The economic evidence for the value of right-to-work laws, which allows individual workers to choose whether or not to join or otherwise support a union, continues to build. Last week the Cascade Policy Institute issued a report indicating that Oregon would have 233,000 additional jobs and wage income would be 13 percent higher if it had passed a right-to-work law in 1985, at about the time neighboring Idaho took that step.

The paper, assembled by Ph.D. economists Eric Fruits and Randall Pozdena, compared the economic performances of right-to-work and non-right-to-work states. Fruits and Pozdena found that right-to-work states enjoyed a "robust" and positive effect on employment, personal income, and wages.

Fruits and Pozdena reached their conclusion after performing a regression analysis that accounted for a wide range of factors, such as the national business environment, population density, taxes and education.

Mackinac Center analysts have long advocated a right-to-work law for Michigan based on our own straight-up comparisons of right-to-work and non-right-to-work states. With Indiana passing its own law, Michiganders will soon get to see the value of labor freedom up close. 

Public school special interests groups uniformly lobby for the state to give more money to school districts. To sell this idea to policymakers and taxpayers, these groups often claim that schools need "adequate," "stable," and "equal" funding. These talking points give rise to some common myths about school funding in Michigan.

The short video below examines one of these myths: The Unequal Funding Myth.

Michael LaFaive, director of the Center’s Morey Fiscal Policy Initiative, was quoted in an Alpena News editorial over the weekend about the impact on Michigan now that Indiana has extended right-to-work protections to its workers.

“I worry that without a right-to-work law of our own, Indiana will grow at Michigan’s expense,” LaFaive said.

Indiana already outpaces Michigan in a number of areas, which can be seen in commentaries by Mackinac Center experts here, here and here.

Nick Dranias at the Goldwater Institute has run the numbers on the costs and consequences of the decision a few decades ago to give state, school and local government employee unions the power to force public bodies to engage in collective bargaining. It’s not pretty. Here’s an excerpt:

From 1958 through 1968, illegal work stoppages or strikes at all levels of government increased 1,593 percent, resulting in a 33,790 percent increase in the loss of workdays. In 1967, New York City sanitation workers struck and buried city streets under 10,000 tons of garbage per day. In 1978, striking firefighters in Indiana refused to respond to a fire that burned through a downtown city block. “Blue flues” have repeatedly struck law enforcement officers in California since 1985, when the state’s Supreme Court ruled that public safety employees had the right to strike. And in December 2005, New York transit workers went on strike, costing the city $400 million per day in lost business and revenue.

The strike threat entailed by unionization combined with the power to force government employers to bargain over wages and benefits has empowered the average government worker to demand and receive hourly pay and benefits that are now 44 percent higher than the average private-sector worker’s. Those high costs are bankrupting state and local governments — and taxpayers — across the nation.

But it does not have to be this way.

More than 30 years ago, Virginia banned government-sector unions from collective bargaining and entering into collectively bargained contracts. Within seven years, government employees had abandoned their unions in droves as they realized the union did little for them.

Statistical analysis shows that if states prohibited all forms of collective bargaining, they could reap a total of nearly $50 billion in savings for state and local taxpayers across the country.

Read the rest here.

To Dranias’ list we can add these examples from Michigan: Illegal teacher strikes in Detroit in 1999 and 2008; and as reported in CapCon just this morning, state employee compensation costs that have increased on average from $78,999 in 2001 to $94,888 in 2011 when adjusted for inflation.  

Patrick Wright, director of the Mackinac Center Legal Foundation, was a guest on “The Vic McCarty Show” Thursday on WMKT AM1270 in Traverse City. Wright discussed the plight of a group of graduate student research assistants at the University of Michigan whose rights to due process have been denied by the Michigan Employment Relations Commission, which ruled that students opposed to being unionized could not present their side during hearings on the matter.

Portage Public Schools had an odd reaction to some good financial news this week, telling a company that could save it $270,000 a year "no thanks." That offer came from Grand Rapids Building Services, a facilities cleaning contractor that proposed taking over the school district’s first shift custodial duties.

