Earlier this month Wisconsin lawmakers, under the leadership of Gov. Scott Walker, voted to join the ranks of the right-to-work states. Twenty five states—half the nation—now give employees the ability to hold a job without having to join a union, and the recent Republican wave in state houses across the country could expand that number significantly over the next few years.
The economic benefit of such a move is clear. Luke Hilgemann and David Fladeboe write for the Wall Street Journal:
By nearly any metric they come out on top of their competitors. The clearest evidence is the disproportionate job growth in right-to-work states. According to data from the Bureau of Labor Statistics, from 2003-13 states with such laws increased their employment rolls by 9.5%—nearly three percentage points more than the national average and more than double the growth in non-right-to-work states.
These weren’t average jobs, either. They were good-paying positions with increasing wages. Personal incomes in those states grew 12% more than in states without right-to-work protections during that same 10-year period, according to a 2014 study by the American Legislative Exchange Council. . .
These better jobs and growing incomes also lead to stronger economic growth. According to data from the Bureau of Economic Analysis, the economies of right-to-work states grew about 10% more than non-right-to-work states between 2003 and 2013. That amounts to billions of dollars in additional economic activity—made possible in no small part by giving employees the simple right to choose whether to join a union.
Democrats, often with no economic evidence on their side, argue that unions preserve higher wages and benefits for their workers by giving them negotiating power against companies. There has also been a concentrated effort to paint an expansion of union membership as the cure for income inequality and a prescription for a decline in the middle-class. The Washington Post reports:
In recent months, a collection of left-leaning politicians, economists, and public intellectuals have started making a renewed case for collective bargaining as a tool to heal the ailing middle class. The pitch doubles as an effort for Democrats to preserve a key constituency they’ve long relied on to win elections, at a time when conservatives are making strong gains in often very public attacks on union power.
Although the political power of unions is real (90 percent of union spending goes to Democrats) there is little evidence to suggest that membership does anything to ameliorate income inequality. In fact, there is evidence that unions achieve higher wages for their workers, but by getting above-market compensation, the size of the unionized workforce is smaller than it would otherwise be. That’s because employers respond by growing more slowly, hiring fewer workers, or attempting to replace human labor with machines.
The data also shows that while union membership may have a causal relationship with income inequality, it also has a causal relationship with employment growth. In other words, taking steps to increase or just preserve the unionization rate would require slowing growth at non-union firms. Equality among the working class may improve, but it will come at the cost of expanding the income gap between the employed and the unemployed.
Separate and apart from the underlying economics, the more important issue at stake is one of freedom. The threat arises on two fronts. Unions are exempt from the Clayton Antitrust Act, which means they can operate as monopolies, with members having no alternatives for representation. That, in turn, pushes up the dues that unions collect from their members. The word “members” deserves to be in quotes because the Wagner Act removed a worker’s right to work for a unionized firm without paying dues.
As Mark Hendrickson writes for Forbes:
Unfortunately for workers, the combined force of the Clayton and Wagner acts made labor unions politically powerful but economically destructive entities. Unions used their monopoly privilege against both their own employers and against other workers. Indeed, all the union rhetoric about “the solidarity of labor” is a cynical fraud, because unions have been cannibalistic, enriching some workers while devouring the jobs of other workers.
Is it any wonder then that states are beginning to push for right to work status? It helps their economies and adds significantly to the freedom of their workers. That’s a winning combination that any governor, Democrat or Republican, should be quick to capitalize on.