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Panel Discussion: The State Of Labor

Michigan's new right-to-work law and the state of organized labor in both the private and public sectors dominated discussion Thursday at "The State of Labor" panel discussion, co-hosted by the Competitive Enterprise Institute and the Heritage

Matt Patterson, senior fellow in CEI's Center for Economic Freedom and its lead labor policy analyst, moderated the event, which also featured James Sherk, Heritage’s Senior Policy Analyst in Labor Economics, CEI Editorial Director and Labor Policy Analyst Ivan Osorio; Timothy Lee, Vice President for Legal and Public Affairs at the Center of Individual Freedom; and Brett McMahon, Vice President for Business Development at Miller and Long Inc.

The labor experts agreed the move in Michigan was a good one -- that it expanded freedom and economic opportunity for the people of the Wolverine State. As Sherk, a former Michigan resident, put it:

Why is right to work a big deal for Michigan economically? We find that right to work states are much more attractive for businesses. Union organizing goes down when employees have the choice to opt out of supporting a cause they don’t support; and companies are far less likely to end up like Hostess – and so many other great American companies [driven out of business by a union].

On the practical side, CEI’s Ivan Osorio said “[right to work] levels the playing field that is otherwise geared towards the unions.” He said unions may legally engage in coercive measures toward employers that are considered illegal for private citizens. Timothy Lee told the room that, of the 15 states with top rates of business, 13 are right-to-work states. “Not to mention,” he said, “that [right-to-work states] tend to have lower costs of living.”

The panel addressed the issue some libertarians and conservatives raise with right-to-work laws, which is they restrict freedom of contract for the employer. In response to the hypothetical question of an employer wanting a closed-shop, Osorio said, “First of all, that’s a situation that never happens.” After the laughter subsided, he continued, “And that is an issue that exists only in a vacuum. Until the time we get better labor laws at the federal level, right to work is the best option.” Wisconsin and Indiana seem to agree, and have passed their own freedom of association laws this year. And, panelist Brett McMahon said Maine, which faces similar labor issues, could well be the next state to consider becoming right to work.

Unions are killing the goose that laid the golden egg, the panel agreed. They use an outdated model to get what they want and this model looks bad to the public and is a PR death sentence, Lee said. Unions are not financially sustainable, and over time we will witness that. “Unions put shackles on the companies they organize, they’re not as flexible or competitive, they don’t invest as much and they don’t keep pace,” said Sherk, “Over time, unionized firms lose out to nonunionized firms.”