After sweeping victories at the state level in the 2010 midterm elections, Republican-dominated legislators throughout the county have been pushing through so-called “right-to-work” laws. Jimmy Hoffa, the president of the Teamsters, has said that proponents of right-to-work laws are waging a “war on workers”; Martin Luther King Jr. called right-to-work a “false slogan” and argued that they “rob us of our civil rights and job rights.” Supporters of right-to-work laws, however, contend that they are necessary to bolster states’ weak economies, which have suffered “abuses of workers’ human rights and civil liberties.” On March 9, 2015, Wisconsin became the 25th state with right-to-work legislation on the books.
So what is a right-to-work law, anyway?
In the early 20th century, the regulation of labor and collective bargaining was left to the states. Although the laws varied, most states adopted policies of open competition with minimal governmental regulation. This situation changed in 1926 with the passage of the Railway Labor Act. The Railway Labor Act was the first federal law to guarantee collective bargaining rights to a group of workers – the legislation sought to substitute bargaining, arbitration, and mediation for strikes as a means of resolving labor disputes. Then, in 1932, Congress strengthened workers rights through the Norris-LaGuardia Act, which prohibited federal courts from issuing an injunction in any labor dispute (e.g., federal courts could no longer end a worker strike if they did not approve of its methods or objectives).
The heart of federal regulation of labor-management relations and collective bargaining, however, is the National Labor Relations Act (NLRA). Enacted in 1935, the NLRA (also known as the Wagner Act) found that the refusals of employers to collectively bargain with employees “lead to strikes and other forms of industrial strife or unrest, which have the intent or the necessary effect of burdening or obstructing commerce.” To remedy this issue, the NLRA guarantees workers the right to organize and bargain collectively over wages, hours, and conditions of employment. It also establishes procedures for the election and certification of unions and establishes unfair labor practices for employers that may discourage unionizing.
Passed over presidential veto in 1947, the Taft-Hartley Act (also known as the Labor Management Relations Act) substantially amended the NLRA. Whereas the original NLRA largely focused on asserting the rights of workers and organized labor, the Taft-Hartley Act sought to tip the playing field back onto the side of the employer. The Taft-Hartley Act addresses employers, employees, and labor unions as equal parties in the negotiation process and states that “neither has any right in its relations with any other to engage in acts or practices which jeopardize the public health, safety, or interest.” It supplemented existing unfair labor practices for employers by establishing unfair labor practices for unions. And it opened the door to the passage of right-to-work legislation by states. Specifically, the Taft-Hartley Act stated that individual states may pass laws prohibiting union security agreements in labor contracts and that these state laws would supersede the NLRA provisions authorizing union security agreements.
States without right-to-work laws are subject to the union security provisions of the NLRA, which specify that an elected union and an employer can agree to a collective bargaining contract that requires all workers covered by the contract to become dues-paying members within 30 days. In 1963, however, the Supreme Court held that an employee could not be required to join a union pursuant to a union security agreement; instead, the employee may pay dues but decline to become a member. These members are referred to as financial core members, and subsequent Supreme Court decisions have held that these members only need to pay dues to cover the cost of collective bargaining functions (e.g. bargaining, contract administration, and grievance adjustment) and do not have to financially support functions that are unrelated to collective bargaining, such as political activities.
The details of right-to-work laws vary by state. However, in general, right-to-work legislation prohibits the employers and elected unions to enter into collective bargaining contracts with union security agreements. As such, workers who are covered by a collective bargaining contract may choose whether or not to join the representing union and pay the corresponding union dues.
What is the benefit of right-to-work laws? Proponents argue that right-to-work laws create a favorable business environment in which employers have increased flexibility in hiring, discharge, and wage-setting. Empirical evidence regarding the relationship between right-to-work laws and economic outcomes, however, is decidedly inconclusive. Studies have yielded a variety of conclusions, largely dependent upon how the researchers conducted their analyses.
