Monday, February 27, 2012

Exposing What's Wrong With The "Right-To-Work" Myth

From Media Matters

Contrary to the right-wing media myth, right-to-work legislation does not lead to job growth and higher pay for workers. Economic studies have shown that the "evidence is overwhelming" that "right-to-work" laws have not boosted employment or wages in states that have adopted them.

Right-Wing Myth: "Right-To-Work" Laws Create Jobs

John Fund: "States That Have Right-To-Work Laws Created Something Like 900,000 New Jobs Over The Last 10 Years." American Spectator editor John Fund appeared on Fox News and argued that "right-to-work" laws create jobs:
BILL HEMMER (co-host): OK, would this new law, would it create jobs or is this just a way to -- I guess the unions were using the dues to make sure that they stayed strong, right?
FUND: Well, the Labor Department has shown that states that have right-to-work laws created something like 900,000 new jobs over the last 10 years. States that didn't have right-to-work laws lost over 3 million jobs. So, looking at this, it makes it easier for employers to come in and makes work schedules more flexible, and a lot of employers are now looking at states like Indiana to move to, especially from states like Illinois which are raising taxes and also have lots of union protections. [Fox News, America's Newsroom, 2/24/12]
Art Laffer: "Right-To-Work" States "Have Higher Employment Growth, Attract More Residents, And Have More Rapid Growth In State And Local Tax Revenues." In a February 11 Wall Street Journal op-ed, Art Laffer, a former economic adviser to President Reagan, argued:
The benefits to states having right-to-work legislation are overwhelming. As demonstrated by a number of economists, most notably Ohio State's Richard Vedder and Harvard's Robert Barro, the economies in states with right-to-work laws grow significantly faster than those in forced-union states. They also have higher employment growth, attract more residents, and have more rapid growth in state and local tax revenues than forced-union states. [The Wall Street Journal2/11/12]
Wash. Times' Nita Ghei"These Locations Boast The Highest Job-Creation Rates." Washington Times contributor Nita Ghei wrote a column defending "right-to-work" laws and argued:
Twenty-three other states have similar statutes that say employees cannot be forced to join a union or pay union dues as a precondition of employment. It's no coincidence that the states playing by these rules are some of the economy's best performers, such as Texas, Tennessee and even Alabama. These locations boast the highest job-creation rates, a vital factor for suffering Americans in these days of 8.5 percent unemployment. [The Washington Times1/26/12]

Real World Reality: "Right-To-Work" Laws Have Little Impact On Employment, Economic Growth

EPI: Evidence Shows "Right-To-Work" Legislation "Has No Statistically Significant Impact Whatsoever" On Job Growth. The Economic Policy Institute analyzed employment growth in states with and without "right-to-work" laws and reported that "the evidence is overwhelming" that "right-to-work laws have not succeeded in boosting employment growth in the states that have adopted them." The report also reported:
[T]he history of right-to-work studies has a clear trajectory. The more scholars are able to hold "all other things" equal, the more it becomes clear that these laws have little or no positive impact on a state's job growth. The most recent and most methodologically rigorous studies conclude that the policy has no statistically significant impact whatsoever. [Economic Policy Institute, 3/16/11]
Hofstra University's Lonnie Stevans: "Right-To-Work" Laws Result In "Little Or No Gain" In Employment And Economic Growth. Lonnie Stevans, director of Hofstra University's Business Research Institute, analyzed the economic impact of "right-to-work" laws and concluded that "from a state's economic standpoint, being right-to-work yields little or no gain in employment and real economic growth." [Review of Law & Economics, Volume 5, Issue 1, 2009]
AP: Experts Say It's "Nearly Impossible" To Show Impact Of "Right-To-Work" Laws On State Economies. From an Associated Press article on "right-to-work" laws:
The evidence on the issue is abundant, but also conflicting and murky. The clearest conclusion, according to many experts, is that the economies of states respond to a mix of factors, ranging from the swings in the national economy to demographic trends, and that isolating the impact of right-to-work is nearly impossible.
Obscuring the answer is "the difficulty of distinguishing the effects of the RTW laws from state characteristics, as well as other state policies that are unrelated with these laws," said economists Ozkan Eren and Serkan Ozbeklik, who conducted a major study last year of the right-to-work laws in Oklahoma and Idaho.
For major industries, the chief factors in choosing locations tend to be access to supplies, infrastructure, key markets and a skilled workforce, according to business-recruitment specialists. For a state's workers, the impact of the laws is limited because only about 7 percent of private-sector employees are unionized. Over the years, job growth has surged in states with and without right-to-work laws.
"The reason we don't have clear views (on right-to-work laws) is because it's always being debated at its extremes," said Gary Chaison, a professor of labor relations at Clark University in Massachusetts, who assigns his students to analyze the issue each year. In the end, when it comes to jobs and the law, "we don't know causation," he said. [Associated Press, 1/28/12]
NY Times' Rosenthal: "Six Of The 10 States With The Highest Unemployment Have Right-To-Work Laws In Place." Discussing the impact of "right-to-work" laws on the economy, New York Timeseditorial page editor Andrew Rosenthal reported that "economists have found that unionization has a minimal impact on growth and employment. Six of the 10 states with the highest unemployment have right-to-work laws in place. North Carolina, which has the lowest unionization rate in the country, 1.8 percent, also has the sixth highest unemployment, 10 percent." [The New York Times, The Loyal Opposition, 2/2/12]

