I would add the workman's comp system, which is a real mess.  It finally got reformed, and the unions pushed an initiative through that unreformed it.  :oops:

 

Texas v. Ohio

March 3, 2008; Page A16 (Wall Street Journal)

 

As Barack Obama and Hillary Clinton race around Ohio and Texas for tomorrow's primaries, they are telling a tale of economic woe. Yet the real story isn't how similar the two states are economically but how different. Texas has been prospering while Ohio lags, and the reasons are instructive about what works and what doesn't in economic policy.

 

There's no doubt times are tough in Ohio. The state has lost 200,000 manufacturing jobs since 2000, home foreclosures are soaring, and real family income is lower now than in 2000. Meanwhile, the Texas economy has boomed since 2004, with nearly twice the rate of new job creation as the rest of the nation. The nearby table compares the states over a decade or so.

 

 

Somehow, I do not believe the accuracy of this article or it doesn't paint the full picture. With the exception of the GM plant, most of the jobs discussed in the article are from high-tech industries for which Texas is well known for and has been for some many years. Yea, maybe GM has built a new plant there, but the fact is, GM has built over 50 new parts plants in Mexico, some of which were located in Ohio and Michigan at one time or another. Many of these plants are just across the border of Texas. I can't help to think that had a lot to do with building of this new Texas plant.

 

As for the unions, last time I checked, Unions are in every state, not just Ohio. American Axle and Manufacturing Holdings is currently on strike based out of Michigan and New York which is causing many plant shutdowns across the country.

^I agree with your first paragraph, but you're off point in the second paragraph. Unions do hurt Ohio's competitiveness. We have a much larger union presence here that hurts productivity and increases costs for businesses.

Unions might be in every state but aren't as historied, have such large membership nor do they play such a large roll in everyday life as they do in Ohio, Michigan, W. Va & PA.  Also some of the tax codes in places like Texas, NM, AZ make doing business there a bit easier.

Unions do hurt Ohio's competitiveness. We have a much larger union presence here that hurts productivity and increases costs for businesses.

 

Agreed.  Unions passed the threshold a long time ago when they extracted wages/benefits from companies that outstripped their productivity. 

Everyone's fine so far, but There will be no versus bashing between the two states.

 

 

Unions might be in every state but aren't as historied, have such large membership nor do they play such a large roll in everyday life as they do in Ohio, Michigan, W. Va & PA.  Also some of the tax codes in places like Texas, NM, AZ make doing business there a bit easier.

 

Where unions are concerned, the point wasn't so much the presence of unions as the "closed shop" where membership is required.  It's also very difficult to decertify a union that has lost touch with its membership.  For one thing, the union can retaliate against members that attempt decertification.  Potentially it can even get them fired.

 

I would say that very few private sector unions force anti-competitive "work rules" on employers any more.  Indeed, in many plants, particularly those where the ultimate decision makers are offsite, they serve a valuable role.

 

But it is true that many foreign companies won't locate in a "closed shop" state.

How does a state like Texas get by without an income tax?  What do they use to make up that income?  Higher Sales Tax?  Or is there something else that they use?

 

I guess the real questions is, if other states benefit so much from having no income tax or more economically friendly tax laws, who or what is keeping Ohio from changing our system?  There has to be pros and cons to both systems...what pro is keeping us in our tax model (or what con is keeping us away from their tax model)?  Is it just fear of politicians to change the system?

The public services are horrendous in Texas.

^I don't know anything about the 'closed shop' but I find it hard to believe that 1) this type of situation is legal and 2) that Texas and Ohio don't have similar union laws.  The idea that unions in any form destroy investment can not be serious.  Houston has to be a huge union town.  It's one of the largest ports in the country, and I'd be surprised if every job associated with the port in any way wasn't unionized.  Why would Las Vegas be booming if that were the case?  Or Los Angeles, which has to be one of the largest union towns in America.  I think there is even a producer's union in the movie industry, which seems absurd to me (since the producer would by definition be the person who is capitalizing the movie, and therefore the ultimate boss) but I suspect it refers to middle-management producers, not the studio executives.  Anyway I'd like to see more details about the supposed closed shop problem before I give this article any undue credit.

