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October 11th, 2010

Gaining Competitive Advantage

By Dr. Sam Clovis

This last week on my radio show I had occasion to interview someone from the Culver campaign about the current governor’s proposal to expand pre-K education to an additional 21,000 four year olds.  What I thought was going to be a quasi-public service announcement turned into a 10 minute screed on how behind-the-times the Branstad campaign was and how forward thinking Governor Culver was.  Of course, there were no answers on affordability, proven models of pre-school education or why the State of Iowa needed to expand its already strapped public education system.  Rather than being rude to the caller, I decided to use this venue to address the not-so-veiled effort on the part of Governor Culver and the leadership of the democrat majorities in the Iowa house and senate to expand membership in public unions, to insult parents across the state and to continue efforts to erode Iowa’s long-standing Right to Work tradition.

Whether we like it or not, states compete with each other for businesses, employees and the revenue generated by those who come to live and work inside the respective jurisdictions.  If one believes the current administration in the White House (and I seldom do), unemployment in the US is a staggering 9.6%.  Some states, of course, have significantly higher unemployment rates but states in our part of the world are less affected, it seems, by upturns or downward trends in the nation’s economy.  Currently, Iowa has an unemployment rate of around 6.8%.

The expanse of Iowa provides a natural bridge between the old iron-belt Midwest and the more prosperous and conservative Plains.  We share common borders with Wisconsin, Illinois, Missouri, Nebraska, South Dakota and Minnesota.  If we examine unemployment in those states, we see that Minnesota, Wisconsin, Illinois and Missouri all have rates above that of Iowa.  Nebraska and South Dakota have rates significantly lower.  What might be a prominent condition allowing Iowa and our western neighbors to hold lower unemployment rates?  One of the factors, among many, is that Iowa, Nebraska and South Dakota are all Right to Work states.  The other states are not.

Right to Work rules allow relief to employees who do not want to join unions, even though the firm by which they are employed may have an existing collective bargaining agreement with its current employees.  In many cases, these non-union employees may benefit from the collective bargaining agreement without having to pay dues to the representing union.  This situation certainly benefits non-union employees, but more importantly, allows employers to keep labor costs down.  By being able to control labor costs, usually the single greatest expenditure in a business firm, businesses in Iowa can maintain a stronger competitive footing compared to companies in our non-Right to Work neighbors.

The Culver administration and the leaders of the democrat majorities in the Iowa house and senate have been at the forefront of eroding Iowa’s slim positive competitive position by introducing pro-organized labor initiatives like Fair Share, Prevailing Wage, Project Labor Agreements and now this expansion of education offerings that will mean an additional 1,500 teachers, hundreds of additional classroom aides and God knows how many more bureaucrats added to the already bloated state public education apparatus.  Add to this the initiatives of the Democrats in Washington, including Tom Harkin, to further erode competitive labor positions (Card Check, First Responder Collective Bargaining, union pension bailouts) and our current governor and his lapdog legislature are on the path to ruining the state just to maintain favor with the special interests represented by organized labor.

The percentage of the Iowa workforce in unions is just a bit below the national average—11.1% versus 12.3%.  This level of unionization in America is far below the 31.8% of the labor force in unions in 1948 and the 23.2% of the labor force in unions as recently as 1980.  Private sector unionization is controlled by market influences so interfering with those market forces, which are exactly what Fair Share and Card Check do, should be avoided at all costs.  If organized labor can gain members competing in the marketplace, then all the better.  However, when government interferes, decides on the winners and losers and diminishes the state’s competitive position, those government leaders need to be replaced.  A more nefarious and dangerous effort comes when government attempts to perpetuate legal money-laundering by expanding government and incenting union membership in the public sector.

Aside from the slap in the face to every parent in the state, the Culver expanded pre-K education initiative is nothing more than a way to expand membership in teacher unions in the state and effectively take tax payer dollars and put that money into democrat campaign coffers.  No one is fooled by this “for the children” ploy.

Fully 33% of the public sector employees in Iowa belong to unions.  This rate, three times that of the private sector, ought to give legislators and elected officials pause.  Between 1989 and 2010, unions in the US contributed $544 million to political campaigns.  Of the top 15 contributing entities (companies, organizations, etc.), nine were unions.  Of the $544 million, 94% went to democrats and a little over 5% to republicans.  Among public sector unions, the percentages were about the same.  However, education sector unions gave 96% to democrats and less than 4% to republicans.

Iowa’s competitive position is being damaged by the current administration and the democrat majorities in the Iowa house and senate.  Along with tax and immigration reform, the next administration and legislature must take a hard look at diminishing the impact of organized labor in the public sector and allowing market forces to work on organized labor in the private sector.  Making Iowa more competitive, particularly with our neighbors to the west, is doing what is best for the state and its citizens.  This change for the good will not occur, however, if democrats maintain control of the legislature and continue residence in the Governor’s mansion.  Get out the vote on November 2.

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About the Author

Sam Clovis
Sam Clovis is college professor, retired Air Force fighter pilot and former radio talk show host. He has been active in republican politics in Iowa for quite some time and is a highly visible and outspoken conservative. He has run for office in Iowa and remains a popular conservative figure.

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