Yesterday, Michigan Governor Rick Snyder (R) signed two “right-to-work” bills into law that will have far reaching effects in one of America’s most unionized states. Michigan joins Indiana as the only two states that have joined the right-to-work fraternity in the past decade.

Contrary to popular belief, right-to-work does not abolish unions or prohibit them from engaging in the collective bargaining process. Right-to-work simply means that an employee does not have to join the union or pay dues for the union to bargain for them as a condition of employment. In right-to-work states any worker who chooses to join a union is free to do.

The Union Point of View

One of the problems, from the union’s point of view, is that nonpaying union members receive the same workplace benefits as those who choose to support the union by joining and paying dues. The unions consider this type of action, “freeloading.” Unions also feel that there are specific groups that need the help of a union because they are historically underpaid in their chosen professions. Teachers, nurses, policeman and fireman are groups that have similar jobs in every state and can band together for better compensation, pensions and healthcare. Although police and fire are often exempted because it would endanger public safety if your local fireman or police went out on strike and would not show up when you called.

In the case of Michigan, one of the most well known unions is the very powerful United Auto Workers started in 1935 in Detroit. Due to government legislation of such laws as Wage & Hour Laws, Occupational, Safety, and Health Administration, O.S.H.A., American’s Disabilities Act, A.D.A., and discrimination laws protected workers by law rather than by a bargaining agreement. This put pressure on the unions to produce better benefits, pensions and healthcare plans for their membership.

The Non-Union Point of View

This law will not affect any union members, who are currently under a collective bargaining contract in Michigan. They will still pay dues to the union as the contract they agreed to states until that contract expires. Then they are free to decide if union representation will be of benefit to them or not. Either way they cannot be fired for either joining or not joining the union.

Union negotiators often made deals for huge payments down the road rather than large increases in salaries. Pension plans, and healthcare benefits are often costs that from a bookkeeping standpoint are not as harmful to the current business cash flow. However, when Ford, GM and Chrysler were the only game in town they took a major hit from Honda and Toyota that located in right-to-work states paying at or above the same salaries UAW members were making but without the burden of massive healthcare and pension plans. They made better cars and sold them for less than the big three hampered by the weight of union contracts.

The Hostess Story

As Paul Harvey might say, “Here’s the rest of the story.” No question that Hostess management did a poor job of keeping the 82-year old company running smoothly. But the unions are hardly blameless in the Hostess bankruptcy. Here are some things you might now know about the big Twinkie Takedown.

Take a minute and put yourself behind the CEO’s desk at Hostess. What do you have to deal with? In Hostess’ bankruptcy filing they detailed, $52 million in worker’s comp claims, 372 collective bargaining agreements that required 80 individual health and benefit plans and 40 pension plans and a $31 million increase in wages, healthcare and other benefits for their fiscal year of 2012. Otherwise we’re going on strike.

Had enough? Actually we’re just getting started. Under the union contract workers could not load Twinkies and Wonder Bread on the same truck. You had to take two trucks to the same delivery location — one for each product. Workers who loaded Wonder Bread could not load Twinkies. Did I mention the drivers were not allowed to load or unload their own trucks? Nope, another employee would have to drive to the delivery location to unload the truck and move the product to the shelves. My question is, “How did they stay in business 82 years agreeing to this?”

Some Final Thoughts

If you had asked me a year ago, “What states do you think have the best chance of becoming right-to-work states?” — Michigan would have been last on my list. That state is literally the bedrock of unionism. Unions were born in Michigan. The new battle cry of the right-to-work groups has got to be, “If we can do it in Michigan; we can do it anywhere.”

However, in my opinion, there is an even bigger story here than just this law. On my Saturday show I have been preaching about how much difference can be made at the state level instead of the national level in elections. Here’s the proof. This legislation is monumental. It’s the equivalent of the KKK catering a Jewish Bar Mitzvah. It’s wolves and sheep sharing a sleeping bag. It defies logic. But it’s a done deal. Even the president couldn’t stop it. Will this be the last state for another ten years or is this the first domino? Only time will tell.

I have an interview scheduled with a representative of the National Right To Work Foundation at 7:35 AM on Friday 12/14/12. Listen Live online here.

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