GRBS is able to accomplish the same work at a lower cost primarily because it uses a different benefits package than Portage schools, one that doesn’t include overpriced health insurance from the Michigan Education Special Services Association or expensive contributions to the unsustainable school employee pension plan. GRBS’ more reasonable benefits packages mean it can provide the same service to the district for about $20,000 less per custodian, according to The Kalamazoo Gazette.

Portage’s refusal of GRBS’s offer is especially odd because it already contracts with the company to provide its second- and third-shift custodians, and has since 2009. In fact, the board appears content with that service as the proposal came at the same meeting where they renewed their contract for those second- and third-shift custodial services.

The reason the school board is turning down the offer appears to be one completely unrelated to fiscal prudence or concern for quality services. School Board President Bo Snyder told The Gazette the district walked away from the $270,000 savings because “prior boards have elected not to use the outsource model for the first-shift custodians in the buildings.”

In other words, the current board won’t make a sound financial decision because previous boards didn’t make a sound financial decision.

That kind of financial strategy is one reason why school districts always feel like they’re in a budget crunch, despite the fact per-pupil spending has risen steadily over the last 40 years. Districts like Portage need to remember their primary goal is not to perpetuate the status quo; they should be more focused on funding learning than funding insurance companies.

A Saginaw News article posted this afternoon asks in its story headline, “Is Fabiano Bros. a Monopoly?” The story covers a verifiable assertion I laid out in a commentary titled “Eight Ideas for Reforming Alcohol Control in Michigan.”

Unfortunately, the article is comprised largely of a collection of redirections on the part of the Michigan Beer and Wine Wholesalers Association, the Lansing-based trade group that represents state wholesalers. Fabiano Bros. is a beer and wine wholesaler headquartered in mid-Michigan.

First, and with respect to the reporter, she omits useful explanatory language. The full paragraph from my commentary reads:

Eliminate the beer and wine distributor monopoly on territory. Strip from the Michigan Liquor Control Code the requirement that suppliers of beer and wine grant exclusive sales territories to a select group of wholesalers [Emphasis added.] This mandate prevents competition, shackles suppliers and raises costs for consumers.

Then she writes that Michael Lashbrook, president of the Michigan Beer and Wine Wholesalers Association thinks the Mackinac Center is “off-base calling any distributor in the state a monopoly.”

As is plain from the text, we did not claim that any distributor was itself a monopoly. We argued that state law mandates that suppliers grant exclusive (the very definition of a monopoly) sales territories to wholesalers (plural). These are different concepts, though it is easy to forgive the reporter for any confusion.

What is troubling, however, is that Lashbrook was allowed to respond unchallenged with a redirection about manufacturers, not wholesalers:

We always tell people who question if there is a monopoly to go to a major grocery store and walk down the cereal or laundry detergent aisle and see how many manufacturers are represented on the shelves," Lashbrook said. "You'll see those product lines dominated by just a few manufacturers but if you go down the beer aisle or the wine aisle, you will see dozens, if not hundreds of manufacturers represented and that's true competition.

It’s true that there are numerous products in the average beer aisle, but that has nothing to do with the fact that the beer makers were required by an outdated state law to have their product distributed by one particular supplier in a particular territory, a practice that drastically limits competition and probably drives up costs to consumers.

Lashbrook also claims that these protectionist laws give “stability” to wholesalers and allow companies like Fabiano Bros. to grow and add employment. But this only tells one side of the story. That stability comes at the expense of consumers and other businesses who pay more for every drop of alcohol purchased than they would in a competitive marketplace. It also discounts the impact of others who would like to get in the distribution business but can’t because the supply is largely buttoned up.

Lastly, Lashbrook makes the odd charge that "the Mackinac Center believes you should treat it (alcohol) like a box of corn flakes." This claim is simply not true as a simple review of our published work would clearly indicate. Visit www.mackinac.org/1933 to see for yourself.

