Economic Benefits of Right to Work Syndicate content

Economic Crisis Brings Even Greater Importance to Job-Producing Right to Work Laws

Recently the National Institute for Labor Relations Research released a new fact sheet that shows the numerous economic advantages associated with Right to Work states.

As the Fact Sheet details, Right to Work states have significant advantages in many areas including:

  • Percentage Growth in Real Personal Income
  • Growth in Real Manufacturing GDP
  • Percentage Growth in Construction Employment
  • Growth in Number of College Graduates (age 25+ with B.A.)
  • Percentage Growth in Number of People/Children Covered by Private, Employer Based Health Insurance

And all those advantages are just icing on the cake. After all, the best reason for Right to Work protections is eliminating the injustice of firing employees for refusal to join or pay dues to a union.

That injustice has recognized by as wide a range of people as...

Thomas Jefferson who said: "To compel a man to furnish funds for the propagation of ideas he disbelieves and abhors is sinful and tyrannical," and

Samuel Gompers, founder of the American Federation of Labor who said: "No lasting gain has ever come from compulsion."

Quick Hits: SEIU Union Boss Corruption, Card Check Lies, and More

A few Right to Work-related updates from around the web:

1.) The Heritage Foundation's Foundry blog helpfully summarizes the corruption allegations surrounding Tyrone Freeman, head of California's SEIU chapter. What's worse, union mismanagement goes all the way to the top. According to the LA Times, SEIU national brass received word of Freeman's corrupt practices six years ago and still failed to act. (This is the same local union against which Foundation attorneys won a federal court settlement securing the return of almost $10 million in illegally seized forced union dues.)

Read the whole entry here.

2.) The New York Sun featured a great editorial yesterday on union bosses' half-hearted efforts at workplace "representation." Money quote:

But even as unions promote counterproductive economic policies, and push for legislation allowing them to essentially force more workers into their ranks, a look at union finances shows that many unions aren't looking after the members they already have — especially their retirement plans.

The Sheet Metal Workers International Union says prominently on its Web site that "Union Members Have Strong Retirement Plans."

But it turns out — as disclosed in unions' mandatory annual financial reports to the Labor Department — that the Sheet Metal workers' union pension plan is underfunded and so risks the future pensions promised to its members. Many other union pension plans are in similar straits.

This isn't an isolated incident, either. Check out the rest of the article for an in-depth look at the glaring disparity between union bosses' lavish salaries and the shortfalls facing rank-and-file workers' pension funds.

3.) Townhall.com has an article up on unions' efforts to ram the misleadingly-titled "Employee Free Choice Act" down workers' throats. The piece also mentions the Foundation's efforts to hold the SEIU accountable for a questionable political fundraising scheme:

In fact, alleged coercion for political gain is already occurring. Recently, The Wall Street Journal reported that the National Right to Work Legal Defense Foundation asked the Department of Justice to investigate the Service Employees International Union (SEIU). The basis for the request centers on this fact:

“The union adopted a new amendment to its constitution at last month's SEIU convention, requiring that every local contribute an amount equal to $6 per member per year to the union's national political action committee. This is in addition to regular union dues. Unions that fail to meet the requirement must contribute an amount in ‘local union funds’ equal to the ‘deficiency’ plus a 50% penalty.” (The Wall Street Journal, 7/28/08)

Can you name any other company or organization that could compel its membership to fund political organizations that rank and file membership may or may not agree with?

For more information on the Foundation's efforts to deter illegal union campaign fundraising, check out here, here, and here.

Another Survey Says Right to Work Fosters Economic Growth, Job Creation

A recent survey of New Jersey job providers featured some interesting conclusions. It turns out that current state policies have discouraged new businesses from setting up shop:

Such findings have given the state a national reputation as inhospitable to industry. In 2007, the Small Business and Entrepreneurship Council rated New Jersey last among states to foster small-scale operations. This year, the nonpartisan Tax Foundation said the state was second to last on its tax-climate index.

So what's an economically stagnating state to do? Here's some sound advice:

"It is not about the broader economy. It is about the poor choices New Jersey has made," said Philip Kirschner, president of the business association...

"As for legislation and policy reform, he said, New Jersey could adopt other states' successful models.

"North Carolina's economy, for instance, grew from agriculture and manufacturing to include tourism, technology and finance, some well-served by research universities. Unlike New Jersey, it is a Right to Rork state - in which union membership is not compulsory..."

