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Michigan adapts to the reality of globalization page 2
Charles Krauthammer's op-ed column on

Date published: 12/17/2012

continued

Principle and hypocrisy aside, however, the president's statement has some validity. Let's be honest: Right-to-work laws do weaken unions. And de-unionization can lead to lower wages.

But there is another factor at play: having a job in the first place. In right-to-work states, the average wage is about 10 percent lower. But in right-to-work states, unemployment also is about 10 percent lower.

Higher wages or lower unemployment? It is a wrenching choice. Although, you would think that liberals would be more inclined to spread the wealth--i.e., the jobs--around, preferring somewhat lower pay in order to leave fewer fellow workers mired in unemployment.

Think of the moral calculus. Lower wages cause an incremental decline in one's wellbeing. No doubt. But for the unemployed, the decline is categorical, sometimes catastrophic--a loss not just of income but of independence and dignity.

Nor does protectionism offer escape from this dilemma. Shutting out China and the others deprives less-well-off Americans of access to the kinds of goods once reserved for the upper classes: quality clothing, furnishings, electronics, durable goods--from the Taiwanese-manufactured smartphone to the affordable, highly functional Kia.

Globalization taketh away. But it giveth more. The net benefit of free trade has been known since, oh, 1817. (See David Ricardo and the Law of Comparative Advantage.) There is no easy parachute from reality.

Obama calls this a race to the bottom. No, it's a race to a new equilibrium that tries to maintain employment levels, albeit at the price of some modest wage decline. It is a choice not to be despised.

I have great admiration for the dignity and protections trade unionism has brought to American workers. I have no great desire to see the private-sector unions defenestrated. (Like FDR, Fiorello La Guardia, and George Meany, however, I don't extend that sympathy to public-sector unions.)

But rigidity and nostalgia have a price. The industrial Midwest is littered with the resulting wreckage. Michigan most notably, where its formerly great metropolis of Detroit is reduced to boarded-up bankruptcy by its inability and unwillingness to adapt to global change.

It's easy to understand why a state such as Michigan would seek to recover its competitiveness by emulating the success of neighboring Indiana. One can sympathize with those who pine for the union glory days, while at the same time welcoming the new realism that promises not an impossible restoration, but desperately needed--and doable--recalibration and recovery.

Charles Krauthammer is a columnist for the Washington Post Writers Group.


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