Politics

Pat Buchanan explains why unions are so upset with Michigan's right to work law and the political implications.

"Michigan just legislated the open shop.
And behind the blue-collar bellicosity in Lansing is this new reality. Non-union workers can now "free ride" on union contracts. This is close to a non-survivable wound for labor.
Workers who do not belong to unions will cease paying dues, and union members will begin quietly to quit and pocket their dues money.
Why pay dues if you don't have to? Why contribute a dime to a union PAC if you don't have to, or don't like labor's candidates?"

This could be the key for a recovery in Michigan.

"Michigan workers are not going to suffer. They have simply been given the freedom to join or not join a union, to pay or not pay dues. And while wages in right-to-work states such as Virginia, Tennessee, Texas and Florida are slightly below those of other states, employment in right-to-work states is higher. "

This is the economic reality. Coercive unions artificially raise the price of labor above the market price. The consequence is fewer workers are hired and the companies who hire them become less competitive until they eventually go out of business.

"But union power is going to be circumscribed as non-union workers elect to free-ride and union members start resigning. And just as Michigan saw Indiana creating jobs after passing right-to-work, other states may observe Michigan and go forth and do likewise."

Let's hope Ohio follows ASAP. While getting the following mechanism right, he gets the blame all wrong.

"A second blow came with the postwar rise of Germany and Japan. Their plants and equipment were all newer than ours. Their wages were far lower, as they did not carry the burden of defending the Free World. Under our defense umbrella, they began to invade and capture our markets.
And Uncle Sam let them do it.
A third blow to Big Labor, concentrated in the Frost Belt, came from the Sun Belt. With air conditioning making summers tolerable, the South offered less expensive and more reliable labor than a North where union demands were constant and strikes common.
But the mortal blow to American unions came from globalization.
With the collapse of communism in Eastern Europe, the Soviet Union and China propelling hundreds of millions of new workers into the global hiring hall, U.S. multinationals saw historic opportunity.
If they could move factories out of the U.S.A., they would be free of union demands, wage-and-hour laws, occupational health and safety laws, environmental laws and civil rights law. By outsourcing, they could produce for a fraction of the cost of doing so in the U.S.A."

Buchanan identifies a plethora of government policies as the problem, but then he blames foreign countries and globalization. The problem isn't overseas. It's in Washington D.C., state capitals and local government offices. I'm ignoring his first point blaming automation. Capital doesn't get rid of net jobs. It just makes them more efficient so workers can create more wealth and earn higher wages.

"And if they could get the U.S. political class, in return for corporate generosity at election time, to let them bring their foreign-made goods back to the U.S.A., tax and tariff free, profits would explode, and salaries and bonuses with them. "

Buchanan really goes off the rails when he advocates protectionism.

Conservatives win big in Japan, but I doubt they will cut government. Like politicians here, they get rich off government intervention.