Right to work laws in the United States don’t involve actual employment opportunities. It refers to legislation that prohibits a union security agreement between labor unions and companies. Anyone working in a unionized workplace is banned from negotiating contracts which require all members who benefit from the contract to contribute to the cost of representation. This prohibits how unions can guarantee membership because it eliminates the requirement of fees, union dues, or membership as a condition of employment or after hiring.
A right to work law does not provide a general guarantee of employment for someone who seeks work. It is a government ban on contracts which require costs to receive union representation. There are 26 states which currently have this legislation on the books, with the U.S. Chamber of Commerce one of the leading lobbyists to make this a nationwide status. It is made possible thanks to the Taft-Hartley Act, which was passed in 1947.
The term was originally coined by Vance Muse, founder of the Christian American Association, who replaced the name after there was anti-union violence during the First Red Scare. The federal government still operates under open shop rules.
These are the pros and cons of right to work laws to consider.
List of the Pros of Right to Work Laws
1. It stops the issue of a worker losing their job over the cost of union dues.
“Union contracts frequently require employees to pay union dues or lose their jobs,” writes James Sherk, Research Fellow at The Heritage Foundation. “This forces workers to support the union financially even if the union contract harms them or they oppose the union’s agenda.” When there are right to work laws in place that govern the employment contract, then the union cannot impose a restriction on someone because they refused to pay fees or dues.
Workers opt out to save some money, and then they still get to benefit from the presence of representation. With right to work laws in place, you cannot be fired for not paying union dues.
2. It makes the union become less aggressive in their recruitment or exclusion efforts.
The presence of right to work laws can also reduce the financial benefit from organizing workplaces where unions might have little or no support. By passing this legislation, it makes the union become less aggressive with their recruitment practices because they cannot force people to join them any longer. A natural outcome of this advantage is that it can encourage new business investments, which can then create more jobs.
If a community or state is struggling with a high unemployment rate, then right to work laws can help to balance the equation. The new employment opportunities might not have the highest wages, but sometimes any job is better than no job.
3. It prevents union money from being used to support causes that workers reject.
Most unions require that you pay between 1% to 2% from your paycheck each period to support the representation benefits they provide. If you don’t allow this withholding or make the contribution, then there is the possibility that you could lose your job. Many workers reject unions or the political stance that the body takes, but opposing the agenda does not guarantee an investment for your fees.
During the average election in the United States, unions almost exclusively support Democratic candidates. About one-third of their members votes Republican in their election.
4. Right to work encourages more domestic and foreign investment.
Because there are lower capital costs to begin conducting operations in right to work states with the restrictions on union contracts, companies of all sizes in the United States and around the world target the areas where this legislation is active for their investment activities. One of the reasons why Boeing chose to expand in South Carolina instead of improving their property in the Seattle metro area was that the presence of right to work made it cheaper to do business.
When foreign automobile companies began making vehicles in the United States, most of them located their facilities in states like Tennessee, Mississippi, and Alabama because of their right to work laws. FDI increase in Idaho and Oklahoma are also tied to this legislation.
5. It creates more manufacturing jobs.
Because most of the right to work states are in the west or the south, there is no way to determine if unemployment and this legislation have direct links. What we do know is that when you compare a right to work country next to one which follows open shop, the manufacturing employment opportunities are more than 30% higher than they are in the states which do not limit union contracts.
Although the jobs pay less in right to work states despite some claims by advocates, the earnings are still relatively high. When you consider the cost of the union fees to the reduction in salary, the outcome is virtually the same.
6. This legislation brings more competition into the workplace.
States which permit right to work legislation often see a boost in economic growth, especially in the first five years of this changeover. The reason for this advantage is that employees can take charge of their salary bidding process instead of relying on union representation. Instead of being forced to follow along with the group voice, you get to become an advocate for yourself. This structure creates more opportunities over time because people can work hard and earn a salary which reflects their effort.
You are not bound by the terms of a collective bargaining agreement that might place seniority over the quality of the work performed when determining salary structures.
7. Unions are not the same today as they were in previous generations.
The formation of unions was needed during the early years of industrialization because there were virtually no regulations in place that governed employee contracts. Companies could offer unsafe conditions, force long hours, and even practice child labor in some situations. Unions helped to form a foundation of rules that would eventually become law so that the average worker would have a high probability of coming home safe.
Now that the government offers several workplace rules and regulations that oversee safety, the presence of a union primarily targets wages and benefits while lobbying politicians for certain privileges. Legislation has taken over their role, which is why right to work now adjusts their influence in the workplace.
8. Right to work can create reductions in property taxes.
Because public school employees are usually employed by the state, their contracts are often negotiated by a union in open shop areas. When right to work passes, then this responsibility shifts toward the teachers themselves. There are typically fewer cost increases that occur each year because of this benefit, which means property tax levies can stabilize. Although this issue can come at the expense of teacher salaries and encourage more turnover, families can usually save a bit each year on this expense.
9. It makes each worker become accountable for their own actions.
When there is union representation present and forced contract compliance for dues and fees, then there is no accountability for their actions in many circumstances. The representation they provide is in name only. Some unions even recruit shop stewards and employee negotiators to serve point on the common tasks of bargaining and grievances, which are generally unpaid positions.
Right to work ensures that a worker can take action against an underperforming union by cutting off ties without a threat to their job. They also have the right to pursue different representation if they prefer to stay unionized. You don’t have to stop being in a union if that is what you want. You’re just no longer compelled to have your employment tied directly to this status.
List of the Cons of Right to Work Laws
1. Unions lose money when workers aren’t compelled to pay fees.
Right to work laws do not prevent workers from joining a union, but it strongly discourages them from doing so since you can still receive the benefits of representation without paying for them with this legislation. Without the presence of a union, wages go down and problems with safety can rise. When Oklahoma and Idaho passed these laws, they saw a 15% reduction in union membership. With less money, there are fewer opportunities to negotiate for better wages, benefits, and other needs.
