On March 9, Wisconsin Gov. Scott Walker signed a bill that turned Wisconsin into the 25th right-to-work state in the Union. Right-to-work laws protect private-sector employees from being forced to pay dues to unions as a condition of employment, even if they refuse to join the union.
This bill represents a continuation of Walker’s legislative programs addressing the role of unions in the state. In 2011, Walker signed Act 10, which eliminated collective bargaining rights for public sector employees.
While those on the left have decried Walker’s actions as a self-serving agenda of destroying the middle class through corporatist politics, the right has applauded what they see as common sense reforms that encourage business investment and economic growth. Despite the various conflicting opinions, one thing is certain: the debate surrounding unions is highly politicized and could use a dose of rationality.
One of the main justifications offered for passing right-to-work laws is that they produce more favorable conditions for economic growth. Does this assertion hold water?
A February report from the nonpartisan Wisconsin Policy Research Institute found that from 1970 to 2013, personal income rose almost twice as much in states that adopted right-to-work laws. Even when adjusted for population growth and other factors such as tax environment and educational attainment, these right-to-work states experienced faster economic growth. The report also concluded that these so-called anti-union laws can and have actually resulted in higher union membership in some states, as a result of the positive impact they have on economic growth.
On the other hand, the Economic Policy Institute, another nonpartisan think tank, found in February 2011 that wages in right-to-work states are on average 3.2 percent lower than in states without these laws. Are these lower wages enough justification to reject the validity of right-to-work laws? The answer is a resounding no, simply because these right-to-work states have higher per capita income despite having lower wages. That is not to say that valid economic arguments against right-to-work laws do not exist, simply that they are ultimately unpersuasive.
Along those lines, there is one thing I have learned from my time as an economics major, and one that the debate over the economic impact of unions reinforces: the truth of the old adage, “there are lies, damned lies and statistics.” While there are valid economic arguments to be made both for and against right-to-work laws, the debate cannot and will not be settled by economic arguments alone. From there, we must examine the values at stake.
First, let’s consider what the purpose of a union actually is. During the 19th century, the unionized labor movement gained traction as workers looked for ways to combat the poor pay, long hours and dangerous conditions that prevailed in many American factories. Now, unions exist primarily to advance the interests of their workers through better pay, benefits and working conditions. In other words, unions exist to serve workers.
Now, let’s apply this purpose to our consideration of right-to-work laws. One of the main objections to right-to-work laws is that they drain money from unions by allowing workers to avoid paying dues. Yet, if unions exist to serve workers and actually fulfill that function, why would workers not want to pay their union dues? If union leaders cannot simply rely on union members being forced to pay dues and instead must show concrete evidence of serving workers’ best interests, their accountability is increased. Thus, right-to-work legislation can actually serve to better align the interests of union leaders and union members, especially when unions are heavily involved in political activity.
Although the U.S. Supreme Court has specifically ruled that workers cannot be forced against their will to pay dues to finance political activity, workers in states without right-to-work laws can still be forced to decide between keeping their job and paying dues to an organization whose political activity they do not support. Union members therefore are not directly financing political action, but the requirement to pay dues provides more money overall to unions, freeing up funds for lobbying and campaign donations.
In other words, it is clear that right-to-work legislation results in more accountable unions that better represent their workers. In addition, the evidence strongly suggests that the economic benefits outweigh the economic costs. Although the timing of Walker’s move to sign the new right-to-work legislation seems somewhat disingenuous given his probable run for the Republican nomination to the presidency, the merits of the legislation still hold.