Last Tuesday, state legislators in Michigan did more than break the indenture of workers. They took a big step toward pulling Michigan out of its economic spiral and toward a sustainable economy by passing a right-to-work law, guaranteeing freedom to choose whether to contribute to a union.
All the law does is remove coercion from the workplace. Nothing in this law is anti-union, against labor or injurious to collective bargaining.
That is an honorable accomplishment in the tradition of American freedom, but this law goes beyond philosophy to the core of economic decline in Michigan and much of our nation.
"Right-to-work" states have proven advantages over "closed-shop" states when attracting, expanding and retaining private businesses.
Michiganders are aware of the downward trend in quantity and quality of private-sector employment over four "postindustrial" decades.
Actual numbers from the most recent decade reveal a state economy looking over the precipice. Simple arithmetic exposes how destructive to the state the labor law status quo was.
According to the latest full-year data from the Bureau of Labor Statistics' Quarterly Census of Employment and Wages, Michigan has suffered a net loss of 322,000 "Goods Producing" jobs since 2002. The state lost the greatest number of jobs from the private subsectors of the economy that create the greatest wealth, paid the most taxes and provided workers with stabilizing job security.
Almost 250,000 of those jobs -- 77 percent of the total net job loss -- were in manufacturing. Those traditionally paid the most, offered the best benefits and for 70 years were a strong backbone to the state economy. Total manufacturing wages crashed $7.7 billion a year between 2002 and 2011, a 19.5 percent decline.
Private construction suffered most, with 37 percent job loss (75,000 jobs) and 24 percent loss of annual wages ($2 billion) since 2002. The huge losses cut against a modest 4 percent gain in total private-sector wages in the state over the last decade.
The only private-sector job growth came in service industries. While total employment dropped only about 5 percent, total wages increased 16 percent, less than the cumulative 24 percent inflation that occurred over that decade. Although service-sector work can include higher-paying positions, the majority of jobs are in lower-paying, less secure, lower-benefit employment.
The service sector alone cannot pull Michigan out of its economic drought. That requires more and better private-sector employment.
Right to work is a proven positive factor in business decisions to relocate and grow.
According to the BLS, from 2001 to 2010, employment in right-to-work states grew 8.2 percent, while non-right-to-work states experienced a 0.5 percent decrease. After Indiana passed similar legislation in January, 90 companies decided to locate there. Michigan, meanwhile, lost 7,300 jobs. Executives consistently report that many employers won't even consider non-right-to-work states when deciding where to locate operations.
The most telling statistic shows union membership decline in the state despite -- or perhaps because of -- its closed-shop laws. The latest BLS Union Membership survey found 671,000 wage and salary Michigan workers who were members of unions. Meanwhile, 32,000 nonmembers were forced to pay dues. That comes to about 18 percent of wage and salary employees, making Michigan a bastion of union power compared with the national average rate of 12 percent.
But that bastion has been crumbling. Union representation has fallen from 28 percent of the wage and salary labor force in 1989. Blame it on shifts in the world economy, the natural trajectory of manufacturing, or other factors, but the reality remains: Adapt or die. Michigan union leaders chose economic death, worried only about their power to squeeze more money from fewer workers.
Even holding unchecked power to take money out of workers pockets with no responsibility to produce benefits for them, unions in Michigan declined. Letting them drag the state economy down with them would have been fiscal suicide.
Gov. Rick Snyder and the legislators who liberated Michigan workers Tuesday also freed their state economy to grow.
Bob Williams, a former state legislator and former official at the Government Accountability Office, is president of State Budget Solutions, a nonpartisan organization advocating fundamental state budget reform.