Introduction
“Right to work state” is a concept that refers to a state that has enacted laws that give individuals the freedom to choose whether to pay dues to a union or not to pay as a prerequisite for employment. The right-to-work (RTW) laws protect workers from being coerced into joining unions and paying certain dues as a requirement for employment. According to Section 14(b) of the National Labor Relations Act (NLRA), states have the authority to create and implement laws that give individuals the aforementioned protection.
In jurisdictions that have these laws, employees can work in workplaces that have worker unions, but choose not to join them or pay the dues that members are expected to pay. Moreover, they can revoke their membership and retain their jobs. Right-to-work laws ensure that non-members of labor unions enjoy equal representation, even though they do not take part in union activities. On the other hand, employers are barred from either coercing employees to join unions or setting union membership as a requirement for employment.
Currently, 28 states have enacted these laws, and they are “right-to-work states”. They were enacted either through a constitutional provision or by the implementation of statutes. States that have these regulations adopted them at different times. They include Alabama (1953), Arizona (1946), Arkansas (1947), Florida (1944), Georgia (1947, Idaho (1985), Indiana (2012), Iowa (1947), Kansas (1958), Kentucky (2017), Louisiana (1976), Michigan (2012), Mississippi (1954), Nebraska (1946), Nevada (1951), North Carolina (1947), North Dakota (1947), Oklahoma (2001), South Carolina (1954), and South Dakota (1946) (Collins, 2014).
Others include Tennessee (1947), Texas (1947), Utah (1955), Virginia (1947), West Virginia (2016), Wisconsin (2015), and Wyoming (1963) (Collins, 2014). Florida and Texas had to revise their regulations after adoption through their respective constitutions. Some states were right-to-work jurisdictions, but had the laws either repealed or invalidated, thus revoking their status.
History of “Right to Work State”
The history of the “right to work state” concept can be traced back to the 1940s after the enactment of the National Labor Relations Act (NLRA), also referred to as the Wagner Act. NLRA was signed into law in 1935 by President Franklin D. Roosevelt as part of the second installment of his New Deal initiative. The legislation accorded companies several options with regard to employee union membership: a closed shop, a union shop, an agency shop, and an open shop (Collins, 2014). Under closed shop, union membership was a prerequisite for employment, and the loss of membership was followed by dismissal for one’s job.
Under a union shop, a company was allowed to hire individuals under the provision that they would join a union within a specified period of time (Collins, 2014). An agency shop allowed employees to choose not to join a union, but pay for representation. An open shop gave employees the freedom to choose either to join a union or not to join (Collins, 2014). The rules of the Act were implemented and enforced by the National Labor Relations Board. In a 1937 ruling of the Supreme Court of the United States in NLRB v, Jones & Laughlin Steel Corp, the legality of the National Labor Relations Act was upheld.
Certain parts of the Wagner Act were repealed by the passage of the Labor Management Relations Act of 1947, also known as the Taft-Hartley Act. For instance, the closed shop was outlawed, and the powers and activities of labor unions were constrained significantly (Sloane & Witney, 2009). Section 14(b) of the legislation allows states to criminalize agency and union shops as employment requirements for individuals working in their jurisdictions (Sloane & Witney, 2009).
In that regard, many states began to enact laws that illegalized the union shop, agency shop, and closed shop arrangements, thus becoming right-to-work states. Section 164 of the Act gave states the authority to outlaw union security agreements and the compulsory union membership as a requirement for employment (Sloane & Witney, 2009). These provisions laid the ground for the passage of right-to-work laws. For instance, within 12 months of the Act’s enactment, 12 states had enacted a form of RTW legislation.
Currently, the system is adopted in 28 Americans states. The federal government adopts the open shop model, even though a large portion of its employees belongs to unions. Originally, the Act only applied to states and did not allow cities and counties to create their own laws (Sloane & Witney, 2009). However, a 2016 ruling by the Sixth Circuit Court of Appeals allowed local jurisdictions to enact their own right-to-work rules in Tennessee, Kentucky, Ohio, and Michigan. In 1944, Florida passed the right-to-work legislation and became the first “right to work state” (Collins, 2014). It was followed by Arizona and Nebraska, and after that, several others followed suit. Since then, many jurisdictions have passed these laws through constitutional amendments. In the last two decades, several states have earned the “right to work state” status: Oklahoma, Indiana, Michigan, Wisconsin, West Virginia, Kentucky, and Alabama.
Arguments for “Right to Work State”
The concept of “right to work state” is a controversial issue that is based primarily on the effect of right-to-work laws on employee welfare. The debate includes the arguments of the opponents and proponents of the legislation. Several studies have been conducted to evaluate the effects of RTW regulations on aspects such as wages, unionization, and free riding.
Freedom of Choice and Association
The most basic argument for the support of “right to work state” is the freedom that employees enjoy of whether to join a union or not. Proponents of right-to-work laws argue that it is the right of employees to decide whether joining a union is beneficial to them or not (Sloane & Witney, 2009). According to Shields (2019), it is a violation of their right to compel them to join a union in order to get employment. Employees in “right to work states” are not barred by law to join a union. However, they are given the free will to join if they deem them beneficial and refrain from joining of they perceive them as unimportant (Collins, 2014).