 

But one thing is for certain- Texas doesn't have an income tax.  Now, it doesn't have an income tax because it has (or had) huge amounts of natural resources, namely oil, and this combined with incredibly crappy public infrastructure, allows it to forgo the income tax (the U.S. universities with the four largest endowments in the U.S. are: 1) Harvard, 2) Yale, 3) UT-Austin, 4) Princeton).  Add to this mix the fact that before the 30s Texas was a total and utter shithole, and guys like John Nance Garner, Sam Rayburn, and Lyndon Johnson got shit tons of federal money for projects in Texas when Texans were Democrats and the Democrats were in charge, and guys like Dick Armey and Tom DeLay more likely than not did the same when the Republicans came to power, and you can see how they've milked the productive parts of the country for much of the twentieth century and now that we're down, they say (and I realize this was an article from the WSJ) that it's the our (the Midwest's) fault.

 

One more thing.  Texas has direct access to the largest origin country for immigrants, legal and illegal.  That probably helps their economy a bit.  And by 'a bit' I mean, a shit ton.

State labor laws are all over the map. Texas is a 'right to work' state, which sharply reduces union power compared to places like Ohio which gives union greater power once it organizes a labor force.

 

Ohio has one a high level of unionized labor at 14% while Texas is at about 4%. Even though Texas is much larger than Ohio, it has 1/2 the number of unionized workers.

 

See http://www.aflcio.org/joinaunion/why/uniondifference/uniondiff16.cfm

  I think there is even a producer's union in the movie industry, which seems absurd to me (since the producer would by definition be the person who is capitalizing the movie, and therefore the ultimate boss) but I suspect it refers to middle-management producers, not the studio executives. 

 

 

i think you are correct. this is just as an aside, but its funny you mention that because for sure there is a movie producer's guild. my spouse is a member (a job perk, no she isnt a movie producer!). so we get to attend free upcoming movie screenings/lectures and stuff thru the guild. i just go to the free events, i dont know all they do -- so i am not sure if thats the same thing as a real union:

http://www.producersguild.org/pg/

 

edit: come to think of it here is an old uo thread from a producer's guild event:

http://www.urbanohio.com/forum2/index.php/topic,10911.0.html

  I think there is even a producer's union in the movie industry, which seems absurd to me (since the producer would by definition be the person who is capitalizing the movie, and therefore the ultimate boss) but I suspect it refers to middle-management producers, not the studio executives. 

 

 

i think you are correct. this is just as an aside, but its funny you mention that because for sure there is a movie producer's guild. my spouse is a member (a job perk, no she isnt a movie producer!). so we get to attend free upcoming movie screenings/lectures and stuff thru the guild. i just go to the free events, i dont know all they do -- so i am not sure if thats the same thing as a real union:

http://www.producersguild.org/pg/

 

edit: come to think of it here is an old uo thread from a producer's guild event:

http://www.urbanohio.com/forum2/index.php/topic,10911.0.html

 

Off topic but the "guild" hands those out like water.  lol  back on topic

you'd never know not that many members attend guild events, even tho most of them are fun or interesting like that example -- so even i get to go (im not a member). sure beats the afl-cio or afsme.

you'd never know not that many members attend guild events, even tho most of them are fun or interesting like that example -- so even i get to go (im not a member). sure beats the afl-cio or afsme.

hey it's away to see the movie, special or go to speaking engages FREE.  Same thing with airlines (I got to ride on the BA concord the week before its last flight...for $0.00 - normally $12k!)

This is a great article, I'm depressed there hasn't been more talk about it...unless there's a lot of tacit agreement.  *the article isn't completely fair as there are major differences between the states...but important to understand nonetheless.

So, in states with no income tax, doesn't sales tax replace (for a large share) the lost revenue within the state?  You pay less to make a living within the state, but pay more to "live" within the state theoretically.

^ nope, generally texas just has reduced public services so in some sense revenue is not really needed. they also do other stuff to raise money, like for example the state is currently on a (ridiculous) massive toll road building kick.

 

fwiw here is texas state sales tax info. the link said combined state/city taxes cannot exceed 8 1/4% total:

 

Rates

 

State - 6 1/4% (.0625)

 

City - 1/4% (.0025) - 2% (.02), depending on local rate.

 

County - 1/2% (.005) - 1.5% (.015), depending on local rate.

 

Transit - 1/4 % (.0025) - 1% (.01), depending on local rate.

 

Special Purpose Districts - 1/8% (.00125) - 2% (.02), depending on local rate.

 

This may be a dumb question, but how is "required union membership" when you get a job in a "closed shop" legal?

 

Of all the deductions from a paycheck, how are union dues defended legally? Taxes are legally empowered by the Constitution, and you (at least in theory) can rescind them by popular referendum or by asking your elected lawmaker to submit legislation. Your retirement contributions are elective. You can have your own if you like, or participate one jointly with your employer.

