Michigan looks to Right To Work for jobs

There was a time when folks in Northern states like Michigan thought of Alabama as impoverished and backward: "I heard Mr. Young sing about her, I heard ol' Neil put her down," as Lynyrd Skynyrd sang.

Neil Young had excellent reasons to be critical of Alabama back in the early 1970s, about the time that civil rights laws were starting to have an effect in the South. But if experts and political leaders in Michigan take pot shots at Alabama today, the words are bound to ring hollow, because Alabama's economy is poised to overtake Michigan's in the important task of providing opportunities for workers to find good jobs.

Those of us who live and work in Michigan might want to set aside our Northern pride and learn from Alabama's example.

In the Mackinac Center's recent report, "The Economic Effect of Right-to-Work Laws: 2007," we described the numerous advantages that right-to-work states like Alabama have over non-right-to-work states, Michigan in particular.

A state right-to-work law prevents workers from being forced to pay union dues or fees as a condition of employment, while leaving the rest of the labor law -- including collective bargaining -- intact. Our research showed that the economies of right-to-work states grew faster and created jobs at more than twice the rate of states that allowed forced unionism.

Naturally, with so many jobs being created, right-to-work states had lower unemployment.

The one advantage that non-right-to-work states have held is in incomes.

The average per-capita personal income for right-to-work states is $2,400 lower than for states that allow forced dues. That has led union officials and other forced-union-dues advocates to deride right-to-work as "right-to-work-for-less."

But they neglect to mention that right-to-work states have been gaining over the last five years, especially when compared to Michigan. The right-to-work states of Florida, Kansas, Nebraska, Nevada, Texas, Virginia and Wyoming have higher disposable incomes than Michigan today.

If the trend of the last five years holds, a majority of right-to-work states will have higher per-capita personal incomes than Michigan by 2010, at which point Michigan will be the real right-to-work-for-less state.

Alabama could overtake Michigan in 2011.

Michigan no longer compares well with Alabama, "where the skies are so blue," according to Lynyrd Skynyrd -- and where the auto industry is flourishing. While General Motors and Ford slashed their payrolls, automakers in Alabama were building new plants and creating jobs.

According to the U.S. Census, between 2001 and 2006 employment in auto manufacturing in Alabama more than tripled and employment in parts manufacturing increased by more than a third.

But it isn't just cars. According to the Bureau of Labor Statistics, between 2001 and 2006 Alabama added 73,000 jobs, increasing payrolls by 3.9 percent, while Michigan lost 220,000 jobs -- a loss of 4.8 percent.

Alabama's unemployment rate averaged 4.7 percent during that period, compared to 6.5 percent in Michigan.

In 2001, per-capita disposable income was $4,000 higher in Michigan than in Alabama, but by 2006 that advantage had shrunk to less than $2,000.

We should be prepared to learn from and even emulate Alabama. That means freeing up our workforce with reforms like a right-to-work law.

Repeal or reform of Michigan's strict prevailing-wage law, which requires the payment of union wages on state-financed construction, would also be helpful.

The prevailing wage adds 10 percent to the cost of construction, adding roughly $250 million to the cost of government. Prevailing wage also costs jobs.

Alabama, which does not have a restrictive prevailing-wage law, added 5,000 construction jobs between 2001 and 2006, while Michigan lost 26,000.

Finally, we should look at our tax burden. According to the Tax Foundation, state and local governments in Michigan take 11.2 percent of personal income.

Reducing the tax burden to Alabama's 8.8 percent could spur the creation of new businesses that create new jobs.

Above all else, if we are going to restore Michigan's economy, we will need to quit repeating our failures and start emulating successes. Michiganians might have been justified in looking down on Southern states once, but those days are over.

When it comes to solving Michigan's current economic crisis, "Sweet Home Alabama" is a good place to look for answers.


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