Right-to-Work Laws Could Come to a City Near You
No one likes having taxes taken out of paychecks. But in 26 states, in addition to taxes, union dues are deducted from some employees’ paychecks—even though these employees are not union members, have no desire to be union members, and receive no benefits from unions. Such is life in states without Right-to-Work (RTW) laws. In the 24 states with RTW laws, employers cannot require an employee to pay union dues as a condition of employment.
RTW laws benefit both employers and employees. Economic growth is higher in states with RTW. From 2004-2013, real GDP growth was 17 percent in RTW states, compared to just 10 percent in non-RTW states. Even unions might benefit from RTW. According to Bureau of Labor Statistics data, from 2004 to 2013 total union membership rose by 0.5 percent in RTW states but declined by 4.6 percent in non-RTW states.
Can cities in non-RTW states pass their own RTW laws? The answer is yes, thanks to a Supreme Court ruling in 1963. Municipalities seeking to make their business climate more friendly for job creators may find RTW laws to be a plausible option.
According to a new report by Heritage Foundation Senior Policy Analyst James Sherk and Legal Fellow Andrew Kloster, the Supreme Court ruling that upheld state RTW laws also allows local governments to pass their own RTW laws. Retail Clerks Local 1625 v. Schermerhorn upheld Florida’s right-to-work law, which made it illegal to force nonunion employees to pay union dues and initiation fees.
A Supreme Court ruling from 1963 is not news, but the continuation of slow growth and a weak labor market make the ruling relevant to 2014. The U-6 unemployment rate, the broadest measure of the unemployment rate from the Bureau of Labor Statistics and a more accurate depiction of the labor market than the official unemployment rate, stands at 12.2 percent—still nearly 4 percentage points higher than it was in December 2007. States with RTW laws experience higher rates of economic growth and employment.
Politicians in struggling cities in non-RTW states would do their residents a favor if they freed their labor markets from undue union influence. Political leadership in New York City and Los Angeles County, which have U-6 unemployment rates of 14.6 percent and 17.8 percent respectively, would be wise to be on the leading edge of local governments enacting RTW laws.
RTW laws have been shown to create jobs and economic growth in the states that enact them. Municipalities in states unwilling to pass RTW laws should take the initiative and pass their own laws. At best, new jobs will boost economic growth and make the city the envy of their region. At worst, there will be temporary uncertainty over whether the law is legal before courts make the ultimate determination. As well as hosting Labor Day parades on Monday, cities in non-RTW states across America should help their workforces by passing RTW legislation.
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