 

But where is the legal foundation for forced payments of union dues and membership in a union?

^ as far as i am familiar with in these situations you are not required to be a union member, but you are to pay union dues. this is empowered by the union in its periodic contracts with the company. so that's the legality. often tons of lawyers are involved.

 

i'm not sure of the exact legality of unions to represent workers other than the right to unionize in and of itself is likely based on case law and the long history of unionism (there could be some major case or single law -- i dont know).

 

also, union benefits like added healthcare, representation, etc. are supposed to outweigh the paycheck fees. the member vs non-member fees are typically very close, so additionally that encourages joining the union.

 

^

...the modern legal basis is the Wagner Act and the Taft-Hartley Act.

 

Prior to that management had a pretty free hand to stamp out unions.  I posted a bit on the union history of Dayton but I think most of the posters here tuned that out given the anti-union bias on this board.

 

 

 

 

^I agree with your first paragraph, but you're off point in the second paragraph. Unions do hurt Ohio's competitiveness. We have a much larger union presence here that hurts productivity and increases costs for businesses.

 

Too many people love to bash unions. Often they are an easy target because they do a lot fo stupid things. But you seldom see the viewpoint that multimillion-dollar CEO and other executive salaries damage U.S. competitiveness, hurt productivity and increase the cost of business. Aside from the the fact that the gargantuan disparity between worker and executive compensation are obscene and immoral, they are stupid business. You could cut CEO salaries in half and you'd still have very wealthy executives, plus cheaper, more-competitive products.

Now, it doesn't have an income tax because it has (or had) huge amounts of natural resources, namely oil, and this combined with incredibly crappy public infrastructure,

 

I saw a few comments in regards to this and I have to say, from my experience with living in Dallas for 5.5 years, this wasn't the case.  Now living in Cleveland proper, public infrastructure and services are worse than anything I ever saw in Dallas. 

 

For one, it doesn't snow so that's big difference - snow plowing is expensive as is the damage winter does to raods.  Public construction projects were completed in significantly less time.  Granted it's easier to work year round but I see some rather simple construction jobs in North East Ohio (street repaving, sidewalk repair, etc) take forever to finish around here whereas in Texas, construction crews were incented to get the job done ahead of schedule.  The 635/75 interchange (high five interchange - google it) was an extensive project completed in 3 years.  I have no idea what they are doing at 480/77 but it doesn't seem to be adding lanes or reconfiguring the interchange at all yet it seems to be dragging on forever.

 

Secondly, at least in Dallas, there are a lot of toll roads.  One major north/south highway is simply called "The Tollway" and there is also the outer-outer-belt - George Bush Turnpike.  Plus other services are privatized, like trash pick-up, which you have to pay for out of pocket.

 

There are difference is public services, but I wouldn't say they are worse.  Compared to the more upper class suburbs, they might not be on par, but comapred to Cleveland they are better.

Secondly, at least in Dallas, there are a lot of toll roads.  One major north/south highway is simply called "The Tollway" and there is also the outer-outer-belt - George Bush Turnpike.  Plus other services are privatized, like trash pick-up, which you have to pay for out of pocket.

 

There are difference is public services, but I wouldn't say they are worse.  Compared to the more upper class suburbs, they might not be on par, but comapred to Cleveland they are better.

 

Well, Dallas as a large city is certainly newer than Cleveland, so perhaps that is one reason you found Dallas to have better physical infrastructure.

 

I'm not particularly familiar with Cleveland or Dallas, or Texas at all for that matter.  I've transferred in DFW Airport twice, that represents the total amount of time I've spent in Texas.  Nevertheless, since we are all pontificating here and no one is really going about checking statistics when we make these comparisons, the best we have to go on is comparison by analogy. 

 

Texas is a southern state, and southern states typically score lower nationwide and spend less money on education, mental health, and other types of public services than Midwestern states.  Typically it is items such as healthcare and education that states spend most of their revenue on.  Texas is a border state, and therefore benefits from closer access to cheaper labor (illegal labor whose money is probably not coincidentally more easily captured through a sales tax rather than an income tax, where it would go unreported); it is closer to newer, emerging markets (such as Mexico, Brazil and China) than Ohio; and it has had much greater prominence in national political leadership than Ohio has since the New Deal (John Nance Garner, Sam Rayburn and Lyndon Johnson for the Democrats, the two Bushes, Dick Armey and Tom DeLay for the Republicans).  Only recently, probably since the late sixties or seventies did Texas switch over from the majority of southern states and begin paying more in federal taxes than they received in federal spending.