The Michigan Beer and Wine Wholesalers are arguably the greatest beneficiaries of an archaic liquor control code. It reads as if it were written for these lucky few members of a hereditary and elite millionaire’s club.

State-mandated territorial monopolies on the sale of beer and wine are worse than inefficient. They are an abuse of power over consumers of every stripe. This commercial cronyism — the cozy relationship between business and Lansing government — must end and soon.

An Op-Ed in the Orange County Register about public-sector pension reform in California cites a recent Mackinac Center study that found switching state employees hired after 1997 from a defined-benefit retirement system to a defined-contribution system has saved Michigan taxpayers as much as $4 billion in unfunded liabilities.

Just prior to noon Wednesday, the Indiana Senate passed House Bill 1001 on a 28-22 vote. Gov. Mitch Daniels signed the enrolled bill a few hours later. While the law does not change contracts currently in force, workers in Indiana will no longer have to pay union dues or agency fees as a term of employment when new union contracts are signed.

If the past is any guide, the law should be a boon to Indiana's economy and a tremendous benefit to Indiana's workers. Right-to-work laws are associated with faster economic growth, job creation and rising wages.

The law empowers workers and makes unions more accountable to the members they represent. We have every reason to believe that the working men and women of Indiana will use their new prerogatives wisely, that unions will adapt and survive, and that the great majority of Hoosiers will benefit.

We are confident that as Michiganders see what right-to-work protections bring to Indiana, support for labor freedom will expand here. Michigan may become the 24th right-to-work state, perhaps as early as the end of this year.

If there is a challenge in defending the right-to-work concept, it isn't researching or writing, it's boredom. Union officials continue to tell the same stories. After a while the material you have to read through and rebut gets repetitive.

For instance, here's retired AFL-CIO Program Manager John Kreucher in the The Jackson Citizen Patriot:

By undermining workers’ rights, this unfair scheme would give even more profits to greedy CEOs at the expense of our jobs, our retirement security and our kids’ future.

A recent study by the nonpartisan Economic Policy Institute found that workers in right-to-work states have a lower standard of living, make an average of $1,500 less per year and go without health insurance more frequently...A better name for this legislation would be “right to work for less.”

Greedy CEOs, hapless workers, yadda-yadda-yadda. And "right to work for less" —  real original.

OK, as far as the loss of wages goes, here's the data from Oklahoma:

(Source: Bureau of Economic Analysis)

See that big drop in wages starting in 2001 when Oklahoma enacted a right-to-work law? Yeah, neither do I. Such is the terror that awaits Michigan workers when they are no longer forced to pay union dues and agencies fees in order to keep a job — steadily rising wages. Oh the humanity!

If there's one thing that Michigan has to fear from a right-to-work campaign, it's boredom due to a union establishment that cannot come up with a real threat or even an original epithet, but can be counted on to repeat the same old rhetoric, over and over and over...

Jan. 29 through Feb. 5 is Catholic Schools Week 2012. To mark the occasion, you may like to read this 2005 commentary by Andrew J. Coulson, “Catholic Schools and the Common Good.”

Burt Folsom, senior fellow in economic education at the Mackinac Center, and his wife Anita have written a new book about President Franklin Delano Roosevelt, according to the Midland Daily News.

The book, "FDR Goes to War: How Expanded Executive Power, Spiraling National Debt and Restricted Civil Liberties Shaped Wartime America," is published by Simon & Schuster.

The Folsoms are "nationally recognized experts on the economic and domestic policies of Roosevelt," the Daily News said.

The Folsoms also drew note in 2010 for "New Deal or Raw Deal: How FDR's Economic Legacy Has Damaged America."

The Folsoms will also appear on "Book TV" on C-SPAN2 at 11 p.m. Feb. 4, according to the Daily News.

Note: There will be no roll call report next week. Any noteworthy votes next week will be included in the Feb. 10 roll call report.

Y = Yes, N = No, X = Not Voting

Senate Bill 204, Eliminate county commissioner vacancy special election requirement: Passed 26 to 12 in the Senate
To eliminate a requirement that a special election must be held when a county commissioner vacancy occurs during an odd numbered year. Under current law, special elections already are not required if the vacancy occurs in an even-nubered year (a regular election year, that is).

