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Right to Work for Starting a Small Business

December 12, 2012

This is not a political post.  As I’ve said before, unions are great, as long as you already have a job.  The recent change in Michigan to a right to work state will not hurt the private sector unions in the short-term and may help them in the long-term.  This is a decent description of right to work.  Basically, the law means that you don’t have to join a union to be eligible for a job.  Michigan’s economy could use a boost.  See ratings here.  They also have one of the highest unemployment rates in the country (right behind my beloved CT.)

Right to work protection will help Michigan attract more business investment.  Unions are one more hassle for a business to consider when choosing a location.  My personal experience with unions is mixed.  Some unions understand the need for flexibility while others shoot themselves in the foot, thigh and waist by being inflexible.  But, in general, capital tends to flow to businesses that aren’t unionized.    This means that investors will view Michigan’s business climate as more friendly.  Companies involved in the auto industry may consider relocating closer to their customers in Michigan.  Business may also move out of non-right to work states like Illinois and Ohio and into Michigan.  Indiana and Wisconsin have had some success in poaching businesses from Illinois.

Increased business in Michigan will be good for both union and non-union employees.  Union shops can stay union and continue to collectively bargain for wages, benefits, work rules, etc.  Non-union shops can start or expand without the threat of the additional time and expense of negotiating with unions.

The result will be measured by a decrease in the unemployment rate in Michigan and increase in its’ GDP.  As the law is effective on April 1, 2003, it may take until Spring 2015 to demonstrate any success or failure.

 

 

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