Bachmann: Socialism, unions to blame for Michigan’s economy
Republican presidential candidate and U.S. Rep. Michele Bachmann (R-Minn.) says Michigan’s economic woes are rooted in socialist policies, and she blames labor unions, taxes and regulations for the tough economic climate in the state.
Bachmann made the comments on the Steve Deace Show in Iowa before the Nov. 9 debate in the Wolverine State. Deace had asked Bachmann about the “pro-active, positive solution that is the alternative to socialism” in Michigan.
“It’s the fruition of all of the policies of the left which really have their origin in socialism,” Bachmann said of Michigan’s struggling economy. “If there’s anything we should have learned by now it’s that socialism doesn’t work and it’s principles don’t work.”
She also attacked other GOP presidential candidates for supporting the auto bailout, calling it the latest example of socialism in the state and saying “you won’t find any surprises with me.”
“You will find in me a core conviction,” she said, providing a nod to the title of her new book. “I’ve been the only consistent conservative in this race.”
The solution to Michigan’s unemployment problem is reducing union influence by making it a right to work state, which would allow companies to cut back on wages and benefits and be more competitive, she said.
She praised Iowa, which has a law prohibiting union membership or payment of union dues as a condition of employment. About half the states in the U.S. have a similar law; Michigan does not.
“When you have a right to work state then you can have companies adjust wages so they can open up shops to more and more hires and more employees,” Bachmann said.
She said then as more companies opened up, shop wages would eventually increase as businesses work to attract the best talent, especially if taxes and regulations are slashed at the same time.
“If we can have the tax burden lower and if we can have the regulatory burden lower then employers can afford to pay more to bid up wages and bid up benefits and then everybody succeeds,” she said.
The actual wage disparities between right to work states and those that aren’t has been a hotly contested topic for decades — or at least since most of the nation’s 22 right to work states passed their laws in the 1940s and 1950s following the Taft-Hartley Act of 1947, which was enacted as a response to (and amended) the Wagner Act of 1935. The latter lays out the rights of workers to unionize, while the former addressed what was then described as too much power by the unions.
Right to work essentially allows all workers at a business where a union has organized to be represented by the union, bound by the union-negotiated contract and use the union as a bargaining agent without ever having to pay union due or join the union.
In 2001 by Lawrence Mishel of the Economic Policy Institute found that “the most important aspect of right-to-work law is its effect on wages.”
… On average, men in RTW states earn 7.8 percent less than their counterparts in non-RTW states; women in RTW states earn 6.8 percent less. … [W]e find that, even after controlling for regional costs of living, workers in right-to-work states earn less per hour. Particularly interesting is the affect on workers living in cities that are stretch across state line, placing it in both a right-to-work state and a non-RTW state. Seventeen out of 433 metropolitan areas in our sample (nearly 4 percent) spill over from a right-to-work state to a non-RTW state. Our analysis indicates that, in areas where a pure RTW state effect exists (i.e., no spill-over effect), the right-to-work penalty is larger. In fact, we find that living near a non-RTW state helps raise workers’ wages. …
But instead of focusing on individual wages, those that support right-to-work laws often point to a state’s overall economic situation — a similar argument to the one Bachmann made. For instance, the conservative Public Institute at Iowa Wesleyan College (now known as the Public Interest Institute), in a 2000 paper defending Iowa’s right-to-work law, noted a 1998 study that “Iowa outperformed most of its neighboring closed-shop states.”
… Four closed shop states border Iowa: Missouri, Wisconsin, Minnesota and Illinois. From 1947-1992, Iowa’s rate of manufacturing growth was equal to that of Missouri, slightly ahead of Wisconsin, 1.5 times higher than Minnesota, and over 5.5 times higher than Illinois. This is strong evidence that Iowa has done much better economically since enacting its right-to-work law. …