 

Texas probably makes building toll roads a priority since it helps encourage suburbanization, which expands their property tax revenue as well as what I assume was a thriving and highly profitable home-building sector which more likely than not employed far more illegal aliens than the home-building sector in Ohio, for example.

 

 

Building toll roads encourages suburbanization which expands the property-tax base. But that's not such a good strategy. While the tax base may be increased, does it increase enough to cover the cost of services to those newly developed areas? Residential development typically requires more in services than it generates in taxes.

To combat sprawl we need real land-use reform like that of Oregon (which if you study it was led by conservative farmers and rural Republicans).  There's a lot of shared causes between urban Dems and rural Repubs.

Building toll roads encourages suburbanization which expands the property-tax base. But that's not such a good strategy. While the tax base may be increased, does it increase enough to cover the cost of services to those newly developed areas? Residential development typically requires more in services than it generates in taxes.

 

Well, suburbanization includes the suburbanizing of businesses as well.  I don't really know all the details, but obviously it has to work well for someone (at least in the short term) because it is happening everywhere while much urban property lies fallow.

True, but the suburban development was subsidized by federal and state highway spending, federal aid for water and sewer systems, mortgage interest deductions on residential property and, for commercial property, developer-friendly depreciation policy in federal tax laws. And now it's catching up, as state, county and local governments across the nation have tight budgets. Our patterns of development over the last 60 years add to the size and cost of government.

^Agreed, and the people who drive the current pattern of development use a certain formula that works with post-WWII laws and governmental priorities.

Building toll roads encourages suburbanization which expands the property-tax base. But that's not such a good strategy. While the tax base may be increased, does it increase enough to cover the cost of services to those newly developed areas? Residential development typically requires more in services than it generates in taxes.

 

Texas is certainly the definition of a monster sprawl grid.  In Dallas, pretty much all roads are 4 or 6 lanes with 8 lane highways everywhere.  It doesn't matter what actual suburb you are in; you can't really tell them apart.  Every corner has a strip mall; there's pretty much any type of store you might need anywhere.  Not to mention the "access road" - the feeder roads onto the highway that are also home to stripmalls, etc.  I think for several years in a row a North Dallas suburb was the fastest growing city in the US...Plano, Frisco, McKinney, etc.  Growth was clearly noticeable along the highways and new highways were being built while others were extended.

 

Well, suburbanization includes the suburbanizing of businesses as well.  I don't really know all the details, but obviously it has to work well for someone (at least in the short term) because it is happening everywhere while much urban property lies fallow.

 

That's exactly right.  There are a lot of major corporations headquarterd in Dallas, many of which are not located in the City of Dallas.  The cities of Plano and Richardson spent a lot of money advertising in California newspapers in the early and mid 90's for Silicon Valley companies to relocate their headquarters to their more attractive business environment and it worked.  Many large technology firms have a substantial presence in Dallas suburbs, not to mention Frito Lay, Mary Kay, Yum Brands (Pizza Hut/Taco Bell, etc), Blockbuster, American Airlines, etc.  So there are a lot of smaller city centers scattered thoughout the Metroplex.

^

...the modern legal basis is the Wagner Act and the Taft-Hartley Act.

 

Prior to that management had a pretty free hand to stamp out unions.  I posted a bit on the union history of Dayton but I think most of the posters here tuned that out given the anti-union bias on this board.

 

 

ah thank you jeffery. of course! the wagner & taft-hartleys acts.

 

personally, growing up in a company town i am very pro-union. however, that's good for about 50 yrs or so -- lets's also  not forget unions do exist in a cycle and for long-lived companies unions eventually become corrupt and more harm than good (ie., afl-cio, u.s. steel).

 

^

Taking a hard look at the history, in the long-term management always wins.  The difference with the postwar era was that the unions had a longish period of sucess  (late 1930s to the 1970s) before "labor discipline" was enforced.

 

It will probably prove that this era was a historic exception to the larger pattern of brief union victory then a management clampdown.

 

yes. since the 80's the labor discipline you speak of became enforced because both unions and management lost their way in the burdgeoning global economy.

 

rather sad for labor that the only unions with any real teeth anymore are the late-bloomer unions for public employees.

yes. since the 80's the labor discipline you speak of became enforced because both unions and management lost their way in the burdgeoning global economy.

 

rather sad for labor that the only unions with any real teeth anymore are the late-bloomer unions for public employees.

 

In industry (hr consulting), unions still carry a lot of weight.

Before globalization we saw the phenomenon writ-small in the US with companys relocating to the South to avoid unions and get lower labor costs.  I think this started in the 1920s with the textile industry, but really took off much later when the CIO failed to organize Southern industry.

