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What do right to work laws do to a state's economy?

Posted by on Jul. 6, 2013 at 10:27 AM
  • 66 Replies

What do ‘right-to-work’ laws do to a state’s economy?

The most significant policy fight of the week is arguably taking place in Michigan, where Republican lawmakers are pushing through a “right-to-work” bill that would weaken labor unions in one of the country’s most heavily unionized states. President Obama traveled to Michigan today and criticized the bill, which Gov. Rick Snyder (R) has yet to sign.


Workers protesting the right-to-work proposal in Michigan. (Carolos Asorio/AP)

Why the uproar? Under right-to-work laws, employees in unionized workplaces can no longer be required to pay unions for the cost of being represented. These statutes are broadly understood to erode the influence and power of organized labor — if unions have a harder time collecting money for the services they offer, they’ll have fewer resources to work with. Currently, 23 states have such laws on the books. Michigan would be the 24th — and, because of its long pro-union history, perhaps the most important. 

So what effects do these laws have? There’s a dizzying amount of research on the subject, but a few broad conclusions have emerged over the years: Right-to-work laws do weaken labor unions. The laws appear to tilt the balance of power so that workers reap fewer of the gains from growth. And it’s still hard to find definitive evidence that right-to-work laws help (or harm) a state’s overall economy. 

1) Right-to-work laws tend to weaken labor unions. This is one thing the left and right agree on. If unions are barred from requiring employees to pay the cost of representation, there’s a free-rider problem. Why bother sending money to my union if I’ll benefit from its bargaining efforts regardless? Pretty soon, unions are drained of funds and can’t launch as many organizing drives or wield influence. 

And unions do get weakened. A 1998 survey of the econometric literature by William J. Moore found that right-to-work laws lead to more free-riding behavior among employees. That, in turn, leads to a decline in unionization drives, in organizing successes, and ultimately in overall union density. Recently, Idaho and Oklahoma saw their union densities drop after adopting right-to-work laws in the early 2000s.

Some labor backers have wondered if unions can overcome this adversity. They’ll just have to prove their worth to workers. “For example,” writes Rich Yeselson, “the most powerful local union in the country, Culinary 226 in Las Vegas — a political powerhouse that ensures middle-class wages and benefits for hotel housekeepers — operates in a right-to-work state and gets close to 100% dues compliance.” That said, this appears to be an exception, not the rule.

2) Under right-to-work laws, workers reap fewer gains from economic growth. Supporters of right-to-work laws often argue that they’ll help attract more businesses to a state. Opponents retort that weakening unions will lead to an erosion of wages. (A large Economic Policy Institute study from 2011 found that, after controlling for a host of factors, right-to-work states have lower wages on average than pro-union states.)

Both arguments might be correct. One careful study conducted by Hofstra’s Lonnie Stevans in 2007 found that right-to-work laws do help boost the number of businesses in a state — but the gains mostly went to owners, while average wages went down. ”Although right-to-work states may be more attractive to business,” Stevans concludes, “this does not necessarily translate into enhanced economic verve in the right-to-work state if there is little ‘trickle-down’ from business owners to the non-unionized workers.”

So business owners gain, and workers lose. One possible retort is that these states could simply set up new safety-net programs to compensate workers who are hurt. But that leads to another question: Without strong unions in place, who will push for these policies?

3) The broader economic effects of right-to-work laws are often difficult to disentangle. There’s all sorts of research back and forth on the impacts of right-to-work rules. But as economists Ozkan Eren and Serkan Ozbeklik complained in onemajor study last year, most of this work is plagued by the “difficulty of distinguishing the effects of the [right-to-work] laws from state characteristics, as well as other state policies that are unrelated with these laws.”

For instance: In 2001, Oklahoma passed a right-to-work law and soon saw its manufacturing base shrivel. But how much of that was due to the law and how much due to competition from China? Similarly, one 1998 study by Thomas J. Holmes found that companies in heavily unionized states often relocated just across state borders to right-to-work states. But is that due to the right-to-work laws or other policies?

One reason why it’s so difficult to determine cause and effect is that only about 7 percent of private-sector U.S. workers are currently unionized — a small (and dwindling) slice of the workforce. What’s more, companies make decisions on where to locate for a whole slew of reasons, from energy costs to infrastructure. The strength of unions isn’t the only factor. That’s why we’ll continue to be barraged by study and counter-study for years to come.

