States That Adopt This Policy Have Much Better Economies
Right-to-work is back in the spotlight, thanks to the recent Supreme Court decision in Harris v. Quinn.
The court ruled that Illinois home care workers cannot be compelled to pay union dues to the Service Employees International Union if those workers are not union members.
This was a limited victory for worker rights against coercive unionization and forced payment of union dues of all employees. Most Americans would probably be surprised to learn that in 2014 this is not already a protected right in most states.
In 26 states, workers can be compelled to join a union and pay dues at a union shop whether they wish to or not. Under the 1935 National Labor Relations Act, workers can even be forced to pay union dues for partisan political activities with which they don’t agree.
The one exception is that under the Taft-Hartley Act of 1947, states may pass right-to-work laws that protect workers from being required to join the union as a condition of employment. With the recent passage of right-to-work laws in Michigan and Indiana, there are now 24 states with this workplace freedom, while the other 26 states still allow forced unionization.
In our new book, An Inquiry into the Nature and Causes of the Wealth of States, (with Arthur Laffer, Travis Brown, and Rex Sinquefield), we find that these right-to-work states are performing much better economically than the non-right-to-work states.
Many businesses refuse to locate a new plant in a state that doesn’t offer this worker and employer protection against coercive powers of unions. It was no geographical accident that Boeing built its new assembly plant in South Carolina and not in its home state of Washington and why the unions and the Obama administration tried to block the move. South Carolina is a right-to-work state, Washington isn’t.
The nearby charts show what a difference a right-to-work law can make for jobs and economic development. Population growth over the last decade was 13 percent in right-to-work states versus only 6.5 percent in the others.
Nearly five million Americans left forced-union states for right-to-work states, no doubt because right-to-work states are where the jobs are. Total income growth was about 10 percent higher in right-to-work states.
This refutes the argument by the Left that union power makes a state richer. If union power is such a positive force for the middle class and blue-collar workers, why are workers voting with their feet against these policies?
The answer is that Americans go to where the jobs are. And job creation is happening at twice the pace over the last decade in right-to-work states. This is a lesson that Indiana and Michigan have learned.
Both states have seen healthy job growth above the national average (even with the bankruptcy of Detroit) since workplace freedom was extended to workers.
In researching our book, we discovered that the two most important policy variables influencing the prosperity of particular states are whether a state has a right-to-work law and its income tax rate (the lower the better). These two factors help explain the flow of jobs and people from the Midwest and Northeast to the South and Southeast.
In our interviews with CEOs of major companies over the years, many told me they wouldn’t even consider moving a new plant or facility to a state unless the state has a right-to-work law. Forced-union states like Maryland aren’t even in the game.
If every state had such a law, the competitiveness of the entire nation would improve and fewer jobs would go overseas. In the spirit of 1776, I would love to see Congress amend the NLRA defining a nationally protected right to work and extend to all Americans a First Amendment right not to associate with a union.
Given the union power hold in Washington, however, that isn’t likely to happen any time soon. Until it does, every state should improve its competitive climate domestically and internationally by enacting a right-to-work law. This is one of those wonderful rare instances where states can do good and do well at the same time.
Republished from The Daily Signal.