Real World Reality: "Right-To-Work" Had "Significant And Negative" Effect On Employment

AP: "Proponents Point To An Immediate Impact In Oklahoma, Which Adopted The Measure In 2001." The AP reported:
In 2002, the state added 7,822 jobs, said Fred Morgan, president of the Oklahoma Chamber of Commerce.
"In 2002, the Oklahoma Department of Commerce reported that companies announced plans to add the highest number of new jobs since 1995," Morgan said.
However, the chamber study does not account for significant factors affecting employment in the period cited. A massive decline in American manufacturing had a severe impact on jobs in the Rust Belt, where states without right-to-work laws are clustered.
The Sun Belt, where most states have the law, had fewer manufacturing jobs to lose and experienced big increases in population.
In Oklahoma, the job gains after the law passed also were not unusual in the region. Three neighboring states without a right-to-work law -- Missouri, New Mexico and Colorado -- experienced similar job growth, in some cases even exceeding Oklahoma's. [Associated Press, 1/28/12]
EPI: "The Adoption Of Right-To-Work In Oklahoma Had No Significant Positive Impact Whatsoever On Employment." The Economic Policy measured the impact of implementing "right-to-work" laws in Oklahoma and concluded:
No matter how we analyzed the data, the result was always the same: The adoption of right-to-work in Oklahoma had no significant positive impact whatsoever on employment. In every instance, the effect of the law was either insignificant or, more often, significant and negative. When we tracked year-by-year changes, the data show Oklahoma improving relative to its neighbors in the years leading up to adoption of right-to-work -- strongly suggesting that factors other than right-to-work are driving the state's employment trends.
The years following the law's adoption are overwhelmingly associated with negative employment effects. The sample that compares all counties in Oklahoma with all counties in its neighboring states gives the most robust estimates due to the larger sample size. Here too, the data suggest that Oklahoma's employment declined by 1-3%, relative to its neighbors, in the years following adoption of right-to-work. [Economic Policy Institute,3/16/11]

Real World Reality: "Right-To-Work" Laws Cut Wages And Benefits

EPI: "Right-To-Work" Laws "Are Associated With Significantly Lower Wages And Reduced Chances Of Receiving Employer-Sponsored Health Insurance And Pensions." Elise Gould and Heidi Shierholz, researchers at the Economic Policy Institute, studied what they called "the compensation penalty of 'right-to-work' laws" and concluded:
[O]ur findings -- that "right-to-work" laws are associated with significantly lower wages and reduced chances of receiving employer-sponsored health insurance and pensions -- are based on the most rigorous statistical analysis currently possible. These findings should discourage right-to-work policy initiatives. The fact is, while RTW legislation misleadingly sounds like a positive change in this weak economy, in reality the opportunity it gives workers is only that to work for lower wages and fewer benefits.
EPI estimated that "right-to-work" laws decreased hourly wages by 3 percent for all workers:
[Economic Policy Institute, 2/17/114/5/11]
Hofstra's Stevans: "Wages And Personal Income Are Both Lower In Right-To-Work States." In her analysis of the economic impact of "right-to-work" laws, Hofstra's Stevans wrote: "Wages and personal income are both lower in right-to-work states, yet proprietors' income is higher. As a result, while right-to-work states may maintain a somewhat better business environment relative to non-right-to-work states, these benefits do not necessarily translate into increased economic verve for the right-to-work states as a whole -- there appears to be little 'trickle-down' to the largely non-unionized workforce in these states." [Review of Law & Economics, Volume 5, Issue 1, 2009]
McClatchy: "Numerous Studies Have Found That Wages For Both Union And Non-Union Workers Are Lower In States With Right-To-Work Laws." McClatchy reported:
Numerous studies have found that wages for both union and non-union workers are lower in states with right-to-work laws. Others have found that workplace safety suffers in right-to-work states, where workers are less likely to secure job safety enhancements beyond federal and state regulations. [McClatchy Newspapers, 2/16/12]
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