4) The laws should also be placed in broader context. But set all the research aside for a second. The right-to-work bill in Michigan is also an indicator of a broader trend in the United States. As Rich Yeselson details, Michigan is one of the most heavily unionized states in the country, with 17.5 percent of workers belonging to a union. The United Autoworkers is one of the most storied unions in the country. If Michigan, of all places, is no longer safe from a sweeping revisions to its labor laws, then none of the remaining pro-union states in the Midwest and Northeast are immune.

In a country where the strength of organized labor has already been dwindling for decades, that’s a major change.

by on Jul. 6, 2013 at 10:27 AM
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Replies (1-10):
diaperstodating
by on Jul. 6, 2013 at 10:29 AM
Bump
blues_pagan
by on Jul. 6, 2013 at 10:30 AM

I just don't know why it is that weakening employees rights in order to boost business that will only advance the business owner.  It makes no sense to me, where is the incentive to work?

colins_mom
by Member on Jul. 6, 2013 at 10:38 AM
im in.MI, I.freaking HATE the right to work crap. because of it my hours at work got cut DRAMATICALLY. like from averaging 36-40 hours to they will not let me work more than 24 hours a week. once i hit 24 hours I.have to go home, I can't come in early, I can't stay late, if someone calls off I.can't get called in etc. we can not switch shifts with people etc. I can no longer afford to pay my bills and rent etc. my phone will be shut off on Monday and then I am up a shit creek with out a paddle as none of the places I put in apps for a second job will be able to contact me. I freaking hate it. its messing with my ability to work as I can't get to my job (can't afford gas and upkeep of insurance and maintenance on my car) and my job won't be able to call me. I still make too much for PA so I can't even feed my kid after they take taxes out of my check. my before taxes check this week was 299 and some change. claiming 9 and 5 (tax exempt pretty much) my take home was 200 dollars. had I been claiming the correct amount it would have been less than that. I can't pay rent on less than 200 a week.
blues_pagan
by on Jul. 6, 2013 at 10:58 AM

Sorry, I can't believe that is happening to you. I have a friend here from a right to work state and he hated it as well.  It was horrible working conditions.  Thankfully he moved back up here to New England where the laws are sane.  


And I just want to use this as an example to those in the other post who support "right to work".  THIS is what happens to the employees.  But of course who cares about them...right?

Quoting colins_mom:

im in.MI, I.freaking HATE the right to work crap. because of it my hours at work got cut DRAMATICALLY. like from averaging 36-40 hours to they will not let me work more than 24 hours a week. once i hit 24 hours I.have to go home, I can't come in early, I can't stay late, if someone calls off I.can't get called in etc. we can not switch shifts with people etc. I can no longer afford to pay my bills and rent etc. my phone will be shut off on Monday and then I am up a shit creek with out a paddle as none of the places I put in apps for a second job will be able to contact me. I freaking hate it. its messing with my ability to work as I can't get to my job (can't afford gas and upkeep of insurance and maintenance on my car) and my job won't be able to call me. I still make too much for PA so I can't even feed my kid after they take taxes out of my check. my before taxes check this week was 299 and some change. claiming 9 and 5 (tax exempt pretty much) my take home was 200 dollars. had I been claiming the correct amount it would have been less than that. I can't pay rent on less than 200 a week.


idunno1234
by Silver Member on Jul. 6, 2013 at 11:12 AM
1 mom liked this

Cut and paste:

Labor leader: Koch brothers are behind Michigan right-to-work law

, @resnikoff
5:22 PM on 12/07/2012

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Union workers hold up a signs during a rally outside the Capitol in Lansing, Mich., as Senate Republicans introduced right-to-work legislation in the waning days of the legislative session. (Photo by Carlos Osorio/AP)

Union workers hold up a signs during a rally outside the Capitol in Lansing, Mich., as Senate Republicans introduced right-to-work legislation in the waning days of the legislative session. (Photo by Carlos Osorio/AP)

The day after Michigan's legislature held an abrupt vote on right-to-work legislation, United Auto Workers President Bob King blamed the influence of the Koch brothers, Charles and David, as well as "the extreme right wing."

"In the end, [Michigan businessman] Dick Devos and the extreme right-wing control what's going on in the state," King told Detroit radio station WDET. "And the Koch brothers' Americans for Prosperity was in there, and there was a lot of money all pushing for the passage of this legislation, threatening the governor, threatening the different representatives."

King also said that Republican legislators had been bullied into voting for the bill. "The stories we were told by Republicans, who I'm sure won't admit to it publicly...was that they were threatened, that they would have a primary challenge from the Tea Party." He suggested that the same threats had been made against Republican Gov. Rick Snyder, who recently announced his support for a state right-to-work law after previously opposing the idea.

