No individual should be forced to financially support an organization they disagree with or risk penalty. Thankfully, Governor Scott Walker is determined to ensure that Wisconsin law won’t let that happen anymore by planning to sign the right-to-work (RTW) bill into law on Monday.
With that, Wisconsin will become the 25th RTW state, which means private-sector employers and unions may no longer agree to a contract provision that compels workers to pay union dues or lose their job.
The obvious benefit of a RTW law is that it protects worker freedom, but economic advantages also result in its passage as well as being popular policy among the public.
Economic Benefits of Right-to-Work
A recent study conducted by the Competitive Enterprise Institute presents the results of an economic analysis of the impact of RTW laws on state economies, and ranks states’ per capita income loss from not having RTW law, while controlling for variables such as population growth, manufacturing, and education level. Results find a significant and positive relationship between economic growth in a state and the presence of a RTW law.
A number of indicators show that RTW state economies are prospering at a greater rate than states that permit forced union fee payments.
Total employment growth in the United States from 1977 to 2012 was 71 percent. In RTW states, employment growth was 105.3 percent, while non-RTW states saw growth of only 50 percent. Overall, the analysis finds that the impact on states with RTW is an increase to economic growth rates of 11.5 percentage points.
According to the study, evidence suggests that if non-RTW states had adopted RTW laws about 35 years ago, annual income levels would be an estimated $3,000 per person higher today, or more than $13,000 for a family of four.
The total estimated income loss in 2012 from the lack of RTW laws in a majority of U.S. states was $647.8 billion—more than $2,000 for every American.
Real personal income, over the duration the study analyzed, grew by 123 percent in the United States, but RTW states saw faster growth rate of 165 percent whereas non-RTW only saw below average growth of 99 percent.
U.S. Census data show Americans in non-RTW states are increasingly migrating to states with RTW laws. From 2000 to 2009, 4.9 million Americans moved from non-RTW states to RTW states—an average of 1,450 persons per day.
In Wisconsin, workers would benefit more than the average from the presence of RTW. The Badger state estimated per capita income loss associated with not having a RTW law was $3,547—the eighth highest loss of income in non-RTW states. In Wisconsin, the total estimated income loss from the lack of RTW was over $20 billion.
According to the Bureau of Labor Statistics, from 2004 to 2013 RTW state job growth was more than double the rate of forced-union states—5.3 to 2.1 percent. In addition, The National Institute for Labor Relations Research reports “that 2013 per capita disposable income was $38,915 in RTW states, compared to $36,959 in forced-union states.”
Right-to-Work is What the People Want
Not only does RTW increase worker freedom and grow the economy, the law is popular. Recent polls show Americans support RTW by at least a 3-1 margin by Wisconsinites and nationally:
- A poll conducted by National Employee Freedom Week in 2014 asked “Should employees have the right to decide, without force or penalty, whether to join or leave a labor union?” 82.88 percent of Wisconsin participants answered yes. Nationally, 82.87 percent of participants agreed workers should not be forced to pay union dues.
- A Gallup poll asked, “Some states have passed right-to-work or open shop laws that say each worker has the right to hold his job in a company, no matter whether he joins a labor union, or not. If you were asked to vote on such a law, would you vote for it, or against it? The results, 71% would vote for, 22% would vote against, 7% had no opinion.
- A 2012 Rasmussen poll indicated 74 percent of individuals in the survey approved of RTW.
- Wisconsin Manufacturers and Commerce’s poll, conducted in mid-December, asked 503 registered voters questions pertaining to RTW and worker freedom. 69 percent of respondents supported worker freedom and Right to Work.
- A Wisconsin Policy Research Institute poll asked, “Some states have passed right-to-work or open shop laws that say each worker has the right to hold his job in a company, no matter whether he joins a labor union, or not. If you were asked to vote on such a law, would you vote for it or against it?” 62 percent of those asked stated they would vote for RTW.
Shortcoming of Federal Law Necessitates State Passage of Right-to-Work
The fact that federal labor law does not require labor unions to stand for reelection, even if the unionized workforce has seen significant employee turnover, make RTW a necessity. Currently, private-sector unions never stand for reelection, once a union organizes a workplace it remains the monopoly bargaining agent over the workforce in perpetuity.
That means, new hires never get the chance to vote on their own representation and are forced into paying union dues. Further, analysis shows that only 7 percent of the current private-sector workforce ever voted for the union that represents them in contract negotiations, which determines their pay and workplace conditions. While RTW does not give workers the freedom to represent themselves or to seek other representation, the law, at least, provides workers the freedom to stop financially supporting an organization they never voted for or want representing them.
Ultimately, RTW is good for workers, the economy and even unions by making them more accountable and receptive to the needs of their members because they may not use force to collect dues and puts a check on union activity because they must continually prove their worth to membership or risk losing dues paying members. Starting next week, Wisconsin will begin to reap the benefits of RTW and hopefully the rest of the 25 forced-unionism states will follow suit,