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Attack On American Unions Continues

December 11, 2012

Today in Michigan, the GOP controlled legislature passed a pair of right-to-work bills covering public and private sector unions. Like most labels, this one is very misleading. It doesn’t give anyone the “right to work”. What it does is allow people to work in unionized industries without joining or paying dues. They still get all of the benefits of union membership – higher wages and benefits – but without the cost. A more descriptive name for this law would be “right-to-freeload”. In the long run, however, it will inevitably weaken unions in the state – which is the true intent of laws such as these.

But are unions really the problem? Union membership is already at historic lows. It’s hard to believe that any of our recent economic problems can be blamed on unions.

In the bigger picture, this is just another step in America’s race to the bottom. Twenty three other states had already passed right-to-work laws. Now, in order to compete with those states, Michigan is passing it’s own legislation.

As more and more states pass laws like these, we can expect already low union membership rates to decline even more. And as they do, we can expect middle class wages to fall right along with them.

Union Membership vs Wages

But this is good news for the 1%! As worker pay continues it’s slide, Corporate Profits should continue to set new highs. As a percent of GDP, they are now at 11% – almost $1 trillion above average.

Corporate Profits After Tax vs GDP

If that money was going to wages instead, it would probably close the GDP output gap – also at about $1 trillion. If so, the economy would be at potential and we would have full employment. This year.

GDP Ouput Gap



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