Saturday, January 28, 2012

The Right to Work in America

Sources:

National Right to Work Legal Defense Foundation

NY Times: Right-to-Work Laws

NY Times: Some Good Economic News, But Will it Last?

Reuters: Europe Searches for Mythical Jobs and Growth Formula

WSJ: Indiana Moves Closer to Right-to-Work Law


For the first time in over half a century there is a heated debate in the United States over right-to-work laws. This issue appears to be a result of the global economic crisis, as similar debates are being waged across Europe regarding the proper scope of labor protections and ways to create new jobs in ailing economies through labor market reform. U.S. right-to-work laws, which currently exist in twenty-two states, prohibit employers and labor unions from requiring—as a condition of employment—workers to join unions or pay union dues without joining the union. The laws are directed at protecting a person’s ability to secure a job without being bound by labor contracts or union membership. Most of the twenty-two states that have right-to-work laws on the books are states with limited labor union involvement, and it has been over a decade since any state enacted such legislation.


Proposed legislation in Indiana stands to change all that. Indiana—a state with significant union membership—is on the verge of enacting right-to-work legislation that would ban contracts requiring all employees to pay union dues, irrespective of membership. The debate in Indiana has developed along party lines, with Republican lawmakers standing firmly behind the bill, while democrats are attempting to delay its likely passage. In light of the economic recession, high unemployment rates, and fierce competition between states to lure employers within their borders, the debate in Indiana has prompted national interest as states look for ways to stem job losses and stimulate economic growth.


Proponents of Indiana’s right-to-work laws base their argument on the idea of employment liberty—the ability of a laborer to independently negotiate the terms of his or her employment. They also argue that the law will provide a greater incentive for businesses to relocate to Indiana, as non-union wages are generally significantly lower than similar union-negotiated positions, thus the cost of doing business in Indiana would be lower than in states with stronger union presences. Employers in favor of the legislation point to the fact that without right-to-work laws, unions drive up wages through collective bargaining and reduce the number of jobs available. Opponents of the legislation claim it would lead to lower wages, sub-standard working conditions, weaker unions, and negatively impact the economy. Lower wages limit consumer purchasing power and drive down demand for goods and services. When demand for goods and services declines, employers cut jobs as a result of reduced manufacturing and service outputs. Opponents further argue that right-to-work laws negate the labor relations laws enacted in the U.S. in the 1930’s, which protect the rights of workers, their ability to form unions, and place laborers on more equal footing with their employers.


While the debate in Indiana continues, the issue of national right-to-work legislation has taken hold and will likely become a topic for debate among presidential candidates as the upcoming election draws closer. Although Europe finds itself grappling with similar labor reform issues, no clear solution has emerged that would assist U.S. policy-makers. Ultimately, the economics of labor relations may matter more than the argument over workers’ rights. With many states facing significant budget deficits and slow economies, right-to-work legislation may offer a much needed economic stimulus.

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