The State of Michigan
Yesterday I left Hilldale for a trip up to Lansing, for one of the 50 nationwide rallies called for by MoveOn.org. It was an interesting crowd: fireman, corrections officers, teachers, etc., all with their union flags, many wearing the red and white to express solidarity with their government union bretheran in Wisconsin.
Michigan has far bigger economic and fiscal problems than Wisconsin, yet the new GOP governor has proposed a more modest reform agenda. The crowd was having none of it. They don't see a dime's worth of difference between Gov. Walker in Wisconsin and Gov. Snyder in Michigan.
Here's what strikes me, what I may write about for the Journal Tuesday. There seems to be zero -- and I mean zero, zilch, nada, nothing, no -- appreciation at all among these unions that a state needs to be attractive for business. They may focus on keeping x or y business that is already here (eg., auto factory) but they seem to have no appreciation for the need for a robust private sector to support the public sector -- especially the kind of benefits now given out.
They all appreciate that the fight in Wisconsin is part of a national fight over the funding of both their unions and the Democratic Party through the government. And I wonder if the Democrats are now paying the price for the Democratic PArty's almost complete estrangement from the private sector.
- Comment (17)
- · Quote
- · UnfollowFollow (3)
Comments :
Jun '10
Re: The State of Michigan
Unions are divorced from productivity in the sense that unions negotiate, they do not earn. A negotiated pay raise or benefit increase is not an earned benefit in the sense that profit is earned by actions that prove a reward for effort and risk. Clearly, and at least in the private sector, it is easier to negotiate a benefit when production and profits are up, but as with all such benefits they are in the minds of union leaders and the rank an file alike not linked to productivity. There is the addition problem of the psychological impact of increasing benefits or wages, any such increase takes about two pay periods before it becomes an entitlement. It is worse in public service because public servants are insulated from market forces, and as a consequence rarely if ever feel the impact of a bad economy. As a result the taxes that pay public sector salaries are never associated with the economy that generates them. The economy becomes the black box from which money is pulled to fund any and every perceived boom union leaders feel obliged to negotiate in order to protect their positions as union leaders.
Sep '10
Re: The State of Michigan
Bill McGurn:
Here's what strikes me, what I may write about for the Journal Tuesday. There seems to be zero -- and I mean zero, zilch, nada, nothing, no -- appreciation at all among these unions that a state needs to be attractive for business.
I used to do construction work in the SF Bay area. I often used to hear the older union guys lament that the younger guys would never know what it was like to build a large refinery like the one at Benicia. They understood that they would just tweak and fix things until they were closed down to be rebuilt somewhere else. I would disagree that they do not appreciate the pickle they are in. I think many of them got it. They just understood and acted on their parochial interest hoping to keep their good thing going as long as they could.
Sound familiar?
Dec '10
Re: The State of Michigan
There are two explanations. The more charitable is that they don't care about the rest of the state. Their own personal marginal interest is served by their behavior.
The second is that they simply view the economy in the same way as a 6-year-old girl who wants a pony.
Jul '10
Re: The State of Michigan
Ross Conatser
Bill McGurn:
Here's what strikes me, what I may write about for the Journal Tuesday. There seems to be zero -- and I mean zero, zilch, nada, nothing, no -- appreciation at all among these unions that a state needs to be attractive for business.
I think many of them got it. They just understood and acted on their parochial interest hoping to keep their good thing going as long as they could.
There's something to that Ross, but I think Bill is essentially correct. Here's a mind-boggling truth: the unions in MI felt put upon throughout the Granholm administration. Since Engler served three terms before Jenny's two, the unions figure they've been getting hosed for more than twenty years.
Thing is, we've been in a recession for about 10 years, and so -even though she did everything possible to keep propping up unions- they never got anything close to what they expected from her.
Oct '10
Re: The State of Michigan
Gee, Bill, it almost appears that you are expressing a mild degree of surprise at this. Both Cas and Ross have well spoken about the dynamics of government unions. Remember that in Norway and much of the EU the military is unionized, and there has even been the occasional strike. Government unions are entirely divorced from any reality enforcing economic system. The taxpayer is thrice removed from the folks who get their money. There is taxes, government bureaucracy, and the union. The connection to reality is sooo loose as to be non-existent. Add to that the leftward sympathies held by union leadership, and, viola, we get the Che Guevara revolutionary mentality.
