I don’t want to sound like a broken record here but what is happening in Michigan truly is amazing.  When tied into the Presidential election results, the ruckus in Wisconsin and Indiana becoming a right-to-work state it becomes astounding.  For perhaps the first time in decades, despite having a liberal Democratic President in office, Labor is on the retreat.  Just as in Wisconsin and Indiana they have vowed to fight back however.

In truth Michigan’s recent actions have been in the works since 2011 when two newly elected state Senators brought up the idea of right to work legislation.  That legislation went nowhere though as the state grappled with severe budget woes.  But despite stalled momentum Labor’s decision to push Prop 2 in 2012 which would have enshrined CBA rights in the state Constitution gave Republican legislators the unofficial support of the public and more importantly solid backing from the business community.  The business community had been sitting on the sideline of this possible fight until Prop 2.  With the stars perfectly aligned in Michigan for right-to-work it is little wonder why Governor Snyder had a change of heart and signed the law.

But the actions in Michigan point to a deeper issue for Labor.  An issue that Labor (at least in the private sector) has been dealing with for decades.  This issue, unsustainable wages and benefits while forcing companies to pay more and more, has come to a head since 2011.  Along the same lines to keep providing these benefits to its base labor has blocked entry into unions and actually helped create its own downfall.  It is striking that in the heartland of Labor country (ie. Midwest) they have been targeted for reforms from numerous states.

However, these reforms have been a bipartisan affair.  Since 2010 unions, public and private, have been targeted by both GOP and Democratic Governors.  In deep blue states in the Northeast such as NY and CT which have Democratic Governors unions have had to make deep concessions.  In states like Wisconsin, Indiana, Ohio and now Michigan they have seen what they perceive as their very existence threatened.  In Ohio they were able to beat this threat back but in Wisconsin, Indiana and now Michigan they were not.

Today Labor has many internal factions.  In the past Labor used to only represent blue-collar, industrial workers.  With the creation of the SEIU, the powerful Nursing Union and others that traditional union presence has disappeared.  Instead, you have numerous unions constantly vying with one another for an ever diminishing number of private sector members.  When unions are threatened however in any way these divisions seem to disappear and they respond with a vengeance.  Wisconsin, Indiana and Ohio provide pertinent examples of this.

In Wisconsin starting in early 2011 Governor Scott Walker reformed CBA rights for public and private sector workers (excluding police and firefighters).  The backlash was fierce with protests and violence in Madison.  The union opposition culminated in several bitter election fights (State Supreme Court-mid 2011, recall of six sitting senators-summer 2011 and recall of Governor Scott Walker-June 2012) and Labor ultimately not getting its way.

In Ohio, Governor John Kasich went even further than Scott Walker and had his CBA reforms hit firefighters and policemen.  In 2011 the reform was put on the ballot through a statewide referendum and it fell with over 65% opposed.  Since then the legislature and Governor have been limited in their reform efforts.

Indiana went the furthest in its efforts.  Indiana’s turn to a right-to-work state has been a decade in the making.  Market and spending trends helped accelerate the process however.  In 2011, after opposition from Labor and Democratic legislators who fled the state (this tactic was employed in Wisconsin as well) a right-to-work law was passed and signed by Governor Mitch Daniels.

Unions recorded significant victories in 2012.  They helped reelect Barack Obama (or so the conventional wisdom holds), knocked out several controversial Republican public officials in Indiana and Ohio and helped Democrats make deep gains at the Congressional level in California.  They also helped Tammy Baldwin (WI) and Senator Sherrod Brown (OH) win their tough races.  However, in both CA and WI they saw their efforts to strengthen Collective Bargaining rights fall flat.

The media coverage of Michigan’s action has been mixed.  Fox News has covered it from the aspect of unions behaving as organized gangs.  The rest of the media (minus foreign media) has covered it has a political shock and been deferential to union protests (big shock).  But the one thing all the media coverage has agreed on is that Labor’s victories in 2012 did not scare GOP reformers nor change the fundamental problem unions face today.

Michigan points to the fundamental flaws of Labor today: a shrinking workforce, unsustainable benefits and wages for its members and its negative effects on business.  Even if we take the choice argument out of the debate which basically is that in a right-to-work state you have a choice not to pay dues to a union.  In a non-right-to-work state you do have to pay dues to a union whether you belong to it or not.  The economy and the public is changing, state budgets are shrinking, and reforming CBA rights is not the political no-no it used to be.  Michigan shows this and says a lot about the state of organized Labor in the US.

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