In that regard, it is the responsibility of the unions to find creative ways of encouraging employees to become members. According to proponents, giving employees the free will to choose is better than forcing them through legislation. This has made unions more proactive because, in order to keep them alive and increase membership, they have to act in the interest of employees by negotiating for higher wages, safer workplaces, and equality (Shields, 2019). The Constitution of the United States gives every citizen the right to freedom of association: an individual has the right to join or leave a group without any form of coercion (Collins, 2014). In that regard, compelling an employee to be part of a collective bargain is violating their constitutional right of freedom of choice.
Increased Accountability
Proponents of the “right to work state’ argue that the enactment of right-to work laws bring more accountability to unions; the unions are weaker and less powerful. In states that do not have right-to-work regulations, unions are very powerful and they have low accountability because they do not need to entice employees in order to increase their membership numbers (Sloane & Witney, 2009). Therefore, union monopoly leads to poor representation because every member is required by law to pay their dues. On the contrary, unions in the ‘right to work state” have to go the extra mile in the provision of services to employees (Jones & Shierholz, 2018).
Since employees have a right to revoke their membership if they are unsatisfied with their union’s services, unions are compelled to be pro-employees and offer excellent representation (Collins, 2014). In order for them to grow their membership, they have to prove to employees that their services are worth paying for.
Supporters of “right to work states” argue that the majority of unions are corrupt, as the members’ contributions are rarely used for the intended purpose. For example, a large portion of union finances is used to support the campaigns of certain politicians in exchange for support and endorsements (Feigenbaum et al., 2018). These activities do not benefit members in any way because political campaigns are not part of collective bargaining. Therefore, the lesser the number of members a union has, the lower the amount of contributions to political initiatives (Feldacker, 2000). Corruption is minimized because unions do not have the money to fund politicians in exchange for favors (Jones & Shierholz, 2018). Moreover, member’s contributions are not used to support agendas that are contradictory to their personal values.
The Protection of Employment
In states that do not have right-to-work laws, an employee could lose their union membership if they fail to pay their dues. Consequently, dismissal from a union could lead to job loss because union contracts usually contain such provisions Shields (2019). In such cases, employees support their unions against their will for fear of losing their jobs. Collins (2014) contends that this compliance hurts them because they have to pay the dues even if they do not support certain union initiatives or if the contract is unsuitable. In “right to work states,” employees cannot face restrictions from unions on certain matters because the laws protect them from such occurrences (Jones & Shierholz, 2018).
Many employees opt out of membership or refrain from joining unions altogether because they get equal representation as those who pay the union fees Collins, B. (2014). The protection of an employee’s job due to failure to pay union dues is a sufficient reason for more states to enact right-to-work laws. An advantage of right-to-work legislation is that they place several restrictions on union contracts, thus attracting both domestic and foreign investments.
The commencement of operations in states that do not have right-to-work laws is costly because of the high capital costs that originate from union contracts Collins, B. (2014). For example, Boeing chose to introduce its services in South Carolina rather than expand its services in Seattle because the former is cheaper with regard to running a business. Research has shown that states that have right-to-work laws such as Alabama, Tennessee, and Oklahoma attract more foreign direct investment (FDI) than those that do not have the regulations.
Arguments against “Right to Work State”
The Creation of Weaker Unions
One of the main arguments offered by opponents of “right to work state” is that it renders unions weak and unable to organize effectively because of decreased membership. Surveys have shown that right-to-work laws have a negative effect on unions; within the first five years, the organizing activities of unions decrease significantly, by approximately half. Chava et al. (2020) contend that measuring the strength of a union is difficult. However, they provide empirical evidence that is consistent with decreased union strength to show that RTW laws weaken unions’ bargaining power. After the passage of these statutes, the number of collective bargaining agreements decreases significantly and the free-rider problem intensifies (Chava et al. 2020).
The regulations compel some establishments to de-unionize, thus weakening the bargaining power of unions (Jones & Shierholz, 2018). The laws do not prevent workers from unionizing and fighting for their rights. In that regard, unions are left to work with a small number of employees, which is not as effective as working with a large number.
Unions play several roles, including negotiating on behalf of employees, advocating for safer workplaces and higher wages, and protecting workers against illegal termination. Voluntary membership means that unions have fewer members and their bargaining power is lower (Feldacker, 2000). If this continues for an extended period, unions might become extinct and workers might not get any representation. Unions depend on members’ contributions to fund their collective bargaining activities. According to Jones & Shierholz (2018), RTW laws weaken unions, and consequently, affect the middle class negatively income decreases immensely.
Surveys have shown that the rate of unionization in “right to work states’ is lower. For example, union membership is as low as 5.2 percent among private-sector workers in these areas when compared with 10.2% membership in jurisdictions without them (Jones & Shierholz, 2018). The regulations discourage individuals working in the private sector from joining unions. For example, in Oklahoma, RTW laws reduced private-sector unionization by 30.6 percent after their enactment (Jones & Shierholz, 2018). This drastic change is proof that the “right to work state” concept has a negative influence on unionization.
