Predictably, yesterday, labor unions and its supporters protested outside of the Wisconsin Capitol to voice their displeasure with the right-to-work (RTW) bill that is making its way through the state’s legislature.
On Tuesday, the Wisconsin Senate labor committee held a hearing on the RTW bill, which would eliminate compulsory union dues payments in the private sector. After the committee heard testimony from both sides, Republicans voted the RTW bill out of the committee and it is headed to the full Senate for a vote.
At the hearing, opponents of RTW trotted out the same tired attacks on granting workers a choice in whether or not to pay union dues.
Let’s examine the most common union arguments against RTW.
One union member, Mike Coenen of Milwaukee, said, “This has nothing to do with commerce.”
A Competitive Enterprise Institute report on RTW finds the opposite. For example, 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.
Another common refrain from RTW opponents is that the law will “lower worker pay.”
According to the CEI RTW 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.
In addition, 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 right to work law was $3,547—the eighth highest loss of income in non-RTW states. In Wisconsin, the total estimated income loss from not having a right to work law was over $20 billion.
Maybe the most repeated slight of RTW is the purported “free rider” problem. Simply, unions argue since they have to represent all employees in a bargaining unit that they should be able to force all workers to pay dues.
This is a self-imposed problem. Labor unions choose to negotiate contracts that cover all workers instead of members-only agreements where unions only have to represent members.
Last, a union member said, “These are private contracts… They (the government) should butt out.”
RTW proponents most likely would and should agree with the above sentiment. However, the union member, I assume, only wants the government to butt out of giving workers a choice in paying union dues. It is doubtful that union advocates would prefer a system which promotes freedom of contract. That system, where government truly removed itself from interfering with private contracts, would allow companies to outlaw unions at its workplace and use non-union labor exclusively, or vice versa.
In the end, until national labor law is drastically overhauled, RTW is a better policy prescription than compulsory union dues payments for states that want to offer greater worker freedom and improve the economy.