Right to Work Should Be on the Agenda in Ohio and Wisconsin
One takeaway from the midterm elections is politicians who support labor reform, which protects worker choice and reduce union coercive power, should not fear political retaliation from labor unions.
That being said, after the conclusion of the midterm elections, Republicans have total political control, in which they hold the governor’s office and both chambers of the state legislature, in two forced-unionism states, Ohio and Wisconsin.
This should make these states ripe for passing right-to-work, especially since both Governor John Kasich (R-Ohio) and Gov. Scott Walker (R-Wisc.) made economic growth and job creation top priorities during their campaigns.
Simply, right-to-work provides workers the freedom to choose whether or not to join a union and prohibits unions from negotiating a union security clause, which requires union dues payments as a condition of employment.
On top of providing workers with greater freedom to contract individually, right-to-work laws also contribute to state economic growth and job creation. My organization, the Competitive Enterprise Institute, recently produced a study that bears this out.
Ohio University economics professor Richard Vedder authored the report, “An Interstate Analysis of Right to Work Laws,” which presents the results of an economic analysis of the impact of right-to-work laws from 1977-2012 on “state economies, and ranks states’ per capita income loss from not having a Right to Work law,” while controlling for variables like population growth, manufacturing, and education level.
Overall, the study finds a statistically significant and positive relationship between economic growth in a state and the presence of a right-to-work law. Major findings of the study include:
- Real total personal income grew by 165 percent in right-to-work states over a 31-year span, outpacing the national average of 123 percent growth.
- The income loss per person from forced unionism is a median of $3,278, or over $13,100 for a family of four.
- The total estimated income loss in 2012 from the lack of RTW laws was an extraordinary $647.8 billion, or about $2,000 for every American.
- From 2000–2009, approximately 4.9 million people migrated from non-right-to-work states to those states with right-to-work laws.
- The overall effect of a right-to-work law increases economic-growth rates by 11.5 percentage points.
In Ohio and Wisconsin, over the duration the study analyzed, estimated per capita income loss associated with not having a right-to-work law is $3,260 and $3,547, respectively.
Further, Ohio and Wisconsin’s Midwest neighbors, Indiana and Michigan, recently enacted right-to-work laws. As the study details, capital tends to move away from non-right-to-work states because unionization increases labor costs, by as much as 10 percent. For example, the study puts forth the following hypothetical scenario:
Suppose a firm is contemplating locating its operation in southwestern Ohio, where there is no Right to Work law, or just across the border in Indiana, which has a Right to Work law. Suppose general labor market conditions are similar in both areas, with wages for most unskilled workers being about $10 an hour. Suppose, however, the firm considers the possiblity of unionization to be high in Ohio, but low in Indiana, and that unionization will add at least 10 percent to labor costs. Because labor costs are perhaps 50 percent–or even more–of total costs, this concern means the firm considers it a real possibility that total per unit costs of producing output could be at least 5 percent higher in Ohio, therefore encouraging it to locate in Indiana instead.
As seen in the elections, politicians in support of right-to-work fared well and union political blowback should not deter future efforts to protect worker freedom. In addition, besides the proof from the election, right-to-work laws have never been more popular with the public. A recent Gallup poll finds that 71 percent of Americans say they would vote for a right-to-work law.