With regard to the relationship between right-to-work and employment, studies have shown that aggregate employment growth is greater in states with right-to-work laws. According to annual averages from the Bureau of Labor Statistics, from 2002-2012 employment in right-to-work states rose 6.6% whereas employment in union security states rose only 0.3%. Despite this, it is difficult to establish the role of right-to-work in a state’s economic performance. Aggregate date is often misleading and masks substantial variation between both right-to-work and union security states. For example, during the 10-year period described above, employment grew 13.3% and 11.3%, respectively, in the union security states of Alaska and Montana while declining 1.8% and experiencing no change, respectively, in the right-to-work states of Mississippi and Alabama. Further, it is important to note that right-to-work laws often exist alongside other, perhaps more compelling, pro-business policies that contribute significantly to economic growth.
A similar problem exists with the relationship between right-to-work and wages. According to the Bureau of Labor Statistics, wages in union security states are significantly higher (16%) than in right-to-work states. As is the case with employment levels, there is little controversy over these aggregate numbers. But the relationship between these data and right-to-work laws is subject to debate.
Studies are mixed between positive and negative wage effects from right-to-work laws. For example, a 2011 study by Gould and Shierholz compared wages between right-to-work and union security states while controlling for demographic, economic, geographic, and policy factors. The study concluded that “[o]nce we control for our comprehensive set of both individual and state-level observable characteristics, we find that the mean effect of working in a right-to-work state is a 3.2% reduction in wages.” Another study with a different methodology, however, challenges this conclusion. In 2003 study by Reed, for example, examined state-level income data and controlled for the states’ varied economic conditions before the adoption of right-to-work. Similar to previous studies, after controlling for income levels in 1945 (prior to the initial wave of right-to-work laws following the Taft-Hartley Act), Reed concluded that right-to-work laws were related were related to wages 6.7% higher than in union security states.
The foregoing makes clear the difficulty of isolating the effect of right-to-work policies on various economic outcomes, and highlights the difficulty of generating definitive findings about these relationships. As such, the resurgence of right-to-work legislation is likely driven by factors other than rigorous empirical evidence.
One motivation, to be sure, is the desire to reduce the bargaining power of unions, or simply eliminate them altogether. As Lydia DePillis noted in WaPo, “[a]s more and more workers benefit from a collective bargaining without paying for its upkeep, unions have become weaker, which lessens the incentive to join. The resulting tailspin, writ large, has been primarily responsible for the massive decline in unionization over the past half-century – making the struggle to stave off right-to-work laws a fight for union survival.”
Indeed, while the relationship between right-to-work and employment and wages may be debatable, the effect of right-to-work on rates of unionization is subject to little debate. Supporters of right-to-work argue that right-to-work laws bolster “individual rights” by preventing employees from being “forced to support an organization with which they disagree.” But union advocates often argue that right-to-work laws create a “free rider” problem – that is, they permit non-union-members to derive the benefits of union membership without sharing the cost of obtaining those benefits.
The concern over “individual rights” is misplaced, particularly given the Supreme Court’s ruling that employees may pay dues but decline to become a union member, and subsequent holdings that these dues need only to pay dues to cover the cost of collective bargaining functions. The “free rider” problem, on the other hand, is not mere hyperbole. By examining the rate of union membership and the share of workers represented by a union in right-to-work and union security states, two intuitive trends emerge. First, the union membership rate in union security states is nearly three times that of right-to-work states (15% vs. 5.6%). Second, the proportion of workers who are covered by a union contract but who are not members of the union is higher in right-to-work states than in union security states (19% vs. 7%).
When Wisconsin Gov. Scott Walker signed his states right-to-work bill in March, the occasion marked a symbolic threshold: fully half the country is now under laws that permit employees to opt out of paying union dues, even though the union is obligated to represent everyone in their workplace.
It is easy to be seduced by the premise behind right-to-work laws. After all, who could oppose the right to work? This is about freedom and individual liberty, right? And it’s good for business, right? Not necessarily. More likely, “right-to-work” is about union busting. Whether that is good or bad is quite a different question altogether.