Who Voted "Yes and Who Voted "No"

Senate Bill 721, Impose "plastic bulk merchandise container” transaction regulations: Passed 38 to 0 in the Senate
To impose new recordkeeping and other regulations on the buying and selling of 10 or more "plastic bulk merchandise containers” such as those used by soft drink and bread manufacturers. Reportedly, people steal these and sell them to plastics recyclers.

Who Voted "Yes and Who Voted "No"

House Bill 4658, Repeal prison store sales tax exemption: Passed 93 to 13 in the House
To eliminate the sales tax exemption on purchases by prisoners at prison stores.

Who Voted "Yes and Who Voted "No"

House Bill 4116, Require review and posting of state agreements with feds: Passed 106 to 0 in the House
To require that before entering any memorandum of understanding, agreement, compact, or similar binding agreement between this state and the federal government or another state, a state agency must assert that the agreement does not violate the state constitution, and does not exceed the authority granted to the agency by the legislature. Information on each agreement would also be posted on a state web site. A requirement that the Attorney General approve each agreement was not included in the final bill.

Who Voted "Yes and Who Voted "No"

House Bill 4653, Ban office-holder names on election materials: Passed 106 to 0 in the House
To prohibit the name of an elected or appointed official from being printed on any election-related material that is posted, displayed, or distributed in a polling place on election day, subject to fines of $100 to $250. House Bill 4656 would apply the prohibition to absentee ballot materials given or mailed to a voter, and passed by the same margin.

Who Voted "Yes and Who Voted "No"

Senate Bill 130, Ban drivers license renewal if three unpaid parking tickets: Passed 58 to 48 in the House
To reduce the number of unpaid parking tickets a person can have before the Secretary of State will not renew a driver license from six to three, which then requires paying an additional $45 "clearance fee." This vote sends the bill to the Governor for signature or veto.

Who Voted "Yes and Who Voted "No"

SOURCE: MichiganVotes.org, a free, non-partisan website created by the Mackinac Center for Public Policy, providing concise, non-partisan, plain-English descriptions of every bill and vote in the Michigan House and Senate. Please visit http://www.MichiganVotes.org.

A recent House Education Committee hearing on repealing an artificial limit on the number of students who can take advantage of online charter public schools featured a full display of the unfounded opposition to allowing parents this choice. The opposition is driven largely by beneficiaries of the public education status quo, and falls into three categories: Fear of competition for school money; lack of trust in parents and potential competitors, and something called the “burden of proof fallacy.”

A useful characterization of the reactionaries’ opposition was provided by Tom Watkins, former state superintendent of public instruction. Testifying in support of a bill to repeal the online charter cap, Watkins quoted Machiavelli’s The Prince:

For the reformer has enemies in all those who profit by the old order and only lukewarm defenders in all those who would profit by the new order, this luke-warmness arising partly from fear of their adversaries, who have the laws in their favor; and partly from the incredulity of mankind, who do not truly believe in anything new until they have had actual experience of it.

Many conventional school districts fear online charters because they could potentially cut into their own “market share” of students — and the state dollars that are attached to them. This is one reason the Genesee Intermediate School District testified against the bill, even though its own online program (called “GenNET”) offers courses provided by the same company that operates one of Michigan’s two online charter schools (K12, Inc.).

Opponents also display distrust of any learning option not directly controlled by conventional public school districts, regardless of the fact that no child attends an online charter unless his or her parents have decided it’s in their child’s best interest.

In additional to that supreme level of accountability, there are several other layers that apply to Michigan’s online charters. A school board of public officials oversees school operations, and a state institution of higher education ensures the school is meeting the demands of a detailed contract.

Finally, some legislators insist on placing the burden of proof on online charters to immediately demonstrate some undefined measure of “quality.” This works nicely for opponents, who can cherry-pick measures that may suggest the innovative new schools are doing “worse” than others.

