By: Stephen Waguespack
Those that stay one step ahead of the game are best able to avoid falling two steps behind the competition.
Currently, the New Orleans Saints are trying to exemplify this principle, restructuring their roster and locker room chemistry to evolve in order to stay relevant in the NFL. Kodak wishes they would have taken a similarly aggressive approach and evolved sooner to digital photography in the late 1990s, instead of holding true to film on their way to bankruptcy several years ago.
Ask any successful business competing in the global economy if they plan to evolve and they will explain clearly that evolution and innovation is key to survival. Change is not optional; it is necessary and inevitable for continued success.
This year, the Louisiana Association of Business and Industry (LABI) will celebrate its 40th anniversary. A group of businessmen focused on defending free enterprise and promoting a pro-business economy that would help Louisiana reach its great potential formed the organization in the fall of 1975. Throughout the years, it has been a model of consistency in state policy and politics, never wavering from its original mission.
At the time of its founding, the first major step toward creating a competitive economic environment in Louisiana was to pursue the enactment of a Right-to-Work law.
An in-depth study of the state’s economy at the time indicated the primary hindrance to business growth was the absence of a Right-to-Work law. A subsequent opinion poll showed that over 74 percent of Louisiana’s residents believed that union membership should not be a condition of employment. Almost 77 percent favored passage of a law to ensure the right to work without union membership.
Nevertheless, passage of such a law was expected to take years. At the time, organized labor had a vise-like grip on state government, personified by former state AFL-CIO President Victor Bussie. He was a strong ally to then-Gov. Edwin Edwards and was regarded by many as a skilled strategist during his two decades as leader for the unions.
Surprisingly, and against massive odds, LABI succeeded in getting the Legislature to pass a Right-to-Work bill on its first attempt in the summer of 1976. Following the stunning vote that sent Louisiana’s Right-to-Work bill to Gov. Edwards’ desk, Bussie stood on the steps of the capitol and told the thousands of union faithful there, “We’ll keep coming back until this law is repealed.”
The unions’ annual attempt to repeal Louisiana’s Right-to-Work law never got traction. To this day, the law is the foundation of our state’s economic development. Without it, Louisiana could not compete with its southern neighboring states – all of which also have Right-to-Work laws on their books – for business investment and the jobs it brings.
Union membership in the U.S. as a percentage of the country’s total workforce has steadily declined for decades, falling from around 20 percent some 30 years ago to just over 11 percent in 2014. Louisiana membership is a mere 5.2 percent, according to the Bureau of Labor Statistics.
The decline in membership, along with the Obama administration’s regulatory overreach in support of the unions, signals that unions are struggling to make themselves relevant to today’s mobile and informed workforce.
Unions are out of step with workers’ interests, politically, economically and personally. Unions have become increasingly active politically on numerous issues and aggressively promote a national agenda that does not usually reflect the values of many local communities across Louisiana.
Meanwhile, unions have overplayed their hands by insisting on wages and benefit structures that ignore the economic realities constraining the companies with which they bargain. This results in lost jobs and incomes to their members. Finally, younger workers joining the workforce are not inclined to turn their futures over to a union representative who tells them they cannot be paid more based on their ability, but must settle for a wage comparable to that paid to a less able co-worker.
A milestone was reached this past week as half of the states in the U.S. now protect their workers with Right-to-Work laws. Wisconsin became the nation’s 25th state to enact a Right-to-Work law on Monday, March 9, when Gov. Scott Walker signed a bill into law to protect Wisconsin’s workforce from forcibly joining a union in order to hold a job.
Indiana and Michigan became Right-to-Work states in 2012. A number of other states have Right-to-Work bills before their legislatures this year, as the recognition dawns that worker freedom translates into economic development.
The enactment of Right-to-Work laws in these three states is quite remarkable because Midwestern states have long been a union stronghold and viewed as impervious to laws that would grant workers the freedom to refuse union membership and mandatory dues, usually paid by workers even when they choose not to be union members, which is referred to as “agency shop.”
The new governor in Illinois is now attempting to evolve the state’s traditional deference to union domination by pushing reforms to make Illinois’ business climate more competitive with neighboring states.
Illinois Gov. Bruce Rauner has already issued an executive order prohibiting public unions from collecting mandatory fees from workers who don’t want to join the union. Considering over 90 percent of Illinois state workers are unionized, which is the highest rate in the country, this effort has brought out major push back from their union leaders. In fact, 27 Illinois unions have already sued the governor for this action.
Illinois has seen thousands of manufacturing jobs go to nearby states with more business-friendly laws and has tremendous budget and pension liability debt issues that are holding back its growth. The centerpiece of Gov. Rauner’s budget proposal to address these debt issues is described by the Wall Street Journal as recommending, “cuts to state transfers to local governments, adjustments to government employees’ health plans, and structural changes to public-union pensions.”
Gov. Rauner has stated that his first priority is to change the way Illinois does business, saying, “We’ve got massive debt, massive deficits, high unemployment. People think, ‘just raise the income-tax rate.’ Guys, that is not going to fix our problem. We’ve gotta grow.”
Traditional union strongholds like Michigan, Wisconsin and Illinois are beginning to see the light. They recognize they must evolve if they are to compete in the global economy.
Evolution is a part of life. The dinosaurs learned that lesson the hard way. Countless companies and industries have also learned it that way over the years. In the global economy, the smart companies, industries and states will always strive to be on the cutting edge of advancing policies that keep them competitive for investment and jobs.
In 1975, Louisiana passed groundbreaking right-to-work legislation to make us more competitive. Other states are finally catching up to us and it is time we start looking for the next workforce and budget reforms to make our economy more business-friendly than other states.
If we rest on our laurels and take our right-to-work laws and private sector momentum for granted, we may miss our Kodak moment and gradually go the way of the dinosaur. That would be a tragedy. It’s our move.