Folks, the war has finally begun. We are left with no alternatives but to engage. Governor Snyder is simply standing in the middle of the battlefield still wondering what all the heavy artillery is moving about for. Soon he will either engage or become one of the casualties.
Sorry GOP, your squishyness has brought us to this point, and like Chamberlain, you have either to fight or be tossed aside, hopefully in time for a Churchill, or Scott Walker, to take over the battle, and win.
Dec '10
Re: The State of Michigan
While money is fungible, power has value only to the hand that holds it. An upraised clinched fist is their tradition, corrupted political patronage their wet-nurse, and thuggish intimidation their birthright, unions use power to take money, and want more of both, because for them it goes hand to hand.
The strength of assembled union masses will have more to do with the re-election of our historic first Islamic apostate president than the worthiness of his opponent.
Sep '10
Re: The State of Michigan
Nicely said, was that exactly 200 words?
Would you say that Unions are ultimately doomed to destroy their industries because of the ratcheting up of pay and benefits in good times and the sense of entitlement that comes with those deals.
Also, since management has a big stake in keeping things rolling along, can they ever effectively counterbalance the union's destructive (in my opinion) appetite.
Dec '10
Re: The State of Michigan
Ross Conatser
Nicely said, was that exactly 200 words?
Would you say that Unions are ultimately doomed to destroy their industries because of the ratcheting up of pay and benefits in good times and the sense of entitlement that comes with those deals. · Feb 27 at 12:28pm
Ask Detroit. Or Cleveland. Pittsburgh was able to save itself, but it's population is about half of what it was.
Re: The State of Michigan
Bill, you are on to something with that. When I discuss at the Capitol the response of producers to taxes, the unionists have one of three reactions: 1) denial; 2) arguing that the ones who leave are less productive so we're better off with the ones who stay behind; and 3) the ones who leave are bad Minnesotans and good riddance to them. The evidence out there for the effect of state and local taxes on employment is pretty good -- not perfect, not a settled issue, but most think the argument is over the size of the effect, not whether there is one.
Economics also teaches that the size of the distortionary costs of higher state taxes rises with the square of the difference in the tax rates between, say, Minnesota and South Dakota. This will get worse even if states do nothing because of potential return of the Pease provisions on deductibility of state taxes. We can hope Gov. Snyder will be moved by that before his productive citizens move elsewhere.
Re: The State of Michigan
Interesting comments. I'm not surprised by the militancy: the unions are right that this is a mortal threat to the funding status quo both for their unions and the Democratic Party.
What *does* surprise me is the complete lack of awareness of the situation of their fellow citizens. I know teachers and government employees -- my dad was a Marine and later FBI agent -- and I hear from some of them about how they got into their jobs and what the deal was. What surprises me is they do not seem to apprehend that private sector workers have gone through the pain they are not facing, or that their pay and benefits should have anything to do with what the state can afford. At Lansing they chanted "Tax the Rich," as though there are going to be any rich left in a state that has actually lost population, or "End Corporate Welfare," which ironically is one of the things that the governor wants to do viz a subsidy designed to entice the film industry here.
I also think this lack of appreciation for what their neighbors have gone through makes them even more unsympathetic to voters they need to persuade.
Re: The State of Michigan
I feel bad for these protestors. They'll never find peace if they hang their hat on union philosophy so sternly. "Less work for more money" as a mantra will always be doomed. It can never end well. Something in today's Novus Ordo Gospel made me think of the angry faces of the protesters. Why so worried about tomorrow? why? Because there's something wrong with your game. It's better to be outside of this game through self reliance or becoming a monk, or anything but this angry path.
Nov '10
Re: The State of Michigan
For many years, I worked for a durable goods manufacturer of well over a thousand employees. It was a split shop. Union membership was voluntary. For the local job market, everyone was well paid and had attractive benefits, Union or not. I was in engineering and interacted with all flavors of shop workers, because we shipped our prototypes.