 

So in a sense the test-drive for offshoring production happened within the US. 

You can add the suburbanization of retail to the anti-union list. Most downtown department stores unionized in the WWII era, but once the stores started to open in the 'burbs, the companies made sure that the workers didn't unionize (mostly by relying on suburban mothers who took part time jobs when their kids were in school).

I think the suburbs are much harder for unions, as they make public protest difficult and relatively ineffective due to their layout, their paucity of public space, and the auto dependence.

So how does Ohio compete as a Union-heavy state?  Can it?  Does Ohio rely on foreign (non-unionized) companies like Toyota?

 

"One reason that General Motors has been losing market share for years -- going from selling about half the cars in the country to selling about one quarter today -- is that its union contracts put them at a disadvantage compared to its Japanese competitors.

 

Even though Toyota has factories in the United States, the American employees in those factories vote to keep their jobs by staying non-union."

http://www.capmag.com/article.asp?ID=4590

rather sad for labor that the only unions with any real teeth anymore are the late-bloomer unions for public employees.

 

And the only reason these unions have 'real teeth' is because you can't outsource their jobs to another region or country.  And since the 'management' of public corporations are elected officials who typically face term limits, you don't see them fighting to keep the unions from getting these long-term legacy costs that have been part (and I emphasize, only part) of the reason for the decline of the American manufacturing sector.

^ not sure what you mean there -- public employee unions are relatively new and have nothing to do with the decline of the american manufacturing sectors. that was brought on by modernization of industry, outsourcing and especially by the globalization of capitalism.

 

good stuff here -- you guys are nailing it.

 

i guess the question is, what can we do about it? the internet aside, i can't imagine the usa can continue to invent itself out of this predicament. the service industry does not pay what manufacturing did. i dk where that leaves union culture either, or what's left of it. i suppose we're veering off topic here toward one that belongs on another thread.

 

"One reason that General Motors has been losing market share for years -- going from selling about half the cars in the country to selling about one quarter today -- is that its union contracts put them at a disadvantage compared to its Japanese competitors.

 

 

Another reason is putting too many of its eggs in the SUV basket -- which brought short-term easy gain that has turned to gas-price pain -- and failing to re-tool to make more-sustainable cars.

 

I'm not so much pro-union as I am anti-management. American companies would be more competitive if they drastically slashed CEO and other executive salaries. That would save hundreds of millions of dollars in some corporations and also save a lot of American jobs.

 

"One reason that General Motors has been losing market share for years -- going from selling about half the cars in the country to selling about one quarter today -- is that its union contracts put them at a disadvantage compared to its Japanese competitors.

 

 

Another reason is putting too many of its eggs in the SUV basket -- which brought short-term easy gain that has turned to gas-price pain -- and failing to re-tool to make more-sustainable cars.

 

I'm not so much pro-union as I am anti-management. American companies would be more competitive if they drastically slashed CEO and other executive salaries. That would save hundreds of millions of dollars in some corporations and also save a lot of American jobs.

 

Whooooooa there.  Wait a minute now!  Not all executives are greedy, bad or overpaid - for what they do.

I don't know that they're greedy, but the executives of major U.S. corporations are overpaid compared to their counterparts in other countries and in comparison their real value. I'm primarily thinking of those who make tens of millions of dollars a year. I don't think there's any way to justify that in a country with rising unemployment and serious economic problems.

So how does Ohio compete as a Union-heavy state?  Can it?  Does Ohio rely on foreign (non-unionized) companies like Toyota?

 

..or like Honda and (here in the Dayton area) Hammelman and Motoman

 

As of the late 1990s, say 10 years ago, around 20%-25% of Ohios manufacturing workforce was unionized. This means 75% was non-union.

 

The unionized % has probably dropped, so I suspect unions are not that much a player as they once were.  Ohio did manage to retain Honda, which is non-union, plus a number of smaller foreign manufacturers. 

 

By nowadays, the basics of globalization...extremley low wages (relative to the US) and minimal regulation is what is causing plant closure...even if the plant is non-union.

 

Yet its a good question as to how this is really working.  In many cases (like in my Honda example) manufacturing stays stateside.  So there are exceptions.

 

 

 

 

Semi-unfortunately, the new Civic plant ended up in Indiana rather than Ohio. It is still close enough to benefit plenty of Ohio manufacturers.

^

yeah, there is quite a spin-off of suppliers for these plants.  I think I posted some maps of that at one time, based on the Toyota plant in KY.