Is California On Its Way To Higher Poverty Rates And Lower Wages?

There is a sneaky initiative moving toward the ballots in California that would put California on its way to higher poverty rates and lower wages. Nicknamed “The Stop Special Interest Money Now Act,” this initiative could increase the number of uninsured workers, double the wage gap, and cut your annual income by almost $6,000.

This initiative also known as the “Payroll Deduction Initiative” would do those things by putting California on a path to becoming a right to work (RTW) state, that is, a state that limits unions and collective bargaining.

RTW states are also most often states with higher poverty levels, lower wages, lower GDP and higher construction fatalities. For women in particular the wage gap in right to work states (over 20%) are close to double that of non-right to work states (12%).

Here is what Californians (and many of the other states with bills in the pipeline that would restrict collective bargaining) can look forward to losing if the Payroll Deduction initiative is passed:

According to the U.S. Bureau of Labor Statistics, the average annual wage for non-right-to-work states is almost six thousand dollars higher than right-to-work states. The percentage of the population without health insurance of non-right-to-work states is 13.4 percent, compared to the 16.1 percent in right to work states.”

“There have been claims that in non-right-to-work states, less people get hired because of the higher wages and benefits. But again, according to the U.S. Bureau of Labor Statistics, the state poverty rates for non-right-to-work states is 10.2 percent, as opposed to the 13.4 percent poverty rate in right-to-work states”

“Right to work” is a deceptive and complicated title. Supporters of RTW believe that by limiting collective bargaining and thus limiting unions, they will increase businesses coming to the state, but since NAFTA, this has no longer proven to be true. Companies looking for lower wages go to China or Mexico, not Oklahoma-a state that adopted RTW laws after NAFTA went into effect.

Since Oklahoma’s adoption of RTW laws it has seen a 1/3 loss in corporations coming into the state and wages of nonunion workers have fallen 4.3%. Even the think tank, OCPA, that strongly supported RTW in Oklahoma has admitted that, “manufacturing employment fell” in the 10 years since RTW was implemented.

A recent New Hampshire policy brief outlined the reasoning behind that state’s refusal to pass a RTW law in 2011:

“A right-to-work law could lower New Hampshire workers’ wages, reduce benefits, and threaten the state’s small business and health care sectors while doing nothing to boost job growth.”

California can’t afford to follow in Oklahoma’s footsteps. According to a recent article in the Sacramento Bee the payroll deduction initiative would:

“ban both unions and corporations from contributing directly to candidates…The measure, which hasn’t been assigned a proposition number yet, is especially tough on labor because it would ban all payroll-deducted contributions – unions’ primary method of raising money for those independent expenditure committees.”

“Corporations, by contrast, raise the bulk of their political money from shareholders and executives.”

How often do CEOs or other corporate workers contribute to a candidate through a payroll deduction? My guess is close to never. Therefore, the only special interest that is actually being limited by this initiative is union workers, not corporations.

This initiative has another shocking aspect. It has a “conflict of interest” clause that would make any public employee unable to donate to a campaign, even as a private citizen.

Tony Alexander, the assistant to the President and Political Director for United Food and Commercial Workers Local 5, the largest private sector union in Northern California, explained that this would mean even if you are working at Safeway you would be considered a “government contractor” and thus prohibited from making donations to candidates.

Christy Bouma, who has spent 12 years working on behalf of the of California Professional Firefighters, calls this initiative “corporate deception” because it allows for corporate special interest donations and only limits those of the working class.

Unions have been getting a lot of heat lately and do not have the best reputation in the public eye, but why is that when unions have in fact provided us with so many rights that we take for granted everyday, such as child labor laws, sick leave, OSHA, overtime pay, paid vacations, safe work place laws, worker’s compensation and more?

Even 401ks were created by the private sector so that they could compete for union workers with pensions.

Mark Leach, President of IBEW Local Union 617 in San Mateo California told me, “corruption is a thing of the past, but history lives forever,” when I questioned him about the perception of corruption in unions.

So are we going to believe the numbers, or the rhetoric, California?