Everyone Benefits from the Right to Work

right-to-work-statesConservative New Jersey has always had a policy of offering our site as a place that any conservative may use to express their opinion on the issues of the day. Today we have “Everyone Benefits From The Right To Work” by Rich Miner.

In addition to Right-to-Work (”RTW”) Laws being morally correct, there are advantages to the RTW Laws for both employees and employers.  News coverage usually points to the obvious advantages to businesses of letting employees choose whether or not to join a union, but leaves out the advantages to the employees.  A recent survey of CEO’s ranked states in which they would like to do business on a variety of measures.  All of the states in the top 10 were RTW States.  Not one of the states in the bottom 20 was a RTW State.  In the ‘worst states for jobs’ list, New Jersey came in 45th out of 50.   For most expensive states, New Jersey came in 5th highest, above even New York.

Economists have noted that RTW States have more labor force flexibility, faster economic growth, higher employment, greater inward migration, lower living costs and higher real compensation.  In the ten RTW States rated the best in the nation, private sector employment increased 10.6% from 2000 to 2010, while in the 10 compulsory-unionism states rated the worst in the nation, which included New Jersey, employment increased just 1.9% over the same period.  It is obvious the increase in employment and greater labor force flexibility, due to the absence of strict union rules, together with lower cost of living in RTW States, helps employees.  RTW Laws are win-win laws for both employees and employers.  See, “More ‘Raspberries’ For Compulsory Union Dues,” National Right To Work Newsletter (”NRWN“), June 2112, p.1.  New Jersey has suffered net outward migration and its high taxes, high living expenses, forced-union dues and excessive regulations are all part of the cause.

Overall, the Commerce Department’s Bureau of Economic Analysis (the “BEA”) reported that from 2000 to 2011 private-sector, nonfarm employment increased 12.5% in RTW States, while in forced union dues states such employment only increased 3.5%.  Thus, the increase in employment in the RTW States was nine percentage points higher than, or over 3.5 times as great as, in forced-union dues states.  “Right to Work States Have Superior Job Growth,” NRWN, Oct. 2012, p. 6.  All of the bottom ten states in job creation in that period did not have protection for their employees from forced-union dues and monopoly union representation.  Id.

The benefits of the new RTW Law in Indiana are already showing up in a stronger economy.  When Indiana was a forced-union dues state, it was one of the worst economic states in the country by several important metrics.  From 2000 to 2010 the BLS determined that Indiana’s private-sector payroll employment declined by 9.1%.  Just two other states, both forced-union dues states, did worse during that time period.  The Midwest’s forced-union dues states as a group experienced a dismal decline of 9.8% during that period.  However, during the same decade, the five Midwestern states with RTW Laws actually experienced a slight increase by an average of 0.5%.  “‘We’re Absolutely on the Right Track,’” NRWN, August 2012, p. 5.  During the first three months after Indiana’s new RTW Law took effect, Indiana’s private-sector payroll employment increased by nearly 73,000 or 3.0%, according to the BLS.  The gains were above the national average for that period.  Id. By September, the Labor Department data showed that the number of new private-payroll jobs in Indiana has increased by nearly 100,000 or 4.1% since Indiana’s RTW Law went into effect.  “Indiana Right to Work Statute Is Working,” NRWN, Sept. 2012, p.5.

Furthermore, the job growth is likely to continue.  Dan Hasler, the head of the Indiana Economic Development Corporation reported that fifty-seven companies have Indiana investment projects in the pipeline, which will bring $1.6 billion in new investment into the state.  Hasler also stated that many companies had informed his agency that Right to Work would be a factor in their decision on whether to locate jobs to Indiana.  Id.

Twenty-three states have passed RTW Laws.  Tennessee was one of the first, passing its law in 1947.  As a result Tennessee has been attracting new domestic and foreign businesses for years and become a major auto manufacturing hub.  Nissan opened its Smyrna, Tennessee plant in 1983 and moved its US headquarters to north of Nashville in the mid-2000’s.  It recently added 1,000 employees to its Smyrna plant and plans on adding 1,300 more in 2013.  Toyota has a parts facility in Jackson, Bridgestone Tire has its American headquarters in Nashville, and Volkswagen opened its only US plant in Chattanooga in 2010.  Even GM is reopening its old Spring Hill, Tennessee Saturn plant for additional production needs.  Tennessee has mainly been spared the mass layoffs, plant closures and bailout that affected the Detroit area.  Many groups credit the fact that Tennessee is a RTW State as the key advantage that saved it the pain that other parts of the country suffered.  Sean Higgins, “Tennessee Auto Industry Thrives Without Unions,” Investor’s Business Daily, 3/5/12, p. A1-A6.

