1/24/08

Union power yields labor-state backlash

In a recent Delaware Voice essay, Eleanor D. Craig, associate chairwoman of economics at the University of Delaware, analyzed the benefits of locating an automotive manufacturing plant in Delaware compared to Mississippi.

She says government decisions are the primary reason Toyota is breaking ground for a new plant in Mississippi, while the Chrysler plant in Delaware is on the brink of closing. As she sees it, "Delaware's economic health is being threatened by government actions which make other states, like Mississippi, the preferred choice for both new and old business."

According to Craig, at the top of the list is the fact that Mississippi is a right-to-work-state, while Delaware is not. A whopping 12 percent of our workers are union, while Ole Miss has just 6 percent. She said that in Delaware that means a 20 percent paycheck "premium" for union workers.

Mississippi also doesn't have a prevailing wage law. We do. That means we mandate higher wages for construction workers on public projects. Again, according to Craig, we pay carpenters, electricians, steelworkers and masons about 20 percent more than we have to.

She also said Delaware ranks lower than Mississippi when it comes to income and employment growth prospects, and that Mississippi has a better income tax rate than Delaware does .

The more I read, the more it dawned on me: The message seemed to be Delaware should shape up and be more like Mississippi. I don't think so.

For all the advantages of cheap labor in business-friendly Mississippi, Craig neglected to mention that Mississippi ranks as the poorest state in America, with one of the most atrocious unemployment rates.

According to the CNNMoney.com ranking of rich and poor states, Delaware ranks around 11th richest. Mississippi is the poorest at 51. When it come to unemployment among states, Delaware ranks ninth, while Mississippi ranks 49th.

Need I go on? Measuring household income, per capita income or poverty levels, Delaware is doing great. Mississippi, unfortunately, is an economic basket case.

Anti-union backlash

What bothered me most about Craig's attempt to make us believe Mississippi is better than Delaware when it comes to economic growth was not just the deceptive statistics, but singling out workers' wages as a culprit.

The article was a thinly veiled argument for cutting union membership, as well as trimming wages paid to construction workers on state building projects.

Why pick on the paychecks of hard-working men and women as a way to make Delaware better? Why hold up Mississippi as a model for us?

At a time when working family budgets are being squeezed on all sides, are we to believe this is the moment to dismantle the prevailing wage mechanisms propping up wages for a fortunate few blue-collar families in Delaware?

Direct wage subsidies, such as Delaware's prevailing wage laws, should be viewed with no less respect than the indirect subsidies granted to corporations. When AstraZeneca was looking for economic incentives, Delaware forked over nearly $100 million in land, cash and road construction. The purpose was to subsidize high-paying white-collar jobs.

So why gripe when blue-collar workers pushing wheel barrels of cement on state construction jobs get a little slice of the huge subsidy pie normally feasted on by corporations with connections? Blue-collar workers pay back in taxes and increased purchasing power, just like their white-collar brethren.

Anti-union sentiment is rooted in rusty conservative thinking from way back when. The traditional conservative antagonism toward unions needs to be rethought to match the realities of the new economy.

Finding ways to maintain living wages for American workers is the most important priority. That challenge requires us to focus on creating intrinsic, non-exportable jobs, paying solid wages as well as devising means to protect those jobs. We should not be exploring ways to cut paychecks and wage protections so we can compete with China or Mississippi.

Delaware has great brains who will find ways to maintain economic growth and generate high wages for workers. Calling for Delaware to become a right- to-work state, or to repeal prevailing wage laws, is not a humane way to pursue growth.

(delawareonline.com)

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