Thursday, December 13, 2012

Michigan Does It - Number 24

It's the law, Michigan becomes the 24th right-to-work (RTW) state. Would the Friedman's have approved? I assume so but they were intelligent free thinking folks so who's to say just how they would view it.

What comes next?

More of the same I think. The combination of desired economic growth, conservative ideology, and big money in politics will keep the press on. In the short run the result for most workers will be lower wages and less benefits. Seriously, how could it mean anything else.

Certainly there's a whole lot to this. The Michigan story adds to the discussion and keeps the subject of labor relations and workforce issues front-and-center in the media (well sort of - its hard to compete with all that passes for news these days). Regardless, there's a process of change at work here. The old union models aren't dead but they're way out of tune. Proof of this is found in the relatively low percentage of workers represented.

The concepts of collective bargaining and unionism need air-time. Most Americans don't pay any attention, after all it's an old and dusty subject compared to reality TV. But the old models will evolve. Some new form of collectivization will happen.

The pendulum is swinging to the RTW side of the equation. This will continue and as it does, the swing itself will create a change in conditions causing it to stop and start the inevitable move back toward the middle. How far does the swing have to go before the reverse? What catalysts will induce the change? When will the new forms of collectivization begin to show? What will they look like?

In the meantime as the Friedman's would point out, American workers have more and more opportunities to choose. For starters, the choice of whether to participate or not. In a closed-shop situation there's not a great deal of individualized thinking required. RTW is different. Workers need to consider and decide - support the union or go it alone?

Unfortunately the pendulum has a ways to go. The Great Recession is far from over. Job growth numbers are suspect. They are easy for politicians and bureaucrats to chuck around but paper thin and one dimensional (as a practical matter). Perhaps the catalyst will be inflation. As interest rates rise so will prices and the real situation facing the middle class will roar to the fore.

The era of the free agent American worker is upon us. If you are in the 1 or 2 % ... well you aren't reading this blog anyway, so let's move on. If you are in the top 20 % you are cushioned. Free agency is either a way of life or a novelty but not a matter of stark reality.

For everybody else - know that you are an independent free agent selling your services to someone buying in the marketplace. This is especially acute for younger workers where the average employment tenure is well under 4 years and decreasing.

The first step in managing this situation is to recognize that it exists. To wake up. Once accomplished you can get down to your business.

Travel well.
John Jeffrey Lundell

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