Dean Barber

Much Ado About Not Much

In Corporate Site Selection and Economic Development on April 27, 2014 at 8:24 am

Recently I found myself on a panel of so-called experts (please note that I include myself in that category) and one of the panelists said something that I thought was not quite right.

But time was limited and I said not a word. I jotted down some notes to myself that this fellow was thinking in very 1990’s terms and not by today’s realities. Heck, I didn’t even let my face show my disagreement with his comments.

In short, the speaker told a roomful of economic developers that you had to be in a right-to-work state to compete for industrial projects. No ifs, no ands, no buts.

Well, that struck me as a very simplistic view that no longer holds true. Now it is true that some manufacturers, even today, will give preference to a right-to-work state when considering new places corporate investment. But if I were advising them on a site search project, I would tell them that it’s a new world and that the old no longer holds true.

For the uninitiated, if a union wins an election to represent workers in a right-to -work state, individuals can essentially opt out and do not have to join the union. That does not apply in states that are not right to work. All federal labor laws regarding organizing and the holding of an election are the same.

Well before Indiana became a right-to-work state in 2012 and followed by Michigan in 2013, two bedrock manufacturing states in the Midwest with long labor union traditions, factory workers, especially in bigger operations, have been viewing union representation with a more critical eye.

Today, just 6.7 percent of workers employed in the private sector are members of a union, according to the Bureau of Labor Statistics. (Public-sector workers have a union membership rate of 35.3 percent or more than five times higher.)

Some previous hot spots of union activism are not so hot. As a matter of fact, they are downright cold, which is why right-to-work status can be overemphasized in a backdrop in which industrialized labor union movement is hardly running and gunning.

Much more telling than the Chattanooga vote in February, where Volkswagen workers rejected the UAW despite nods and winks from VW management that they should do otherwise, was a vote the month before in Youngstown, Ohio. Forgive me for quoting myself in a blog written back on Feb. 15 called The Night the Union Died.

“Now let me tell you what happened last month in Youngstown, Ohio, a city with a long tradition of labor union activism. Workers there voted two-to-one against forming a union at two Vallourec Star pipe mills.

“Representatives of the United Electrical Workers Union make noise that they will renew their fight to organize and represent workers, but they always say that after a loss. They had their heads handed to them in Youngstown, Ohio, of all places. Watch for Ohio to fall in line with Indiana and Michigan and become a right-to-work state, just as their southern counterparts have been for many years.”

We live in a country today where a good paying manufacturing job is cherished, not just in Georgia or Alabama or South Carolina (right to work states), but also in Ohio, Kentucky and Missouri, which are not right-to-work states. And the truth is that I would have no more hesitancy working a manufacturing site search project in the later states than the former.

I would tell a manufacturing company this: Yes, we will look for recent union activity in any given area (some large cities in the Northeast and Mideast can still be problematic and the Teamsters remain a serious bunch) during a site search and make note if we detect any troubling signs.

But if you pay competitive wages, communicate with your people and treat them with respect, the chances of you getting a union today are fairly remote. And that now holds true even in states with a heritage of unionism.

I have seen and spoken to a number of manufacturers in the industrial upper Midwest — places like northern Indiana, northern Ohio, and western Michigan — who have been operating non-union plants for years with no problems. Would I preclude taking a manufacturing client to those regions? Absolutely not.

If Missouri and/or Kentucky, for example, were in a prescribed geographic sphere of a site search for a manufacturing client, scratching those states from consideration simply because they are not right to work states would, again in today’s environment, be cutting off the nose to spite the face. It would make no sense.

So I largely view right-to-work as playing to perceptions of a better business climate. And because of that, it would not surprise me if some more states will eventually join the right-to-work PR club.

And that’s fine. It makes for a good selling point for economic developers, especially if directed to a company (or even a consultant) that will not take the time to examine the situation on the ground and think things out. So for me, mere right-to-work status is not a determining factor, although local union activity can be.

Beating a Dead Horse

I cannot help but think that elected officials in Mississippi are truly beating a dead horse with the passage last week of legislation limiting union activities. The U.S. Bureau of Labor Statistics shows that 3.7 percent of Mississippi workers were union members in 2013, one of the lowest rates in the nation.

If you discounted the service sector, that number would be lower still. But lawmakers get into a tizzy for all sorts of reasons and come up with lame brained, often unnecessary, if not strange laws. Witness Georgia this past week: You better damn well be packin’.

If I am looking at Mississippi for a manufacturing project, rest assured it’s not going to be union activism that is going to scare me off. No, my questions and concerns will primarily focus on workforce development, skill sets, training programs, pipelines for talent, STEM education, that kind of stuff.

Mississippi Gov. Phil Bryant can say what he wants, and he did: “Just to be blunt about it: We just don’t want unions involved in our businesses or our public sector,” Bryant said after signing three bills into law, which become effective July 1. Another state lawmaker called the bills “preemptive” because union activity is already rare in Mississippi.

Truly, truly such comments (and laws) are irrelevant to me. They are much ado about nothing or not much. They may have resonated 20 years ago, but no longer. Now if New York Gov. Andrew Cuomo or California Gov. Jerry Brown said as much, then, yea, I probably would sit up and take notice.

And if Mississippi’s governor and state legislature would pass some preemptive bills to substantially improve vocational and STEM education in that state, I would also sit up and take notice. The same holds true for any number of states.

In short, right-to-work makes for nice window dressing. Far more critical from my standpoint is how states and communities can provide for a highly skilled workforce that man the digitized factories of the future. That is how a place can truly distinguish itself.

Manufacturers want and are in desperate need of self-directed and engaged workers who can collaborate with others and who have math, engineering, computer-based analytical skills and are able to innovate. In essence, they need thinkers.

Communities that are able to produce that kind of workforce will win manufacturing projects of the future, because it is technology that allows us, as a nation, to compete.

Right to work, pshaw. Give me people who can do the work.

I’ll see you down the road.

Dean Barber is the president/CEO of Barber Business Advisors, LLC, a site selection and economic development consulting firm based in Plano, Texas. If your company needs an optimal location for future operations anywhere in North America, we can help. If your community needs to improve its competitive standing, we can help. All requests for information are considered confidential.

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  1. I appreciate the honest take on this topic. As an economic developer in Kentucky I have had site selection consultants tell me that I’m basically out of the picture from the very beginning due to Kentucky not being right to work. But I always felt that couldn’t be the case, it’s nice to read something that steps back and looks at the big picture.

  2. Why is it that the poorest states with the lowest per capita income are the ones with “Right To Work For Less” laws? Is it a coincidence that most are known also for their allegiance and enthusiasm for “the Lost Cause”? Good job Barber.

  3. Thanks for challenging conventional thinking AGAIN. Unions have unfortunately become synonymous with high-cost, unreasonable, and unreliable labor. Right-to-Work is a screening tool used by the unsophisticated and much less relevant today. Communities who can position their labor force as highly-productive, collaborative, and innovative can and do win. Next time, don’t sit so quietly my friend. This is a myth that needs to be busted.

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