According to a Bureau of Labor Statistics report released Tuesday, right-to-work regions have significantly more job opportunities, when to compared to non right-to-work states.
In a nutshell, the policy, which has passed in 24 states, outlaws forced union dues as a condition of employment.
The report breaks down all states into four categories, Northeast, Midwest, West and South. The report shows that the South, which has 12 right-to-work states, has the highest rate of job openings. The Northeast on the other hand, which has no right-to-work states, has less than half the number of job openings.
Additionally, the Midwest has the second highest number of right-to-work states, slightly more than the West. The two have alternated between having more job openings dating back to January of last year.
While supporters point to the increased job growth as an example of why the policy is beneficial, opponents argue it hurts workers and the economy in other ways. According to an Economic Policy Institute report by Heidi Shierholz and Elise Gould, the policy increases employment, but conversely, decreases wages and benefits.
“In this economic climate, something called right-to-work legislation sounds positive, but the name is misleading: these laws do not guarantee a job for anyone,” the report noted. “In fact, they make it illegal for a group of unionized workers to negotiate a contract that requires each employee who enjoys the benefits of the contract terms to pay his or her share of costs for negotiating and policing the contract.”
“This provision directly limits the financial viability of unions, reducing their strength and ability to negotiate favorable contracts, higher wages, and better benefits,” the report continued. “Similarly, by diminishing union resources, an RTW law makes it more difficult for unions to provide a workers’ voice on policy issues ranging from unemployment insurance to workers compensation, minimum wages, and other areas.”
James Sherk, a senior policy analyst in labor economics at The Heritage Foundation, countered the free-rider claim by noting unions actually represent nonunion members voluntarily. Under the National Labor Relations Act, unions can choose to negotiate contracts covering only dues-paying members so long as they decide to be members only as opposed to exclusive bargaining representatives.
The report by EPI also concludes wages and benefits suffer in states that have adopted the policy.
“Once we control for our comprehensive set of both individual and state-level observable characteristics, we find that the mean effect of working in a right-to-work state is a 3.2% reduction in wages for workers in these states,” the report notes. “We also find a 2.6 and 4.8 percentage-point reduction in employer-sponsored health insurance and employer-sponsored pensions, respectively.”
Sherk argues that when cost of living is factored into the equation, there is no wage reduction.
“Average wages in right-to-work states are indeed slightly lower than in non-right-to-work states,” Sherk noted. “This occurs because almost every Southern state has a right-to-work law and the South has a lower cost of living.”
“Studies that control for differences in costs of living find workers in states with voluntary dues have no lower — and possibly slightly higher — real wages than workers in states with compulsory dues,” Sherk concluded.
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