Scott Hagerstrom, the state director for Americans for Prosperity's Michigan operation, denied the charges, saying, "People may have done that, but that was not Americans for Prosperity." He said that he was "surprised, but very pleased" by Thursday's vote.

According to the non-partisan Michigan Campaign Finance Network, David Koch gave a total of $988,604.44 to the Republican Governors Association Michigan PAC in 2010, the year when Snyder was elected governor. Of the PAC's donors, 98% were from outside Michigan. Americans for Prosperity also erected tents in front of the Michigan capitol before the right-to-work vote, and the Michigan Freedom Fund aired radio and television ads in favor of the legislation that day.

"If you do that, you've been planning it for a while," said Gordon Lafer, an expert in American labor law. He said that well-funded conservative interest groups had likely been laying the groundwork for a right-to-work vote in Michigan for some time. He also said that the campaign in Michigan was part of a nationwide battle against the labor movement.

"Right-to-work bills were introduced in about 20 states in 2011 and 2012," he said. "This is part of a campaign to get rid of unions for both economic and political reasons."

idunno1234
by Silver Member on Jul. 6, 2013 at 11:13 AM
2 moms liked this

The Koch brothers are largely behind all the anti-union shit.  It has nothing to do with what they think is good for the country and everything to do with what is good for their own little billionaire pockets.

colins_mom
by Member on Jul. 6, 2013 at 11:50 AM
and whats effed up is we have a union thatbis behind the cuts! th
e cuts, they say that because we are part time that we shouldn't be working 40 hours, so corporate said no more full time slots, hire more people and cut hours.


Quoting blues_pagan:

Sorry, I can't believe that is happening to you. I have a friend here from a right to work state and he hated it as well.  It was horrible working conditions.  Thankfully he moved back up here to New England where the laws are sane.  


And I just want to use this as an example to those in the other post who support "right to work".  THIS is what happens to the employees.  But of course who cares about them...right?

Quoting colins_mom:

im in.MI, I.freaking HATE the right to work crap. because of it my hours at work got cut DRAMATICALLY. like from averaging 36-40 hours to they will not let me work more than 24 hours a week. once i hit 24 hours I.have to go home, I can't come in early, I can't stay late, if someone calls off I.can't get called in etc. we can not switch shifts with people etc. I can no longer afford to pay my bills and rent etc. my phone will be shut off on Monday and then I am up a shit creek with out a paddle as none of the places I put in apps for a second job will be able to contact me. I freaking hate it. its messing with my ability to work as I can't get to my job (can't afford gas and upkeep of insurance and maintenance on my car) and my job won't be able to call me. I still make too much for PA so I can't even feed my kid after they take taxes out of my check. my before taxes check this week was 299 and some change. claiming 9 and 5 (tax exempt pretty much) my take home was 200 dollars. had I been claiming the correct amount it would have been less than that. I can't pay rent on less than 200 a week.


grandmab125
by Platinum Member on Jul. 6, 2013 at 1:03 PM
6 moms liked this

 Put the blame where it belongs....on Obamacare.  Companies all over the country are cutting their employee's hours to keep them under that magic number of 30 hrs per week.  Under 30 hours and they don't have to provide any kind of health insurance.  Be glad you don't work for one of the many companies that have fired people so they can be below that other magic number 50.  If a company has 49 or fewer employees, they aren't subjected to Obamacare rules.

Quoting colins_mom:

and whats effed up is we have a union thatbis behind the cuts! th
e cuts, they say that because we are part time that we shouldn't be working 40 hours, so corporate said no more full time slots, hire more people and cut hours.


Quoting blues_pagan:

Sorry, I can't believe that is happening to you. I have a friend here from a right to work state and he hated it as well.  It was horrible working conditions.  Thankfully he moved back up here to New England where the laws are sane.  

 

And I just want to use this as an example to those in the other post who support "right to work".  THIS is what happens to the employees.  But of course who cares about them...right?

Quoting colins_mom:

im in.MI, I.freaking HATE the right to work crap. because of it my hours at work got cut DRAMATICALLY. like from averaging 36-40 hours to they will not let me work more than 24 hours a week. once i hit 24 hours I.have to go home, I can't come in early, I can't stay late, if someone calls off I.can't get called in etc. we can not switch shifts with people etc. I can no longer afford to pay my bills and rent etc. my phone will be shut off on Monday and then I am up a shit creek with out a paddle as none of the places I put in apps for a second job will be able to contact me. I freaking hate it. its messing with my ability to work as I can't get to my job (can't afford gas and upkeep of insurance and maintenance on my car) and my job won't be able to call me. I still make too much for PA so I can't even feed my kid after they take taxes out of my check. my before taxes check this week was 299 and some change. claiming 9 and 5 (tax exempt pretty much) my take home was 200 dollars. had I been claiming the correct amount it would have been less than that. I can't pay rent on less than 200 a week.


