This week I was somewhat dismayed by the items I saw on the Michigan Legislature’s agenda. They obviously didn’t follow the instructions in my column last week on repairing the economy.
Rather, I saw the economic policies Republicans are pursuing in the legislature – where they hold a majority in both houses – that are completely misdirected, if not a show of political
gamesmanship.
“Republicans who control the Michigan Senate have introduced a version of so-called ‘right-to-teach’ legislation,” reported the Detroit News. “The bill presented Thursday says public schools would not be allowed to require employees to pay union dues or fees as a condition of
employment.”
Right-to-work laws make it illegal for employees and employers to negotiate a union contract that requires all employees who benefit from the contract to pay their fair share of the costs of negotiating it, and they’re designed to lend management the upper hand on labor.
A recent analysis by the Economic Policy Institute says “Michigan should not adopt a right-to-work law in an attempt to address its economic challenges.”
“Economist Gordon Lafer explains that right-to-work laws do not boost job growth in states that adopt them, and that they lower wages and reduce benefits for both union and non-union workers.”
In fact, the analysis continues to say “seven of the 10 highest-unemployment states are states with RTW laws, including Nevada and Florida, which have unemployment rates higher than Michigan’s unemployment rate of 10.5%.”
So maybe I was too lenient before when I said the Republican efforts were misdirected, because this is simply bad policy.
I think most of us understand the state’s economy isn’t doing well by simple observation, but to further illustrate the problem, I want to cite an economic snapshot by the EPI:
“Michigan and Ohio labor markets still struggling to recover… Three states, in fact, have lost jobs since the recession ended: Massachusetts, Michigan and Ohio…”
This was published July of 2007, and the writer, Michael Ettlinger, is referring to the recession in 2001. This is depressing. Michigan wasn’t even able to recover from the downturn in 2001 before it was sucker-punched by Wall Street in 2008.
In light of the state’s anemic growth I was supportive of Gov. Snyder’s efforts to make Michigan a more inhabitable environment for businesses, specifically his change to the tax code (which was effectively a tax cut for business).
But now I have to wag my finger at his Republican colleagues in the state legislature.
In my last column, I spread out for readers where the state obtains most of its revenue – property taxes – 37.5 percent (according to the EPI using data from 2008).
And why did I say “sucker-punched by Wall Street” earlier in this column? Because that was a financial crisis which marked the collapse of the housing market – and this means the Republicans right-to-work initiatives and attack on public workers are wrong.
If you’ve been following along, you can see why this is a problem. If not, I’ll lead you into it. A financial crisis and a collapse in the housing market means lower values for homes, and, in the end, the state collects less revenue from property taxes.
Now, what I’ve addressed is a budgetary problem rather than an economic problem, but they are connected nonetheless. Because homeowners are in a process of deleveraging, or recovery, from the collapse, they are spending less and therefore there is less activity in the marketplace.
The state would be much better off if the Republicans in control of it helped indebted homeowners, rather than try to settle old scores. That is what the docket for the state legislature shows – not actual policy proposals, but payback.
We all know unions in the state, especially the teacher’s union, overwhelmingly donate to Democratic coffers, and this is why the Republicans in the state are determined to break them.