It always bothered me how the Union workers rabidly worked for the Union. The Company was somehow the enemy. The Union workers held efficiency and profitability in very low regard...just enough to avoid being fired for blatant disregard. Fortunately, perhaps as a by-product of personal esteem, they were attentive to quality, but no more so than anyone else.
As a lifelong non-union person, I never could understand how the Union workers could hold the Company, whose success they were dependent on for their paycheck, in utter contempt. Complete divorce from the fundamental necessity of profit.
It’s just wrong...a character flaw. Perhaps this thread pertains more to the public sector, but I see many similarities with my experiences in the private sector.
Jan '11
Re: The State of Michigan
I agree. I lived near The Palace of Auburn Hills. I couldn't leave quick enough. I do miss Speaking Canadian at the Windsor Ballet. (I think that was her name.)
When you encounter such strong belief, or disbelief, on a topic which you feel knowledgeable; how do you insure you are not the oblivious one?
Dec '10
Re: The State of Michigan
"Here's what strikes me, what I may write about for the Journal Tuesday. There seems to be zero -- and I mean zero, zilch, nada, nothing, no -- appreciation at all among these unions that a state needs to be attractive for business."
I think this may miss a more general trend. I live in a rural area, to which Yankees move, and now ordinary farms have to post signs, all over, warning neighbors that plowing, or burning may yield dust, or smoke. What is a business, exactly, that doesn't operate within appropriate zoning constraints, yet has manageable impacts?
I understand that there is writing, or writing code for computers, but even the most basic emissions from many creative businesses are constrained by our sensitized society.
Set aside the union question, for a moment, and ask yourself, when was the last time you saw a start-up manufacturer, of even the lowest impact, appear near you?
I want to take some existing land down the street from me, with old tropical fish ponds all over it, buy it, and turn it into a paying business. I have folks sitting on money that have asked me if I have an idea.
Jul '10
Re: The State of Michigan
Bill, since you're noodling a piece, here are a couple of things that might be worthwhile:
1) I don't believe for a second that the momentum for change in MI in the last election was as significant as in WI. It was great to take back the house, governorship, & increase our majority in the senate. That said, the unions made sure (amplifying your point that they're out of touch) that a completely unelectable fool got the dem gubernatorial nomination. He was incapable of getting 40% of the vote in this bluish state.
2) The budget shortfall is worse than advertised. Last year legislation passed that all (union & non) state employees would have to start contributing 3% for their health bennys. Sounds good, but it probably won't hold up. You see, non-union state employee compensation is constitutionally determined (see section 5) by the balanced Michigan Civil Service Commission, as is who can & can't collectively bargain.
The commission has already ruled that mandatory contributions are no good, and a court has ruled in the commission's favor. Meanwhile, the legislature and governor are pretending that the contributions are going to continue.
Dec '10
Re: The State of Michigan
I have the idea, I have the land, I have the financial backers, but we can't move forward, because nobody can do anything in a world where a farmer can't plow his field. This is where we are.
I am an expert in commercial and industrial permitting, for air and water quality issues. Anywhere in the country, east from Kansas, I have been brought in to study air quality, wildlife, fisheries, water quality, and I'm pretty darned OK at it. If I wasn't, people wouldn't hire me to do this, because my work would not pass muster and people with stockholders wouldn't hire me.
People that know me, that know the projects I have permitted and managed over the years, that have ASKED me if I had an idea, won't move forward on a business proposition that they have asked me to put together, because they are uneasy.
I went to lunch with a venture capitalist and presented him with three ideas and he was kind enough to say they all had merit, but he zeroed in on the one I wasn't pushing, the one I already had funding for.
Dec '10
Re: The State of Michigan
Today, to make sure money, you need a gimmick.
Produce nothing, but find somebody to bill for your time, then get a chair before the music stops.
I can make sure money, billing somebody else for time to help their project, and so can everybody else, until their money runs out.
Forget cars, or refrigerators, or any old business upon which unions have an influence. Step back and contemplate how impossible it is, for anybody, to create anything, in this country, that isn't paper or digital, (which we cannot eat, nor heat our homes with)
I promise you that everyday, in every way, the far left that is entrenched in our bureaucarcies live to place obstacles in the path of prosperity. They actiually tell me this, to my face, in meetings.
Unions are just a tactic..