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Friday, December 07, 2012

Wall Street Journal Pushes Myths About Wage-Lowering "Right-To-Work" Law



Wall Street Journal editorial pushed a so-called "right-to-work" law for Michigan that the Journalclaims will help fix the state's economy. But economic studies show that such laws lead to lower wages and benefits for all workers and don't boost employment in the states that have adopted them.

The Journal Pushes For Anti-Union "Right-To-Work" Law In Michigan

WSJ: Michigan GOP Lawmakers Consider "Right-To-Work" Law "To Help The Lagging State Economy." In a December 5 editorial, The Wall Street Journal claimed that there are "economic benefits" to a so-called "right-to-work" law for Michigan and promoted it as a "happy possibility":
Unions lost big in Michigan in November when voters rejected Proposal 2, Big Labor's plan to canonize collective bargaining in the state constitution. Now they are facing a backlash with the happy possibility that Michigan could become the 24th right-to-work state.
Lawmakers have been preparing to introduce a right-to-work bill in the state legislature, and the labor cavalry is heading to the Wolverine state.
[...]
[T]he economy has languished. Michigan is the fifth most unionized state in the country and the birthplace of the UAW. According to the Mackinac Center for Public Policy, Michigan has lost 7,300 jobs since January, while next-door Indiana, which became a right-to-work state earlier this year, has been on the upswing.
[...]
[I]f a right-to-work law passed the legislature, unions could still try to repeal it on the ballot, as they did this year with the emergency manager law, which let the Governor appoint emergency financial managers who could redo collective-bargaining agreements. By the time a similar fight could be waged against right to work, voters could have had more than a year to see the law's economic benefits. [The Wall Street Journal12/5/12]

But Studies Show "Right-To-Work" Laws Hurt Wages And Benefits For All Workers

Economic Policy Institute: "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 (EPI), 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 University's Lonnie Stevans: "Wages And Personal Income Are Both Lower In Right-To-Work States." In an analysis of the economic impact of "right-to-work" laws, Hofstra University professor Lonnie 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 Newspapers 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]

"Right-To-Work" Laws Have Little Impact On Employment Or 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 found 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 stated:
[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's Stevans: "Right-To-Work" Laws Result In "Little Or No Gain" In Employment And Economic Growth. Hofstra professor Lonnie Stevans 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]

"Right-To-Work" Laws Do Not Give Workers Any More Rights

Center For American Progress: "Right-To-Work Has Nothing To Do With People Being Forced To Be Union Members." The Center for American Progress report titled "Right-to-Work 101" explains that "right-to-work" laws simply "allow some workers to receive a free ride" by receiving benefits from a union contract without having to pay for it:
In states where the law exists, "right-to-work" makes it illegal for workers and employers to negotiate a contract requiring everyone who benefits from a union contract to pay their fair share of the costs of administering it. Right-to-work has nothing to do with people being forced to be union members.
Federal law already guarantees that no one can be forced to be a member of a union, or to pay any amount of dues or fees to a political or social cause they don't support. What right-to-work laws do is allow some workers to receive a free ride, getting the advantages of a union contract -- such as higher wages and benefits and protection against arbitrary discipline -- without paying any fee associated with negotiating on these matters.
That's because the union must represent all workers with the same due diligence regardless of whether they join the union or pay it dues or other fees and a union contract must cover all workers, again regardless of their membership in or financial support for the union. In states without right-to-work laws, workers covered by a union contract can refuse union membership and pay a fee covering only the costs of workplace bargaining rather than the full cost of dues. [Center for American Progress Action Fund, 2/2/12]
NLRB: Workers That Don't Want Full Union Membership "Pay Only That Share Of Dues Used Directly For Representation" Of Union Contract They Work Under. The National Labor Relations Board (NLRB) explains that workers do not have to be full union members, but instead must only pay for the union representation they receive by working at a union shop, regardless of their membership status:
The NLRA allows employers and unions to enter into union-security agreements, which require all employees in a bargaining unit to become union members and begin paying union dues and fees within 30 days of being hired.
Even under a security agreement, employees who object to full union membership may continue as 'core' members and pay only that share of dues used directly for representation, such as collective bargaining and contract administration. Known as objectors, they are no longer full members but are still protected by the union contract. Unions are obligated to tell all covered employees about this option, which was created by a Supreme Court ruling and is known as the Beck right. [National Labor Relations Board, accessed 12/6/12]
NLRB: In "Right-To-Work" States, Employees Who Choose Not To Pay Union Dues Still Receive Protections From Union Contracts. The National Labor Relations Board further explained that in states with "right-to-work" laws, workers get to choose whether to pay union representation dues even while they benefit from a union contract:
More than 20 states have banned union-security agreements by passing so-called "right to work" laws. In these states, it is up to each employee at a workplace to decide whether or not to join the union and pay dues, even though all workers are protected by the collective bargaining agreement negotiated by the union. [National Labor Relations Board, accessed12/6/12]
Economist Dean Baker: "Right-To-Work Laws Prohibit Workers From Being Required To Pay For" Their Union Representation. Dean Baker, co-director of the Center for Economic and Policy Research explained the fallacy behind so-called "right-to-work" laws:
"Right to work" is a great name from the standpoint of proponents, just like the term "death tax" is effective for opponents of the estate tax, but it has nothing to do with the issue at hand. It is widely believed that in the absence of right-to-work laws workers can be forced to join a union. This is not true. Workers at any workplace always have the option as to whether or not to join a union.
Right-to-work laws prohibit contracts that require that all the workers who benefit from union representation to pay for union representation. In states without right-to-work laws unions often sign contracts that require that all the workers in a bargaining unit pay a representation fee to the union that represents the bargaining unit.
The logic is straightforward. When a union is recognized as representing a bargaining unit it legally must represent every worker in that unit, whether or not a worker opts to join the union.
This means not only that non-members get the same wages and benefits that the union negotiates with the employer, but the union is also obligated to represent any non-member individually if that worker gets in a dispute with the employer over an issue covered in the contract. For example, if a non-union member is threatened with a discipline action or firing, the union must defend this worker's rights just the same as if they were in the union.
Right-to-work laws prohibit workers from being required to pay for this union representation. What right-to-work laws actually guarantee is the ability for a worker to benefit from union representation without having to pay for union representation. [Center for Economic and Policy Research, 2/28/11]
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