Surprise, surprise!  Incidentally, here's CNBC's recent ranking of "America's Top States for Businesses" in the workforce category.  What do the leading states all have in common?  Every one is a member of the Right to Work club.

Of course -- first and foremost -- Right to Work is about employee freedom in the workplace, but much to the chagrin of union bosses, rolling back coercive union power has undeniable economic benefits as well.

 

 

The Denver Post: Still Clueless About Forced Unionism

As Patrick Semmens pointed out recently, Denver Post columnist Al Lewis got quite an earful for suggesting that workers are rarely dissatisfied with compulsory union representation. But at least Al has the grace to admit he was wrong. In a recent post, he acknowledged that "unions make workers pay."

His colleague Bob Ewegen, on the other hand, is an unrepentant forced unionism propagandist. In a recent column, he trots out the same tired talking points in defense of non-Right to Work states' supposed economic vitality:

If you're lucky enough to find a job at all, the only right the Coors plan gives you is the right to work for less. Quite a bit less, actually. The U.S. Bureau of Labor Statistics reports that an average worker in the 22 states with right-to-work laws earns about $7,131 a year less than workers in free bargaining states ($30,656 versus $37,787). Nationwide, union members earn $9,308 a year more than non-union workers, $41,652 versus $32,344.

A little fact-checking is in order. As noted in this recent post, economically-dynamic Right to Work states enjoy lower taxes, lower housing costs, cheaper goods, and better services. In fact, if you adjust workers' salaries for relative costs of living, employees clearly make more money in Right to Work areas.

Ewegen further suggests that Right to Work states are struggling economically -- rather than serving as powerhouses of job and standard of living growth.

Quoting out of context statistics is a neat -- albeit intellectually dishonest -- rhetorical trick. Most Right to Work states are concentrated in the South, a region that has historically endured lower rates of economic growth than the rest of the country. Now, however, these states boast higher rates of growth than their non-Right to Work counterparts. What's changed? As this analysis demonstrates, states that embrace Right to Work principles enjoy substantially better economic performance.

And these trends show no signs of letting up. According to one blogger, the past several years have seen Right to Work states continue to register better economic performance than their non-Right to Work neighbors.

Quick Hits -- June 10, 2008

A few Right to Work-related updates from around the Internet:

1.) Over at "The Next Right," blogger Soren Dayton has an interesting post up about the implications for Right to Work if a union stooge wins the White House. Money quote:

This vision is about coercively moving more and more Americans into political organizations which use their precious financial resources in a way that they neither control nor even understand.

The entry also offers a compelling indictment of the SEIU's reliance on "card check" organizing drives. Check out the rest of the post here.

2.) The Detroit News has published a rebuttal by Foundation President Mark Mix to a union operative's misleading editorial on the economic benefits of Right to Work policies. Here's the letter's conclusion:

While the moral case for a right-to-work law rests on the principle
that no worker should be compelled to join a union against his or her
will, the economic benefits of protecting employee freedom are also clear. Michigan lawmakers would do well to heed the example of their more prosperous right-to-work neighbors when contemplating what to do about the Wolverine State's economic woes.

Read the whole thing here.

Michigan Union Boss Makes Fact-Free Case Against Ending Forced-Dues Gravy Train

The Detroit News has just published a remarkably fact-free op-ed on the economics of the Right to Work issue. Given the author makes his living from Big Labor's forced dues gravy train (he's a treasurer with the Michigan Regional Council of Carpenters & Millwrights) which is partly responsible for Michigan's ongoing economic nightmare, it's no wonder he would be alarmed by the talk of cancelling union bosses' compulsory union dues privileges in Michigan.

The author starts out with this mind-boggling passage:

"Undeniably, having Michigan become a "right-to-work" state would be bad for workers, helping dismantle freely negotiated wage standards and benefits, as well as worker protections, in many industries. In right-to-work states, nonunion members can opt out of paying union dues, even though they receive all the guarantees and protections of the existing union contract under which they work." [Emphasis added]

Freely negotiated wage standards? Really? Is that what they are calling the system of mandatory bargain-or-be-prosecuted federal labor policy? Warehousing employees into collective bargaining units doesn't result in "free" anything, and to suggest otherwise is Orwellian double-talk.

The article continues:

"The reality is that "right-to-work" is not just a union issue. Our modern Michigan economy is in many ways "indivisible." For example, the strength and quality of our outstanding Michigan health care sector relies on the earned health care benefits of workers across many employment sectors, union or nonunion, skilled trade or service worker, blue collar or white.

