CA should emulate MI jobs creation

California labor Michigan workersCommentary

Dec. 21, 2012

By Chriss Street

With the California unemployment still well above the national average, the Golden State might look to the Auto State for how to spur job growth.

Last week, Michigan Gov. Rick Snyder signed legislation to enact Michigan’s first right-to-work law for both private and public-sector workers, although public safety workers were exempted.

The law makes it illegal to require workers to either join a union or pay union dues without their permission.  The law was heralded by conservatives as protecting workers’ right of free association, but was scorned by liberals as destroying jobs at good wages.  But as a reward for Michigan’s new pro-jobs environment, General Motors announced it will bring back production of the iconic Chevrolet Camaro to the Michigan from Canada.

Snyder had served as the chairman of the board of Irvine, Calif. computer maker Gateway, Inc. and Ann Arbor-based Ardesta Venture Capital.

He ran for governor in 2010 on the motto, “I’m pro worker,” and has lived up to that. Since taking office in Jan. 2011, Michigan unemployment has dropped from 10.9 percent to 9.1 percent in Oct. 2012.


In his first public appearance after signing the historic legislation, Snyder was heckled as the keynote speaker for Michigan State University’s commencement ceremonies last Saturday as he encouraged students, “We want Michigan to be attractive to you so you stay here.” Inundated by news organizations that had been hoping for some wild protests and counter-demonstrations, Snyder tried to avoid controversy by saying, “I’ve talked enough about public policy this week…my preference is always to talk to the graduates.” But he did recognize, “There are some people here that don’t agree with me today.”

Speaking about his own post-college experiences, Snyder said he chose an accounting job in Detroit over a higher-paying offer in Houston, because the company helped foster his career and allowed him to stay closer to his family and friends.

Union supporters and protesters sneered at Snyder’s noble words as hypocritical rhetoric. “We are here to show our appreciation for the MSU students,” said Bill Reed, president of UAW Local 602 in Lansing. “The trouble is, the governor has not shown that same appreciation. This legislation harms these students’ future.

The Camaro decision represents at least 1,000 union jobs and comes as a big win for Michigan’s hard-hit auto sector over foreign competition.  It seems that, after the GM bankruptcy, higher productivity at plants in the United States is reducing GM’s capital investment costs and improving profitability.

Kristin Dziczek, the director of labor and industry at the Center for Automotive Research, said labor costs for new hires in Michigan are now lower than the wage costs for veteran unionized peers in Canada. “There’s a considerable number of entry-level people and a lot of the older workers have already retired or taken retirement incentives,” she said.  Dziczek added that that the relatively strong Canadian currency, known as the loonie, is dragging down the Canadian manufacturing sector versus American competition.

Ontario plant

In an interesting twist of fate, the Michigan job gains will be taken from GM’s Ontario plant that was the scene of one of the most vicious strikes in labor history.  From April 8-23 1937, more than 4,000 workers struck for better wages, working conditions, a seniority system and the recognition of their new United Automobile Workers union.

The UAW was to be an affiliate of the recently created Congress of Industrial Organization that was organizing industrial workers throughout the United States.  Ontario Premier Mitchell Hepburn vigorously supported GM management’s efforts to try to keep the CIO out of Ontario.  To break the strike, Hepburn even created his own police force, known as “Hepburn’s Hussars” and “Sons-of-Mitches.”

Fellow unionists, neighbors and communist activists funded the GM Canada striking workers for two weeks. Eventually GM capitulated over fears of losing markets to its competitors.  In the April 23, 1937 agreement, GM accepted many of the union’s demands, without recognizing the union.  To gain recognition, the union leadership publicly repudiated the CIO connection.  But everyone knew it was a great CIO victory and the first major one in Canada.  The strike marked the birth of industrial unionism in Canada.

Michigan was hammered with a “D” rating in the 2009 Index of Worker Freedom, while Snyder’s predecessor, Democrat Jennifer Granholm, still was governor.

But the success in attracting the Camaro back after passing right-to-work legislation is motivating the Republican-controlled Legislature to adopt more pro-business legislation:

* HB 5024 would increase penalties for violation of Michigan’s mass picketing statute and allow employers to seek legal means to stop mass picketing;

* HB 5023 would increase penalties for illegal public-sector strikes;

* HB 5026 would allow employers to more easily hire new workers during labor union disputes.

With more GM jobs on the way, Snyder is proving that passing right-to-work laws is great for workers. It’s a lesson California should drive to prosperity.

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