Transcript What`s Wrong with “Right to Work”?

What’s Wrong with
“Right to Work”?
Prof. G. Lafer
University of Oregon
September, 2011
©Copyright Gordon Lafer 2011
2011 Multistate Legislative Offensive
What is “Right to Work”?
RTW makes it illegal for any group of
employees to negotiate an agreement
with their employer that requires
everyone who benefits from a union
contract to pay their share of the costs
of administering that contract.
Key Findings
 RTW laws lower wages by $1,500 per year – for both
union and non-union workers alike.
 RTW decreases the odds of getting health insurance
or a pension through your job, for both union and
non-union employees.
 RTW has no impact whatsoever on improving job
growth.
 By lowering wages, RTW threatens job growth in
85% of the economy that is outside manufacturing.
Misleading Claims
“Right to work
states… have
lower rates of
unemployment.”
No relationship
between
“right to work”
and state
unemployment
rates
U.S. Bureau of Labor Statistics
June, 2011
Misleading Claims
(Chamber of Commerce)
“States with RTW
laws have
experienced above
average economic
growth, while states
without such laws
have seen below
average growth.”
United States
District of Columbia
Massachusetts
Connecticut
North Dakota
Vermont
New Hampshire
Louisiana
Virginia
Wyoming
South Dakota
New Jersey
Rhode Island
Maine
Maryland
New York
North Carolina
Mississippi
Alabama
South Carolina
Arkansas
Colorado
Tennessee
Nebraska
Florida
Minnesota
Texas
Georgia
Oklahoma
Washington
New Mexico
Kansas
Pennsylvania
Kentucky
Montana
Missouri
Iowa
West Virginia
Arizona
Delaware
Illinois
Utah
California
Wisconsin
Idaho
Hawaii
Oregon
Indiana
Ohio
Nevada
Michigan
Alaska
Growth in Per Capita Personal Income, by State, 1977-2008
120.0%
100.0%
80.0%
60.0%
40.0%
20.0%
0.0%
Data underlying Chamber of Commerce
analysis shows no relationship between
RTW laws and economic growth
If averages are all that matter,
Is Scandinavia the model?
Per capita income growth, 1977-2008
95%
90%
85%
80%
75%
70%
United States
Scandinavia
Source: BLS foreign labor statistics.
Why Averages Can’t Tell You Much:
Job growth by state name, 2000-09
4.0%
3.5%
3.0%
2.5%
2.0%
1.5%
1.0%
0.5%
0.0%
States starting w ith A -M States starting w ith N -Z
Average job growth, 2000-09. Source: US Bureau of Labor Statistics.
Variables Controlled For in Estimating Impact of "Right to Work" Laws
“Junk
Science”
versus
Rigorous
Analysis
EPI (2011)
Chamber/ Vedder (2011)
Demographics
Right to work indicator
Union indicator
x
x
x
Race/Ethnicity
White non-Hispanic
Hispanic
Asian
Other race/ ethnicity
x
x
x
x
Gender
x
Education
Some high school
Some college
Associates degree
College degree
Advanced degree
x
x
x
x
x
Age
Age Squared
x
x
Married
Hourly worker
Full-time worker
Metro area
x
x
x
x
Industry
Agriculture, forestry, fishing, hunting
Mining
Construction
Manufacturing
Transportation and utilities
Information
Financial activities
Professional and business services
Educational and health services
Leisure and hospitality
Other services
Public administration
x
x
x
x
x
x
x
x
x
x
x
x
Occupation
Management, business and financial occcupations
Professional and related occupations
Service occupations
Sales and related occupations
Farming, fishing, and forestry occupations
Construction & extraction occupcations
Installation, maintenance and repair occupations
Production occupations
Transportation & material moving occupations
x
x
x
x
x
x
x
x
x
Macro variables
Unemployment rate
Employment to population ratio
Population growth
Cost of living (PERI)
Cost of living (Missouri)
Age of state
x
x
x
x
x
x
x
x
x
Impact of RTW on wages & benefits
 RTW lowers wages by an average of $1,500
a year, after accounting for cost of living –
for both union and non-union workers.
 RTW worsens the odds of getting
employer-supported health insurance by
2.6% -- for both union and non-union
employees.
 RTW decreases the chance of getting an
employer-supported pension by 4.8% -- for
both union and non-union employees.
Since RTW was adopted, over 100
Oklahoma firms have closed their doors
due to low-wage competition abroad.
Oklahoma manufacturing before and
after “Right to Work”
RTW
adopted
The number
of new firms
coming to
Oklahoma
each year
has fallen by
one-third
since the
state passed
RTW.
Measuring the Success of RTW in
Boosting Oklahoma Job Growth
RTW not key for auto companies
Right-to-work
was neither
“a positive or a
negative” for
Toyota’s location
decisions.
Dennis Cuneo,
Director of Site Selection
Toyota of North America
Top 10 states for high-tech companies
 Massachusetts
 Washington
 Maryland
 New Jersey
 Connecticut
 Delaware
 California
 Virginia
 Colorado
 New York
Every $1 million in wage cuts
results in an additional
six jobs lost
in the local economy.
Rights not supported by
Chamber of Commerce
 Whistleblower rights for coal miners worried
about safety.
 Protection for repetitive motion injuries.
 Sick leave for food service workers with H1N1.
 Paid family leave.
 Not being forced to attend one-sided meetings on
politics or religion, on work time, if they conflict
with your personal beliefs.
 Not being fired for having a bumper sticker
supporting a candidate your employer opposes.
Rights Gained Through Unions
 Right to elect representative leaders and to vote on
proposals for changing workplace policy.
 Right to voice your political and religious views
without fear of retaliation.
 Right to be promoted if you prove you have the
qualifications.
 Right to complain about safety conditions without
fear of punishment.
 Right to retirement security.