Latest posts by Jesse Hathaway (see all)
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Labor unions are fighting hard to maintain the power to force people to join unions as a condition of work. In June, Gov. Jay Nixon, Missouri Democrat, vetoed a bill banning forced union membership and forced union dues payments in the workplace, and the legislature just upheld his veto.
Mr. Nixon said giving workers the right to decide how to spend their hard-earned dollars would “stunt economic growth” by reducing the amount of money available for unions to spend on training new union members.
Mr. Nixon’s convoluted thinking in defense of continuing to force people into unions and deducting union dues from their paychecks against their wishes has nothing to do with economic growth and is all about paying off a powerful interest group desperately trying to stave off decline. Less than a week after vetoing the right-to-work bill, Mr. Nixon’s political action committee received a check for $50,000 from the United Auto Workers.
Although Mr. Nixon’s veto was sustained in Missouri, organized labor represents a shrinking proportion of American workers, making the fight against workplace freedom that much more urgent for union leaders. Union leaders’ paychecks come from extracting union dues from members’ paychecks, so labor bosses have a selfish reason to fear declining membership numbers. According to the U.S. Department of Labor’s Bureau of Labor Statistics, more than one of every five employed Americans in 1983 were part of a union. Thirty-one years later, in 2014, about one of every 10 workers was a member of a union.
Research by Ohio University economics professor Richard Vedder suggests right-to-work (RTW) laws remove a significant impediment to the growth of state economies and individuals’ incomes. In a 2014 study, Mr. Vedder modeled the economies of states with and without RTW worker protections and found, “[T]he overall effect of a RTW law is to increase economic growth rates by 11.5 percentage points. “[The effect] is significant at the 99 percent confidence level.”
Mr. Vedder’s model also found individuals’ fortunes are tied to economic freedom. In general, his study found the income difference between those living and working in right-to-work states and those in compulsory-unionism states was more than $3,200 per person per year, or $13,112 per year for a family of four.
“It is the difference between sending your children to a low-cost, nearby community college and sending them to live four years at the state’s flagship university or even a private college,” Mr. Vedder writes. “That is the difference between, say, living in a three-bedroom home with one car and taking only one, short, nearby vacation [and] living in a larger four-bedroom home with two cars and taking a longer European vacation or a cruise.”
Opposing right-to-work laws may make sense for unions, but it’s a bad deal for workers. For compulsory-membership states with neighbors with right-to-work laws, there’s “a giant sucking sound” as businesses relocate across the border to states with economic climates more conducive to job growth.
In the May 2015 issue of Site Selection, a trade magazine for corporate real estate agents and government economic development agency officials, writer Mark Amend notes two new entries in the magazine’s annual tabulation of newly constructed factory plants, Indiana and Michigan, are states with recently enacted right-to-work laws.
In another industry trade magazine, Area Development, Strategic Development Group Inc. president and consultant Mark Williams told writer Beth Mattson-Teig that “many companies are even willing to pay more to employees in order to be able to work in a nonunion environment and, ultimately, have the flexibility to operate more profitably.”
According to Mark Sweeny, a senior principal at McCallum Sweeney Consulting, “approximately 25 to 50 percent of the firm’s clients still prefer to make RTW a ‘pass-fail’ criterion. In addition, those decisions are generally made prior to any communication with development agencies.”
In other words, a significant number of companies thinking about creating new jobs are using states’ right-to-work status to guide their site selection process, and non-RTW states are almost automatically disqualified from the get-go in the minds of the people making that call.
If unions were to compete for workers’ dollars by providing better services, and workers decided the cost of union membership was worth it, increased income growth might lead to higher union membership rolls. Instead, unions’ ongoing fight against worker choice suggests they are afraid workers do not value union services.
That’s a poor reason for governments to keep workers trapped in the union cage.