Similarly, pension funds (whether defined benefit programs negotiated by labor unions in both the public and private sectors, 401(k) and similar plans provided by private employers or individual retirement accounts) are invested directly in our community, while their management supports the financial services sector of our Michigan economy."

Union officials' corrupt history of pension fund management should immediately give Michiganders pause. And the union record on health insurance is hardly better. Take the Michigan Education Association, for example. The Association's health insurance plan forces Michigan taxpayers to subsidize a bloated, uncompetitive payment scheme whose shady accounting procedures have been linked to union political activism.

The article concludes by citing some bogus report issued by Jeff Vincent, research director of the Indiana University Division of Labor Studies' Institute for the Study of Labor in Society.

Vincent's study conveniently ignores Right to Work states' comparative advantages in both higher real earnings and lower average costs of living. In other words, workers' paychecks go a lot further in economically dynamic Right to Work states because the goods they purchase are significantly cheaper.

At this juncture, it's worth noting that the moral case for Right to Work principles is entirely separate from the issue of material prosperity. Here at Freedom@Work, we believe that employees everywhere have an inalienable right to choose whether or not to associate with a union, regardless of anyone's feelings or the perceived economic benefits of collective bargaining. But it's also nice to know that study after study has validated the significant economic, job-creating advantages of Right to Work policies.

The Right to Work Advantage

As we've said before in this space, defending the rights of employees' not to be forced to pay dues to get or keep a job is the right thing to do no matter the economic ramifications. Fortunately though, there are economic benefits to protecting employees' Right to Work, as many studies by the National Institute for Labor Relations Research have found.

And a new paper released yesterday by the Michigan-based Mackinac Center, again confirms the Right to Work economic advantage:

In the key metrics of economic growth, Right to Work states have a distinct advantage when it comes to unemployment rates, income growth, population increases and jobs.

You can read the Mackinac paper in its entirety here. The paper also looks at the devastating economic impact that forced unionism has had on Michigan.

The Foundation's sister organization, the National Right to Work Committee, reports that it is increasingly gaining traction in efforts to pass a Right to Work law through the Michigan legislature.

Freedom Pays Off

Supporting free choice for employees would be the right thing to do, even if it didn't have economic benefits, but fortunately there are significant economic advantages to Right to Work.

The chart below is from the cover story of the latest National Right to Work Committee newsletter, and shows that Right to Work states create new jobs more than twice as fast as forced-union-dues states.

 

Right to Work Spurs Job Growth

 

WSJ: Repeal of Right to Work Laws High on Union Officials' 2008 Agenda

 

Today's Wall Street Journal points out that union officials are pouring upwards of a billion dollars, much of it in compulsory dues, into the 2008 election cycle. The goal? A sea change of American labor law.

"This is an all-in bet for them in 2008," says Mark Mix, president of the National Right to Work Committee, a group that fights down in the trenches against coercive union power. "As market cycles go, they're in their peak, we're in our trough, and they're looking for a clear two-year run" in an all-Democrat Washington.

Then there's the crown jewel:

Tucked into the 1947 Taft-Hartley Act is a provision called 14(b), which allows for "right to work" states. Big Labor last took a run at deleting this section, and forcing more unionization, in the Johnson administration.

Aside from abolishing employees' free choice of whether or not to join or pay dues to a union, wiping the current 22 state Right to Work laws off the map would deal a crushing blow to the American economy.

According to a recent study by the National Institute for Labor Relations Research, forced unionism cost the American economy upwards of $436 billion in GDP between 2000-2006 alone.

The yoke of compulsory unionism already takes a severe toll on states without Right to Work laws, the last thing America needs is to expand its reach.

Compulsory Unionism Keeps Eating Away at Rust Belt Jobs

Columnist Thomas Sowell points out in an op-ed today the harmful effects of bad economic policies on job creation in "rust belt" states:

In short, the rust belts have been killing the goose that lays the golden eggs.

He concludes:

Jobs are always disappearing. The big question is why they are
not being replaced by new jobs. Rust belt policies that drove out old
jobs also keep out new jobs.

Chief among these harmful policies is compulsory unionism. According to a National Institute for Labor Relations Research fact sheet, Right to Work states outperform forced unionism states, which include all of the rust belt, on a litany of economic growth indicators.

Most notably, with regard to job growth, non-farm private sector job growth in Right to Work states nearly doubled that of forced unionism states between 1996-2006. NILRR also notes that Real Personal Income growth also was nearly double in Right to Work states between 2001-2006.

Sounds like the golden goose has fled for greener pastures.

 


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