Controversial U.S. 'right to work' laws could affect Hamilton, city says

The city has a sneaking suspicion that controversial 'right to work' laws in the U.S. are going to start affecting Hamilton, according to the head of economic development.
Protesters hold a silent protest in Lansing, Mich., Wednesday, Dec. 12, 2012, a day after right to work legislation was enacted in the state. Officials in Hamilton say they worry those laws could start affecting Hamilton in the future. (Carlos Osorio/Canadian Press)

The city has a sneaking suspicion that right to work laws in the U.S. are going to start affecting Hamilton, according to the head of economic development.

"It hasn't had a pronounced effect on Hamilton yet, but my suspicion is that it will in the years ahead," said Neil Everson, Hamilton's director of planning and economic development.

Right to work laws ban requirements that non-union employees pay unions for negotiating contracts and other services.  Supporters say they will give workers more choice and boost economic growth, but critics say the real intent is to weaken organized labour by bleeding unions of money needed to bargain effectively with management.

Indiana and Michigan became the latest states to pass right to work laws last year.

"When we look at traditional rust belt states where most of the manufacturing occurs, with Indiana and Michigan going, if Ohio and Pennsylvania follow suit, there is going to be a huge wage differential between Ontario and our neighbours to the south," Everson said.

"It's going to be harder to compete for new manufacturing and harder to retain existing manufacturing."

Energy prices are already lower stateside, and lower wages brought about by right to work laws give those states a considerable advantage, Everson says. According to the U.S Bureau of Economic Analysis, factory jobs pay on average 7.4 per cent less in right to work states, and employer sponsored pensions are 4.8 per cent lower.

That said, manufacturing employment has grown 4.5 per cent in right to work states in the last three years compared to 3 per cent in non-right to work states.

Siemens was one of the biggest companies to move out of Hamilton in recent years back in 2011. The Siemens plant had been open for decades, but was lured to North Carolina — a right to work state — with an attractive incentive package by the state government.

"That was 550 well paying jobs right here in Hamilton that left. Very skilled labour," Everson said.

He says there was more to that deal than just right to work and lower wages — the $157 million incentive package offered by the state government was one that Ontario just couldn't match.

"But business is the path of least resistance," Everson said. "Obviously they're there to make money, and so they have to look at all of their costs, and wages are one of the factors."

'Disappearing jobs'

Unions in Hamilton are wary of right to work legislation. Dave Reston, the president of the CAW 504 local, told CBC Hamilton it's a big worry.

"As a union, we're always concerned about right to work," he said. But it's not just a Hamilton issue, he added. "Look at any city, and you'll see manufacturing jobs disappearing," he said.

"The more states in the south that bring in right to work, and you'll see lesser standards."

But John Mortimer, president of the non-profit Canadian LabourWatch Association, says right to work laws better reflect what workers really want. LabourWatch's  mandate is to help employees make informed choices about unionization and be able to access Labour Board processes and forms when they don't wish to become or remain unionized.

"Time is on the side of worker choice," Mortimer said. "Union leaders are out of touch with the rank and file."

A divisive issue

Wayne Lewchuk, a McMaster University professor of labour studies, says the city is casting a cautious eye to right to work laws because it's a hot button issue — as are both sides of the debate.

"People that are against unions jump on that sort of thing," he said.

Lewchuk says that it's "appropriate to be worried," because some U.S. states have offered companies huge incentive packages like the one that was given to Siemens. "But it could easily be blown out of proportion," he said.

He says that people should be aware that the decision to move a plant isn't a knee jerk one — and while right to work can be a factor, it certainly isn't the only one.

"Companies don't make billion dollar decisions just to go to a place without unions."

This is a part in a series of stories about unions in the 21st century from CBC Hamilton — all leading up to our Labour Pains: Do Unions Still Matter? Town hall on Tuesday, April 23.

Join CBC Hamilton at Mohawk College's McIntyre Performing Arts Centre for a discussion and live webcast on the state of unions in Ontario and Canada, hosted by Brent Bambury, of CBC Radio's Day 6. Tune in on Tuesday, April 23 from 7:30 p.m. – 9 p.m.