Steve Harry: Union's policies have put Michigan in bind
Michigan's economic troubles are not due to high state taxes, as the Republicans would have us believe.
State and local taxes as a percentage of personal income are below the national average. Business taxes alone are also well below the national average.
The reason Michigan has lost 79,000 auto and auto parts manufacturing jobs in the last 10 years is that the United Auto Workers is strangling our auto industry.
The union's success in contract negotiations has pushed labor costs so high that the Big Three U.S. automakers can no longer compete with foreign manufacturers. In the last 40 years, the Big Three's share of the U.S. market has dropped from nearly 100 percent to 58 percent.
At General Motors, the average hourly salary for non-skilled assembly line workers is $31.35 per hour, which comes to $65,208 per year. On top of that, workers get health insurance and pensions. They get this all this even when they are laid off.
This is outrageous when there are more than 318,000 unemployed workers in Michigan. I suspect that most them would be happy to work at GM (or Ford, or Daimler-Chrysler) for half the pay current UAW workers are getting. (Just recently, 1,000 people applied for jobs paying as little as $6 per hour at a new Meijer store in Fruitport.)
With lower labor costs, the U.S. automakers could cut prices and sell more cars, which would require them to hire more workers, reducing the number of unemployed and increasing state tax revenues.
Economic diversification and high tech are fine, but Michigan does not have to give up on manufacturing. People are still buying cars.
We just have to figure out how to loosen the UAW's death grip on the auto industry.
We need someone to speak up for the unemployed - someone to make the case for an open labor market.
That's not likely to be the Democrats, since they get big financial support from unions.
Republicans aren't saying anything because they are using the economic crisis to justify tax cuts and reductions in services to the poor.
Big Three executives are afraid to antagonize the UAW because they know a strike could drive them into bankruptcy.Is the situation as hopeless as it seems?