RTW States not only have better job creation, they also have better compensation growth for the employees.  According to Commerce Department data, private-sector compensation (wages, salaries, benefits and bonuses) fell by 0.7% from 2001 to 2011 in then forced-union dues Indiana, while it rose by 6.4% nationwide.  Indiana and the six other Midwestern forced-union dues states experienced an aggregate real private-sector compensation decline of 2.7% during the same time period.  During the same decade, the five Midwestern RTW States achieved an increase in real private-sector compensation of 13.0%. “Indiana Right to Work Statute is Working,” Id. Superior job growth and superior compensation growth in the RTW States equals double win for the employees.  Effectively, under current Federal Law, an employer in a unionized company cannot offer merit-based pay increases or bonuses unless the union gives its permission or there is a federal finding of an “impasse.”  Mark Mix, “Union boss bargaining hurts our most productive workers,” The Washington Examiner, May 11-12, 2012.  In a country that became great because it was a Meritocracy, this Federal Law is downright Un-American.

Employees seem to appreciate that they are better off without being represented by a union.  In Wisconsin the membership in many of the state’s government unions plummeted within the first year after the adoption of Act 10, allowing employees to choose not to be in a public sector union.  According to the Wall Street Journal’s May 31 issue, membership in the Madison AFSCME Council 24 dropped from 22,300 to 7,100.  “Wisconsin Voters Rebuff Government Union Brass,” NRWN, July 2012, p.1 at p.2.  In another example, Nissan’s Tennessee plant workers rejected joining the UAW by roughly 2-1 in 1989 and 2001 and the UAW announced and then dropped an effort to unionize a foreign auto maker’s US plant last year.  ”Tennessee Auto Industry,” Id. at 2.

Right to Work Laws even affect the school-aged populations.  Apparently, parents believe that they would rather raise their children in RTW States for a variety of reasons, including more job opportunities, better compensation, workforce flexibility, better chances for job advancement, lower cost of living, better living environment, non-union schools and lower taxes.  Whatever the reasons, the top seven states with the biggest gains in school-aged population from 2000 to 2011 were all RTW States.  Six of the seven states that lost the most school-aged children were forced-union dues states.  Katrina-ravaged Louisiana was the only exception of a RTW State that lost school-aged children among those seven states.  In the aggregate, RTW States’ K-12 populations increased by 1.87 million or 9.2% since 2000, while forced-union states have seen their school-aged populations drop by 1.21 million or 3.7%.   Naturally, states that are losing school-aged children are also providing fewer opportunities for teachers to obtain employment, keep their jobs and achieve career advancement, and vice-versa in states that are experiencing growth in the population of school-aged children.  “Right to Work = Teacher Job Opportunities,” NRWN, Sept. 2012, p.3.

An example of union action being detrimental to the teacher employees took place in Ohio.   There a union referendum was able to repeal Ohio’s new RTW Law, by flooding the airwaves with misleading ads claiming Ohio’s new RTW Law would lead to massive layoffs of teachers.  In reality, the public sector layoffs in Ohio were much worse than they would have been had the law not been repealed, since the law did not reduce the money spent, but only permitted more prudent allocation of the money.  Furthermore, the Ohio layoffs were much worse than those that occurred anywhere in Wisconsin, where the RTW Law survived union challenges.  For example, the Cleveland School Board laid off 17% of the district’s school teachers in April 2012.  “Government Union Lobby Remains Formidable,” NRWA, July 2012, p. 3.

Many polls have consistently shown nearly 80% of the Americans who are regular voters support the Right to Work principle.  “Hoosiers Deliver Clear Message to Congress,” NRWN, Feb. 2012, p.3.  “[S]cientific surveys regularly show rank-and-file Democrats and Independents, as well as rank-and-file Republicans, overwhelmingly oppose compulsory unionism.” Id. The American people feel that forced unionism is morally wrong and that it is also a detriment to the economy.  “Major Right to Work Victory in the Midwest” Id. at p.2. The Republicans would do well with the general public to support the right of employees to work without being forced to pay union dues.

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