Today Ohioans commit an act of self-mutilation

The Ohio economy is a wreck .. and the voters in Ohio are going to make sure it stays that way today.  Not so much the voters who will show up at the polls for today’s election, but the voters who will sit on their butts making excuses as to why they just can’t find the time to go to the polls. 

The issue?  Labor unions.  Unions have been major contributors to Ohio’s failed economy.  Ohio’s new Republican Governor, John Kasich, tried to correct at least part of the problem by promoting and signing legislation that would eliminate collective bargaining for government union workers and requiring these pampered government employee union members to pay 15% of the cost of their health insurance.  The average private sector worker pays 23% of the cost of their insurance, but union members, as you know, are special.  They are way, way above those simpleton private sector workers.  They should make more and pay less for their benefits. 

Collective bargaining for government employee union members?  Let’s see if I can show you why this is such a bad idea.

• Government employee unions put their support behind a specific candidate for, let’s say, the Dayton City Council.  They pour huge amounts of money and volunteers into getting this man elected. 

• The union candidate wins.

• The union contract with the city is set to expire, so the union negotiators start to meet with the city council to hash out a new contract.

• The union makes sure – though the union-backed city council member doesn’t need reminding – that it was union money, volunteers and money that got him elected.  He needs to remember who brought him to the party while the new contract is being negotiated.

• The politician experiences a rare moment of clear thought and starts to wonder aloud why government union members have pension plans that are far better than their private sector counterparts, and why they have better pension benefits and pay less for their superior health insurance policies. 

• The politician is asked how he would like it if the unions threw their support behind his opponent in the next election, and suddenly has a change of heart.

• The new contract is agreed to.  Unions retain their pay and benefits and don’t have to pay any more for their health insurance policies. 

Does this scenario make any sense on any level?  The situation is much different in the private sector.  There the unions don’t chose who they will be negotiating with for a new contract.  The union negotiators represent the union members’ interests, and the team negotiating for the company represents the owners or the shareholders’ interest.  The unions can’t threaten the company’s negotiators with the loss of their job if the unions don’t get what they want.  It’s bad enough that we have unions representing government employees … but to allow them to chose the very people they will be negotiating with is an atrocity. 

So here’s what happened:  Kasich got his new law passed taking away collective bargaining rights from government sector unions.  The new law also eliminates binding arbitration for government employees and eliminates the right to strike.  The Democrats and the unions then poured big bucks into a petition drive to collect 231,000 signatures calling for an election to repeal the law.  That question will be on the ballot today --- and the Democrat Party and the unions have poured literally millions of dollars into a campaign to repeal the measure. 

The unions will, I think, win today --- and Ohio will lose.  Ohio will lose because so many voters who could make a difference will be doing something else instead of voting.

I’m just a fountain of information today … so here is your cast of characters:

Ohio Governor John Kasich.  He is a Republican.  He beat his Democrat opponent by 2% in 2010. 

The Unions.  For the 350,000 government workers in Ohio, asking them to contribute 15% toward their healthcare is an outrage (even though the average private sector workers contributes closer to 23%).  Couple this with the end of collective bargaining and you’ve got a lot of disgruntled government workers with a misplaced sense of entitlement.  Also at work here is the fact that firefighters and police officers are not exempt from this union reform, unlike in Wisconsin’s union reform battle. 

Republicans.  Ohio has a Republican legislature, which is how this reform was able to pass in the first place.  But some Republicans in Ohio are being pressured by the police and firefighter unions, which usually support Republicans.  Their support for the bill is not what you would categorize as unifed.

The outside groups.  We Are Ohio is a group that is backed by the labor unions.  They have raised over $30 million just to campaign for the repeal of this one issue alone.  Compare that to the supporters of SB5, Building a Better Ohio, which raised just $7.6 million.

The ObamaBots.  The Obama for America campaign has been working hard to defeat Issue 2.  They see this vote today as the beginning of Obama’s campaign to win the swing state of Ohio in 2012.  The more union, Democrat sympathy, the better his chances.

The law.  The reason why unions in Ohio may be more successful in repealing labor reform (unlike in Wisconsin) is because the law in Ohio allows them to use state referendums to put issues directly on the ballot.  In Wisconsin, they had to hold recall elections for those who support union reform, but couldn’t vote on union reform itself.

$8 billion.  That’s Ohio’s budget shortfall that the governor is trying to shore up with these labor reforms.

The unions are poised for a victory.  Polling going into today’s vote shows that only 36% of Ohioans will vote to support the union reform law.  Almost 60% say they oppose the law and will vote to repeal it.

People of Ohio: Get a clue.  These labor unions, in both the public and private sector, are a huge, giant drag on your economy.  You want to know why you can’t find a job in Ohio?  Thank the labor unions!  Turns out that businesses don’t want to set up shop in Ohio.  Why?  Because forced unionization is essentially a tax on any business.  Their costs of doing business are increased, thanks to your precious unions.  Here are some facts about businesses and unionization from the Heritage Foundation:

• Research shows that unions directly cause firms to reduce their investments. In fact, investment drops sharply after unions organize a company. One study found that unionizing reduces capital investment by 30 percent--the same effect as a 33 percentage point increase in the corporate tax rate.

• Economists consistently find that unions decrease the number of jobs available in the economy.

• The vast majority of manufacturing jobs lost over the past three decades have been among union members--non-union manufacturing employment has risen: Unionized manufacturing jobs fell by 75 percent between 1977 and 2008. Non-union manufacturing employment increased by 6 percent over that time.

• Widespread unionization delays recovery from economic downturns.

• Studies typically find that unionized companies earn profits between 10 percent and 15 percent lower than those of comparable non-union firms.

• Economic research demonstrates overwhelmingly that unionized firms invest less in both physical capital and intangible R&D than non-union firms do.

• New unionization is associated with at least -10% abnormal returns, equivalent to $40,500 per unionized worker.

It is no wonder that Americans are moving from forced union states (like Ohio) to right-to-work states like Florida or Texas --- and to states with no state income tax.   According to the Cato Institute, from 2000 to 2008, 4.8 million Americans moved from union-shop states to right-to-work states.  The more people leave the state, the less people there are contributing to that state’s economy.  What happens next?  Tax increases!  Ohio also happens to be one of the nine highest income tax states, which explains why from 1998 to 2007 it saw a loss of 1,100 people every day including Sundays and holidays to a state without an income taxes.  Those states that are right-to-work and zero or low income taxes created 89% more jobs than high income tax, union states like Ohio.

Now explain to me again …. why are you going out to support the unions today?