Part of the Washington Examiner's weeklong commentary series on labor unions. To see the entire series, click here.
Indiana Gov. Mitch Daniels wasted no time. The day after the Republican was sworn in as governor on Jan. 10, 2005, he issued an executive order rescinding collective bargaining rights for state employees.
The very same day, newly elected Missouri Gov. Matt Blunt issued an executive order doing the same for his state.
These decisions were the beginning of a wave that brought major union reforms to the heart of the Rust Belt. By ending public sector collective bargaining, the governors prompted other states to do the same and raised the question of why other reforms such as right to work laws couldn't also be done.
Eventually, even Michigan -- longtime home of the American labor movement -- would become a right-to-work state, something previously unthinkable. It was as if Texas suddenly started adopting gun control laws.
“Union monopoly power — that is, compulsory unionism — is being called into question is a much more intensified way,” said Mark Mix, president of the National Right to Work Foundation.
What is right-to-work? It’s exactly that — the right to work in the private sector without Big Labor’s permission. Unions typically insist their contracts with management include provisions — called “security clauses” and “closed shop” rules — requiring that all employees be members or at least pay the union a fee to cover “representation services.”
Nothing in the law prevents unions from negotiating “members only” contracts where they only represent the workers who want to be in the union, but labor leaders would much rather have the power and money that comes from representing all employees. Without the clauses, Big Labor typically struggles to attract and keep members.
Until recently, in most states, the individual worker has no choice in whether his workplace is unionized. Most never even had a chance to vote. According to a 2012 analysis by the Center for Union Facts, just 7 percent of private sector members have ever voted for their workplace's union. Most simply “inherited” them when they were hired. (Data on public sector unions isn't available.)
Congress offered some remedy in 1947 with the Taft-Hartley Act, which allowed individual states to prohibit security clauses. By 1963, 19 mostly rural and Southern states had adopted these “right-to-work” laws. But only three more had adopted the laws by 2011.
Things changed that year, however, when Wisconsin Republican Gov. Scott Walker, inspired by Daniels' example, pushed through reforms sharply limiting collective bargaining for state and local government employees. Essentially, he made right-to-work laws apply to government workers. The same year, Ohio Republican Gov. John Kasich pushed through similar reforms.
In February 2012, Indiana became the first state in a decade to adopt an across-the-board right-to-work law. Later that year, Michigan went right-to-work as well. That put the total number of states with the law at 24. It’s 25 if you count Wisconsin.
“In Wisconsin, [there is] a very small percentage of private-sector unionized employers to begin with,” Walker told the Washington Examiner. “And so the vast majority of people who would be affected by right-to-work if it were statewide are already covered.”
According to the National Conference of State Legislatures, 21 states debated the laws during their 2013 legislative sessions, up from 19 the previous year.
It was a striking turnaround, fueled by recession and staggering public pension debt that could no longer be avoided. For governors, unions became an impediment to their efforts to control state budgets.
“You were paralyzed. You couldn't change anything. You couldn't change things structurally. You couldn't change personnel policy. You couldn't change technology. You couldn't close anything. You couldn't outsource anything. All of the things I wanted to do if you wanted to make government work well,” Daniels said. When he left office in 2012, the state had a $500 million budget surplus.
Walker faced similar problems when he took office. Wisconsin had a projected budget deficit of $3 billion, about 5 percent of the budget. It was either rein in the workers’ health and pension costs or sock it to the taxpayers. He chose to protect taxpayers.
“It had everything to do with my having been Milwaukee County executive for eight years and knowing the only way I could make the changes we had to make in our budget to avoid the horrific other choices … was to make changes in the way we provided aid to local governments. And the only way to avoid massive problems for schools and local governments was if we changed collective bargaining,” Walker said. In January, the state projected a $977 million surplus.
Daniels’ and Walker’s successes raised an obvious question: If giving public sector workers freedom to choose could help governments become more efficient, why wouldn’t it do the same thing for the private sector?
As Michigan's free-market Mackinac Center for Public Policy notes, in the three decades following 1980, total employment in right-to-work states grew 71 percent, compared with 32 percent in the rest. For union-heavy Michigan, the rate dragged along at 14 percent over the same period.
Adopting the law has “clearly had an impact” on the state economy, current Indiana Gov. Mike Pence told the Examiner, noting that 120 companies have indicated they would locate in the state as a consequence of the law and 82 of those projects have progressed through the pipeline stage.
But Big Labor and its allies have pushed back hard. Kasich's reforms were overturned in 2011 by a Big Labor-backed ballot initiative. Protesters clogged Wisconsin's state legislature for weeks on end in 2011, and Walker faced a hard-fought recall election. Union lawyers have mounted numerous legal challenges as well.
No wonder: States that have enacted the laws have seen major shifts in union membership. Labor Department filings since Wisconsin passed its public sector union reforms show that American Federation of State, County and Municipal Employees branches lost between one-third and half of their members. Walker got 28 percent of the union vote in the recall, a clear sign that a nontrivial majority appreciated having a choice.
“[I]f the union provides value to its members then there’s no reason why they should lose members. But if the reason that they have numbers is because the government forcibly requires people to be a member, then the union takes it for granted,” Walker said.