Lower Wages and Benefits
“Right to work states” are criticized and opposed because they create a ground for lower wages compared to areas that do not have right-to-work laws. A study conducted by Chava et al. (2020) sough to find out the economic impact of these regulations based on corporate policies and collective bargaining agreements in the US. They analyzed 19, 574 collective bargaining agreements in the US from states that implement right-to-work laws between 1988 and 2016. The findings of the study revealed that RTW statutes had a negative effect on the wages of workers who were covered by collective bargaining agreements after their enactment.
This can be attributed to the reduction of financial leverage by employees, and an increase in investment and job opportunities (Chava et al., 2020). Moreover, companies that require a large amount of labor for its operations reported higher profits, increased executive compensation, and higher dividends that lead to lower wages. These findings are supported by Jones & Shierholz (2018) who claim that RTW laws result in lower wages for both union and non-union employees.
In a “right to work state”, the average worker earns 3.1 percent less in hourly wages than their counterpart in jurisdictions that do not have RTW regulations (Jones & Shierholz, 2018). Moreover, the workers enjoy fewer benefits, including pensions and employer-sponsored health insurance. A decline in wages and benefits eradicates competition for qualified workers between unionized and nonunionized employers. This trend sets a standard for lower wages and benefits that spills over to the entire industry, thus affecting numerous occupations (Jones & Shierholz, 2018).
Increased unionization of economic sectors compels employers who are not union members to increase their wages so that they can attract and retain highly-qualified workers. For example, according to Rosenfeld et al. (2016), the decline of unionization has lowered the wages of nonunion workers in the last three decades. In industries that have strong unions, nonunion workers benefit immensely because unions create a high standard for wages and benefits than nonunion employers adopt (Rosenfeld et al, 2016). In that regard, it is important for states to encourage unionization in order to mitigate the problem of wage stagnation and build wage growth.
The Promotion of Free Riding
Opponents of the “right to work state” concept argue that it encourages free riding among employees who are nonunion members because they enjoy free representation. Bono-Lunn (2021) notes that RTW laws increase the problem of free riding by approximately 54%. Many employees prefer to enjoy free union representation without the pressure of paying dues, thus propagating the aforementioned problem. Free riders lower unionization rates in two main ways. First, they render the organization and maintenance of union become more expensive as contributions decline and free representation increase (Bono-Lunn, 2019).
Second, higher numbers of free riders weaken the bargaining power of unions because of decreased financial resources, thus leading to a decline in demand for collective bargaining services (Bono-Lunn, 2019). According to economic theory, RTW laws destroy unions by encouraging free riding, thus reducing the bargaining power of unions (Jones & Shierholz, 2018). Opponents of the “right to work state” concept argue that it is unethical for a worker to enjoy representation without contributing to support the activities of the union. Anyone who benefits from union representation should pay for it, otherwise, unions become weaker as they need financial resources in order for them function effectively.
Conclusion
The “right to work state” concept should be adopted by more states through the enactment of RTW laws because it promotes the welfare of employees. First, it respects and protects every worker’s constitutional right of freedom of association. Every American should be able to join or leave a group voluntarily without any external coercion. Forcing employees to join unions through laws is an overt vitiation of their freedom of choice.
Moreover, an employee should be able to join or revoke their union membership without the risk of losing their job. Some unions support political initiatives that members do not agree with. Therefore, workers should have the freedom to withdraw their support from unions that support political agendas that are contrary to their values. The “right to work state” is also important because it attracts both domestic and international investments, increases accountability in unions, and protects the jobs of workers.
References
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Carrell, M. R., & Heavrin, C. (2004). Labor relations and collective bargaining: cases, practice, and law. Pearson Prentice Hall.
Chava, S., Danis, A., & Hsu, A. (2020). The economic impact of right-to-work laws: Evidence from collective bargaining agreements and corporate policies. Journal of Financial Economics, 137(1), 451-469. Web.
Collins, B. (2014). Right to work laws: Legislative background and empirical research. Congressional Research Services. Web.
Feldacker, B. S. (2000). Labor guide to labor law (4th ed.). Pearson Prentice Hall.
Feigenbaum, J., Hertel-Fernandez, A., & Williamson, V. (2018). From the bargaining table to the ballot box: political effects of right to work laws. National Bureau of Economic Research, Working Paper 24259. Web.
Jones, J., & Shierholz, H. (2018). Right-to-work is wrong for Missouri. Economic Policy Institute. Web.
Rosenfeld, J., Denice, P., & Laird, J. (2016). Union decline lowers wages of nonunion workers. Economic Policy Institute. Web.
Shields, M. (2019). Right-to-work means right-to-freedom. Mackinac Center for Public policy. Web.
Sloane, A. A., & Witney, F. (2009). Labor Relations. Pearson Prentice Hall.