2. It reduces the ability of unions to organize.
When looking at the states who have already passed right to work laws, there is a 50% decrease in union organizing activities within the first five years of the legislation going into effect. Because the laws do not prevent workers who feel mistreated from unionizing, the structure of this idea encourages organizers to work only with those who are disgruntled instead of including everyone in the conversation.
It is true that a unionized firm creates lower profits, but it is because more of that money goes back to the workers. Some create fewer jobs and invest less as well for the same reason. Right to work shifts the priority from ensuring strong wages to the creation of robust profits.
3. Wages can be much lower in some right to work states.
When you compare the nationwide results of right to work states and open shop ones, then people who work in places where dues can be compelled earn 3.1% more than those where these contracts are not permitted. One of the reasons for this issue is the fact that union membership in the private sector is nearly double in open shop states as it is in a right to work area. There is no casual impact on job growth or unemployment when this legislation passes either.
It is no accident that as the overall income received by the middle class in the United States has lost value since World War II, union membership also declined. By restricting the bargaining capacity of workers, this legislation typically lowers tax revenues as well. According to date from the AFL-CIO, comparable wages from open shop states to right to work jurisdictions can be up to $5,500 lower.
4. It creates a high burden of labor for the union without compensation.
Right to work laws do not supersede the duty to provide fair representation to all workers in a place of business. That means employees can disagree with their dues and fees charged in a contract, but then still compel the union to represent them when they require services. You can still access the benefits of a CBA and follow the grievance process in this situation. That means the unions must work for all people despite some of them not financially supporting the tasks, which negates many of the value benefits that are present in a union environment.
5. You still have the same problem with lobbyists.
One of the goals of right to work legislation is to shut down the lobbyists that actively campaign using revenues from union fees and dues. The only problem with that approach is that there are also lobbyists who promote the opposite agenda, such as the Legal Defense Foundation and the National Right to Work Committee. Funding for their activities comes through the Olin Foundation, government programs, and private donations.
If the taxpayer money goes to fund some of the lobbying grants that promote right to work, how is that any different than having union dues do the same thing? This disadvantage shows that there can be more politics at work with this debate than actual pros and cons. People who support unions typically oppose right to work, and the opposite is also true.
6. Emergency service workers are usually exempt from right to work laws.
It is the public sector unions which represent administrative personnel that are usually targeted by right to work legislation. That means your social workers, teachers, and similar providers see less organization once these laws pass. Firefighters, law enforcement officials, and emergency medical technicians often receive an exemption from the stipulations in this law. Why should some state employees be forced to follow one set of standards that is different from what essential personnel follow.
7. Workers receive fewer benefits in right to work states.
When right to work laws govern employment contracts, then there are 2.5% fewer employers who sponsor healthcare insurance as a benefit to their workers. The rate of pensions as a benefit is 5% lower in comparable positions. There is less money spent on training, career advancement, educational assistance, and other common development expenses. Up to $2,500 less per worker gets put into the local economy because of this disadvantage, which can offset any of the potential economic gains that occur by the available of additional job opportunities.
This lack of benefits can lead to problems with safety in the workplace, despite the presence of best practices, regulations, and other various guidelines. According to data published by the U.S. Bureau of Labor Statistics, the rate of job-related injuries is 50% higher in right to work jurisdictions when compared to open shop locations.
8. It lessens the impact of the worker’s voice.
One of the primary arguments for right to work is that it offers employees to focus on their individual voice instead of creating a group voice with their co-workers. Although that might be an advantage for a strong-willed worker with robust leadership skills, the average employee can be brushed aside during their request for a raise, promotion, or better workplace conditions. You can guarantee that everyone on the management side of the equation is going to be on the same page, which means the advantage in any negotiation will always be with those in charge instead of the people who are doing all of the work.
9. Corruption does not stop just because of right to work legislation.
President John F. Kennedy condemned the corruption in the American labor movement over 50 years ago, but there is still evidence that racketeering, embezzlement, and organized crime influences are still present. There is no doubt that it exists.
Corruption in politics is still a problem in the U.S. as well. With the recent push toward right to work in the country, there has been an increase in government corruption simultaneously. Transparency International dropped the United States from being the 18th least corrupt country in the world in 2016 to being the 22nd least corrupt nation today. With threats to the system of checks and balances in the government and an erosion of ethical norms, one might say that it isn’t a union problem, but a human problem that exists.
Verdict on the Pros and Cons of Right to Work Laws
Right to work laws lost their competitive advantage when the numbers went from one state to almost 30 of them. If there were 49 jurisdictions which protect union security and one that does not, then many of the benefits of this legislation would be seen locally. Now that more than 50% of the country uses this structure, any competitive advantages from a domestic standpoint are gone.
Many of these laws moved higher-paying union manufacturing positions from the north into places in the south or west where lower wages and less organization were present. Instead of promoting job growth, it creates relocation.
The pros and cons of right to work laws do offer a unique foreign direct investment benefit when an organization wants to avoid high labor costs. If a union cannot compel workers to a specific action, then it does not have the power to demand a strike. That means more productivity, consistency, and an emphasis on experience and education instead of seniority. There are times when this policy works and instances when it does not, so we must be wise to recognize the difference.
Keith Miller has over 25 years of experience as a CEO and serial entrepreneur. As an entrepreneur, he has founded several multi-million dollar companies. As a writer, Keith's work has been mentioned in CIO Magazine, Workable, BizTech, and The Charlotte Observer. If you have any questions about the content of this blog post, then please send our content editing team a message here.