving a response. Why else would they have not gotten back to him except that they did not want to help employees pay union representation fees?

Volkswagen might have had any number of reasons, but one clue is that currently its only U.S. plant is a recently opened one in Tennessee. Union density there is 5.8%, half of the 12.2% in Indiana. The average weekly wage in the two states is close to the same. So even though Tennessee is a RTW state, my guess is that Volkswagen was more interested in Tennessee’s lower union density than its lack of the threat of union representation fees. The lower the union density, the less is the threat of having to fight off a union organizing drive.

Daniels understood this perfectly. His state needed to be even less union friendly attract firms hoping to escape the threat of unionization. He wanted RTW not for itself but as a device for union busting.

Labor’s struggle to stop RTW in Indiana began with union rallies and talks around the State in January 2011. It peaked that February with a demonstration, estimated at 20,000, outside the Statehouse in Indianapolis. As in Wisconsin, labor friendly legislators left the state for several weeks to deny Republicans a quorum — but they were present when Republican majorities won limits on collective bargaining in the schools, as well as the creation of the most extensive school voucher plan in any state.

Having won on school “reform” in 2011, the governor was confident he could have his way on RTW in the 2012 legislative session. The Democrats in the House showed up for a vote on RTW only after almost three weeks of periodically leaving the House to deny the Republicans a quorum.

With polls showing that fewer people in the state favored the RTW bill than opposed it, the Democrats in the House wanted to amend the RTW bill to have it require a public referendum on RTW. The amendment failed.

Each legislator was under the threat of a $1,000 fine for each day he or she walked out to prevent a quorum. With threatened fines pilling up, Democrats in the House finally stayed in for the vote they knew they would lose. The vote was 54-44, with five Republicans voting with the 39 Democrats.

Patrick Bauer, the Democratic House Leader, remarked, “The only places where today’s events will be cheered are the boardrooms of big businesses and corporations across this state.” The bill then went to the Senate, where the RTW bill passed despite significant crossovers by Republicans against the bill.

Workers Mobilize

Union members from around the state and from virtually every union were in the corridors of the Statehouse at sometime after the session began and before the RTW bill passed. The furor over the governor’s attempt to limit the number who could be in the Statehouse made him relent. The elegant 1835 structure proved it could hold thousands without a tremor.

What were they saying? A steelworker, bused in from Gary by his union, said RTW is all about getting rid of union money that backs Democratic politicians. A sheetmetal worker from just outside Indianapolis said all the statistics about creating jobs and growth are part of a smokescreen hiding the intent to kill unions. A Teamster from Indianapolis pointed out that earlier Mitch Daniels had told his union at a stewards meeting that he would be against RTW.

An SEIU member from Chicago was in the Indiana Statehouse because he worried that Illinois could be next if RTW passes in Indiana. At one end of the Statehouse, Jim Robinson, the head of District 7 of the USWA, was speaking to 150 steelworkers about where things stood on an amendment for a referendum.

Pro-labor activity was not limited to the Statehouse. There were meetings in many localities. For instance, South Central Indiana Jobs with Justice organized forums in Spencer and Loogootee. Organizing support for striking millworkers was a vehicle for discussing RTW at a strike support meeting in Bedford. The White River Central Labor Council organized a meeting of 75 unionists and sympathizers to hear union, business and university speakers.

The RTW issue generated not only a position paper from the Indiana Chamber but also one from each of three major schools, Notre Dame, Ball State and Indiana University. Data found by their labor economists support the idea that representation fees are not a significant factor in preventing businesses from coming to a state. In fact, the priorities of companies that would complain about representation fees would lead them to set up shop not in RTW states in the United States, but in low-wage countries.

The Notre Dame group showed that, if one considers median instead of average household income, 18 of the 22 RTW states were below average. So RTW states don’t raise low incomes — while they do, in fact, boost high ones.

Killing Unions

Although winning the battle at the level of economics is important, an exclusive focus on economics lets the advocates of RTW off the hook. This is more than a battle of ideas; it is a battle for the existence of unions. Mitch Daniels and the Chamber see RTW as a union slayer, and they are correct.

Just how big a hit will Indiana unions suffer from RTW? In 2010, 34,000 of the 313,000 workers whom unions represented in Indiana were not union members. Indiana unions would then lose, under the RTW law, roughly 11% of their income from workers they represent. This loss will call for finding ways to save, but it will not destroy unions.

Another effect is more serious: It is a steady drop in membership that diminishes unions’ ability to defend employees. Some workers will maintain membership, but many will leave unions. Why stay in a union and pay dues, when those who drop out of unions will get the same benefits as union members without paying anything?

Why try to form a union where there is none? Once formed, members will drop out to get free union representation. Is this short sighted thinking? Of course it is, since the freeloaders cannot depend on getting those benefits for long. With more and more freeloaders, unions will run out of funds for services — and employees in new places of work will not want to form unions so freeloaders can benefit from their efforts.

The only freedom gained is that of capital from unions.

One can hope that, as in 1965 when unions were still strong, a new legislature would repeal RTW. Unionists in the Statehouse protests shouted that they would settle accounts with the pro-RTW legislators in the November elections. Nancy Guyott, the president of the Indiana State AFL-CIO, could be seen huddling in the corridors with John Gregg, the Democratic aspirant to replace Daniels as governor.

One problem with the electoral strategy, however, is that voters in Indiana who may think RTW is over the top are not yet ready to treat it as one of their main concerns. A more likely priority will be trimming taxes — even if that means cutting state budgets for Medicaid and schools.

There is also a problem pertaining to organized labor itself. The loss of union membership goes along with a policy of concessions by unions to owners and managers. Concessions by unions have worked only to weaken them. Despite the restrictions on picketing and secondary boycotts in the Taft-Hartley Act, unions can be in solidarity with one another in ways they rarely use.

Using these methods can reduce the need for concessions and strengthen unions. They used one of these ways by rallying together at the Statehouse to confront legislators favoring RTW. But regrettably, when one union is fighting a battle, it too frequently fights alone. A union needs other unions to make common cause with it in the media, in strike support meetings and rallies, and in laying out their case before elected officials.

In 2010, UAW Local 23 at an Indianapolis stamping plant stood fast against cutting its members’ wages in half. Taking this cut was a condition an entrepreneur demanded for buying the plant that GM had up for sale. Local 23 argued that, if it took the cut, that would lead other UAW locals working in plants threatened with closure to take cuts thereby wiping out decades of union gains.

Governor Daniels said the union’s refusal would hurt the city, and UAW’s president Bob King urged Local 23 to follow his policy of concessions. Indiana unions failed to show solidarity. Doing so would make it difficult for them when it was their turn for making concessions. The stamping plant closed, with many of its employees taking jobs in auto plants elsewhere.

A serious effort to repeal RTW and other anti-union legislation calls for solidarity among unions. With it, unions will be in a better position to regain the determination and numbers they need.

POSTSCRIPT: Caterpillar Corporation lost no time in rewarding Governor Daniels. On January 1, a Caterpillar railroad locomotive plant in London, Ontario had locked out its 450 unionized workers, demanding that they accept 50% cuts in wages and benefits. Immediately upon passage of Indiana’s RTW law, Caterpillar closed the plant and announced the work was moving to its nonunion facility in Muncie, Indiana. §