These same beneficiaries of the public school status quo, however, wouldn't likely subject their own preferred institutions to a similar burden of proof. What if the burden of proof was instead on conventional school districts to demonstrate that they meet the individual and unique needs of all 1.7 million school-age children in Michigan? There’s already a lot of evidence that regular school districts fail by this measure, as the long waiting lists for online and brick-and-mortar charters shows.

The one real shortcoming of this online charter cap repeal bill is not allowing regular school districts to offer geographically unrestricted online learning options. Once the current online charter school cap is repealed, the Legislature should level the playing field by letting any school district enroll students from anywhere in the state in an online learning experience, if that’s what their parents choose. With 21st century technology, it’s preposterous to limit learning opportunities to lines on a map.

Labor Policy Director Paul Kersey is cited in today’s Wall Street Journal in an article about the economic prosperity enjoyed by right-to-work states as compared to non-right-to-work states. Kersey found that the economies of right-to-work states between 2001 and 2006 grew an average of 3.4 percent, compared to 2.6 percent for states without such a law, and job growth in right-to-work states grew 1.2 percent, compared to 0.6 percent in non-right-to-work states. For more information about right-to-work laws, please see our resources page.

Legislation been introduced that reportedly would extract more than $1 billion from motorists through a new state fuel tax and a huge increase in the vehicle registration tax. The latter, paid each year on a car owner’s birthday, would increase 67 percent on average according to The Detroit News.

Happy Birthday taxpayer! Now, give your state government $60 more.

The plan also moves the current gas tax from the pump to the wholesale part of the transaction, raising the per-gallon levy from 19 cents per gallon to around 28 cents per gallon. The money would be spent on road and bridge maintenance.

Michigan’s infrastructure needs repair, but before looking to take more money from drivers, the Legislature needs to address the “original sin” of the state’s transportation funding mix — the 6 percent sales tax levied on fuel, most of which does not go to build or repair roads. The sales tax is why Michigan imposes the 5th highest levy on gas nationwide, but still can’t scrape up enough to fix its roads.

In other words, Michigan’s fuel taxes are already uncompetitively high, which is one reason no new road taxes should be imposed unless the extra revenue is offset by a tax cut of some sort, perhaps to the personal income tax.

Another prerequisite for higher road taxes should be to enact money-saving reforms, such as eliminating a so-called “prevailing wage” law that prohibits granting government construction contracts (including for roads and bridges) to the lowest bidder unless the company pays above-market union wage scales. Spending gas tax money on non-motorized transportation projects also must end.

Congressman Dave Camp, R-Midland, told an audience at the Mackinac Center Thursday that 2012 is “critical given the presidential election plus the ongoing effort to grow the still struggling economy,” according to WSGW AM790. Rep. Camp said he favors simplifying individual and business tax codes, including the elimination of most exemptions. He said he believes doing so would create 1 million jobs in the first year.

Graduate student research assistants at the University of Michigan have been denied by the Michigan Court of Appeals a chance to express their opposition to being unionized, according to the Detroit Free Press.

The Mackinac Center Legal Foundation, representing the students opposed to the unionization, filed a motion with the CoA earlier this month. The Michigan Employment Relations Commission has assigned the matter to an administrative law judge for a hearing that begins Feb. 1. Only parties that favor unionization will be allowed to testify.

Today marks the 175th anniversary of Michigan’s statehood. To help celebrate, here are some commentaries that give a glimpse into the state’s early days.

Michigan: Privatization Pioneer

An Anniversary All Michigan Citizens Can Celebrate

An Economic Lesson From Michigan’s Early History

Lewis Cass: Conquering the Wilderness

Happy Birthday to the Northwest Ordinance

Jason Clemens, director of research at the Ottawa-based Macdonald-Laurier Institute and an adjunct scholar with the Mackinac Center, writes in an Op-Ed in Canada’s Financial Post that “heightened uncertainty imposed on the U.S. economy by Washington is a killer for investment …”

He said the national debt, entitlement spending and Obamacare were contributing to peoples angst.