As Indiana legislators move closer to passing a “right-to-work” law, consider Muncie’s omen.
This can be the fate wrought by Republicans’ race to unhitch union strength in their state through “right-to-work” legislation, which allows workers to enjoy union bargaining benefits without paying dues to the union.
Here’s why: Like much of blue-collar Indiana, Muncie thrived in the good times. Good-paying factory-collar jobs — union jobs — brought good middle-class living. Then came the industrial tsunami, shutting out the lights in factories across Indiana, including those in Muncie.
From more than 57,500 jobs in 2000, the number has kept falling until it hit about 49,300 recently, a drop of about 9,400 jobs in Muncie. So folks in Muncie were thrilled when giant Caterpillar Inc., the world’s largest manufacturer of earth-moving equipment, opened a plant last year to build diesel locomotives. The pay isn’t great. But nowadays, a job is a job.
The plant is owned by Progress Rail Services Corp., a wholly owned subsidiary of Caterpillar. The company has another locomotive plant in London, Ontario.
But the workers at that plant were ushered out of the plant by Caterpillar on Jan. 1 when the company declared a lockout. The company said the union had threatened a strike and then called off a strike and so it had no choice because of the workplace uncertainty but to kick the workers off their jobs.
The Canadian Auto Workers union, which represents the 465-laid off workers in Ontario, said that the company wanted to cut workers’ wages in half, dramatically trim benefits and kill the workers’ pension plan, according to The New York Times.
The Canadian workers earn about $30 an hour and the Muncie workers, according to the Muncie Star-Press, reportedly earn between $12.50 to $14.50 an hour under a UAW contract. (Full disclosure: the UAW is an In These Times sponsor.)
Given the deep gap in wages and Caterpillar’s history as a tough, no-holds-barred employer, the folks in Muncie began looking over their shoulders, and wondering, according to news reports, if they are going to be the spoilers for their union brethren in Canada.
Remember, this is the highly profitable Peoria-based company that has repeatedly thumped its UAW workers. After a series of running conflicts in the 1990s, it forced the union to accept two-tier wages and a dramatic end to the kind of contracts that put many solidly in the middle class.
Its mantra since taking on the UAW in the U.S. heartland is that it is a global company that needs to make itself a world competitor.
Translation: it will drive down wages and benefits in the countries paying good wages because it has the power to do so and, if needed, send the work to its factories around the world where life is much cheaper.
Why is this an omen for Indiana?
Because the reality for workers in right-to-work states is one of lower wages, lower benefits and no escalator to get them out of their rut.
As one economist was quoted in an excellent Bloomberg story about the economic prospects for Indiana from the right-to-work drive,
Morton Marcus, an economist and former director of the Indiana Business Research Center, said if Indiana becomes a right-to-work state, it would “create a sinkhole between Ohio and Illinois, Michigan and Kentucky.”
Likewise, consider this article from The Nation magazine.
What’s missing from the Republicans oratory is a simple lesson in Indiana’s economic history. Hoosiers led good lives for years because they built cars, or made steel or made the kinds of things needed by the auto and steel plants. And, they earned union wages.
When the Japanese automakers came to Indiana, they didn’t undercut the UAW’s wages, but matched them because they wanted to keep the union out.
But in a right-to-work, state companies don’t have to plot or hide their wage-cutting strategies because that’s part of the game plan. It’s the reason they pick up and find new places to earn their profits.
It’s the reason why, for example, textile companies abandoned the North for the South, and then, when things looked even cheaper elsewhere, picked up and moved overseas.
And it will be the reason why workers in Muncie and elsewhere in Indiana, workers who deeply miss the days of secure, decent-paying jobs, might cringe one day knowing that they are taking someone else’s job.
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A former labor writer for the Chicago Tribune, Stephen Franklin is a Pulitzer Prize finalist and an adjunct professor at the University of Illinois Urbana-Champaign School of Labor and Employment Relations.