 

grandma B

idunno1234
by Silver Member on Jul. 6, 2013 at 1:38 PM

 Way too simple:

"Right-to-work" laws do not, as the short phrase might suggest, aim to provide a general guarantee of employment to people seeking work, but rather are a government regulation of the contractual agreements between employers and labor unions that prevents them from excluding non-union workers,[1] or requiring employees to pay a fee to unions that have negotiated the labor contract all the employees work under."

Fascinating......a government regulation pushed through by the Koch brothers, the most anti-government people there are, with the sole intent of weakening union power.


Quoting grandmab125:

 Put the blame where it belongs....on Obamacare.  Companies all over the country are cutting their employee's hours to keep them under that magic number of 30 hrs per week.  Under 30 hours and they don't have to provide any kind of health insurance.  Be glad you don't work for one of the many companies that have fired people so they can be below that other magic number 50.  If a company has 49 or fewer employees, they aren't subjected to Obamacare rules.

Quoting colins_mom:

and whats effed up is we have a union thatbis behind the cuts! th
e cuts, they say that because we are part time that we shouldn't be working 40 hours, so corporate said no more full time slots, hire more people and cut hours.


Quoting blues_pagan:

Sorry, I can't believe that is happening to you. I have a friend here from a right to work state and he hated it as well.  It was horrible working conditions.  Thankfully he moved back up here to New England where the laws are sane.  

 

And I just want to use this as an example to those in the other post who support "right to work".  THIS is what happens to the employees.  But of course who cares about them...right?

Quoting colins_mom:

im in.MI, I.freaking HATE the right to work crap. because of it my hours at work got cut DRAMATICALLY. like from averaging 36-40 hours to they will not let me work more than 24 hours a week. once i hit 24 hours I.have to go home, I can't come in early, I can't stay late, if someone calls off I.can't get called in etc. we can not switch shifts with people etc. I can no longer afford to pay my bills and rent etc. my phone will be shut off on Monday and then I am up a shit creek with out a paddle as none of the places I put in apps for a second job will be able to contact me. I freaking hate it. its messing with my ability to work as I can't get to my job (can't afford gas and upkeep of insurance and maintenance on my car) and my job won't be able to call me. I still make too much for PA so I can't even feed my kid after they take taxes out of my check. my before taxes check this week was 299 and some change. claiming 9 and 5 (tax exempt pretty much) my take home was 200 dollars. had I been claiming the correct amount it would have been less than that. I can't pay rent on less than 200 a week.


 


 

DSamuels
by Gold Member on Jul. 6, 2013 at 1:41 PM
3 moms liked this
Lots of places are moving to more part time instead of full time employees because of benefits, especially with Obamacare coming up. This is nothing new, or because of right to work laws.

Quoting colins_mom:

and whats effed up is we have a union thatbis behind the cuts! th

e cuts, they say that because we are part time that we shouldn't be working 40 hours, so corporate said no more full time slots, hire more people and cut hours.




Quoting blues_pagan:

Sorry, I can't believe that is happening to you. I have a friend here from a right to work state and he hated it as well.  It was horrible working conditions.  Thankfully he moved back up here to New England where the laws are sane.  


And I just want to use this as an example to those in the other post who support "right to work".  THIS is what happens to the employees.  But of course who cares about them...right?

Quoting colins_mom:

im in.MI, I.freaking HATE the right to work crap. because of it my hours at work got cut DRAMATICALLY. like from averaging 36-40 hours to they will not let me work more than 24 hours a week. once i hit 24 hours I.have to go home, I can't come in early, I can't stay late, if someone calls off I.can't get called in etc. we can not switch shifts with people etc. I can no longer afford to pay my bills and rent etc. my phone will be shut off on Monday and then I am up a shit creek with out a paddle as none of the places I put in apps for a second job will be able to contact me. I freaking hate it. its messing with my ability to work as I can't get to my job (can't afford gas and upkeep of insurance and maintenance on my car) and my job won't be able to call me. I still make too much for PA so I can't even feed my kid after they take taxes out of my check. my before taxes check this week was 299 and some change. claiming 9 and 5 (tax exempt pretty much) my take home was 200 dollars. had I been claiming the correct amount it would have been less than that. I can't pay rent on less than 200 a week.


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