Right-to-Work Laws Have More Benefits over Unions
March 10, 2015
Yesterday, Wisconsin became the 25th right-to-work (RTW) state after adopting laws that prevent unions from forcing workers to pay dues as a condition for employment. Democrat legislators argue RTW would lower wages in Wisconsin, yet, right-to-work laws have little effect on private-sector wages. Besides, right-to-work states have 1.3 percentage point lower unemployment rates than non-right-to-work states.
A recent Gallup poll finds widespread support for right-to-work. Respondents said they support RTW by a 71 percent to 22 percent margin. Right-to-work laws can have the following advantages:
- Right-to-work laws protect a workers' freedom. In the absence of RTW, unions force workers to purchase their representation. They collect dues no matter how well or poorly they represent them. Forced dues also compel Wisconsin workers to support highly politicized organizations. RTW ensures workers do not have to give their money to groups whose agenda they oppose.
- Right-to-work laws have economic benefits such as attracting new business and jobs. A recent study found the unionized firms were 10 percent points more likely to go out of business within seven years. Academic studies find businesses make RTW laws a major consideration when deciding where to locate. Business development consultants also report that roughly half of their clients will not consider locating in a non-RTW state.
- The harm to non-union workers outweighs the economic gains to union members. The negative side of unions outweighs the positive side, at least with respect to resource allocation and efficiency. While unions harm businesses\' profitability, they also hurt low-income and middle-income workers. To the extent RTW weakens unions, economists would expect it to slightly increase overall living standards.
- Workers in right-to-work states have unemployment rates averaging over a percentage point less than comparable workers in non-RTW states.
Souce: James Sherk, "How Unions and Right-to-Work Laws Affect the Economy," Heritage Foundation, February 24, 2015.
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