Right-to-Work Laws and Unemployment

The debate over right-to-work/forced unionism rages in Michigan where the Republican-led legislature is set to pass a right-to-work law (or what President Obama called a “so-called right to work law”).  All indications suggest that Governor Rick Snyder will sign the bill.  Unions there clearly “overreached” this past fall with their move to write collective bargaining protection into the Michigan constitution by a referendum.  This measure failed by a 58-42 margin.  Nice to see the legislature return the attempted favor.

But what impact will this move have?  One recent study from 2007 suggests one consequence will be reduced unemployment in the state.  In a piece titled, “Unions and Employment Growth: Evidence from State Economic Recoveries,” Robert Krol and Shirley Svorny find that “union power slows job growth during an economic recovery.” Therefore, removing forced unionism is likely to help Michigan recover quicker from downturns in a way that will actually benefit workers. 

Here is a graphic from the Chicago Tribune that shows the states with and without right to work laws.  Hmm…what seems to correlate with these laws? 

Right to Work States

 

 

 

 

 

 

 

 

 

HT: JS.

4 thoughts on “Right-to-Work Laws and Unemployment

  1. I strongly believe in right to work laws, mainly because I don’t think a union has any right to force people to join in order to work.

    However, I do think supporters of the law over sell it’s benefits. For one, studies have shown that while right to work states do have lower unemployment, they also have much lower wages. On the second note, it’s hard to really know what effect they do have. In many right to work states, and in the country as a whole, manufacturing is on a multi-decade decline. In many developed countries it’s the exact same story. Private sector union membership in America is around 7%, so it’s hard for me to buy into the idea that unions are a big threat to the economy. (Public sector unions are a different beast and should be treated as such.) One must ask what is the proper trade-off. I come from Kansas, which has very little regulatory burden whatsoever and I had to relocate to find decent employment.

    It’s not a simple unions=economic decline & non-unions=economic expansion model. And proponents of right to work should stop misleading the public with this line of logic. What makes a labor market healthy and robust is a multitude of factors and proponents should just call the laws what they are–union busting.

    1. I agree in part & disagree in part. I haven’t seen any studies showing RTW reduces wages across an economy. Clearly, to the extent that RTW reduces unions’ bargaining power, it reduces the earnings (wages plus benefits) of unionized workers — but that probably also means that less income is transferred from nonunionized to unionized workers. Poorer, less industrialized states were more likely to adopt RTW in the first place, so there is still a negative correlation between per capita income and RTW in the U.S., but over time per capita income in RTW states has tended to converge with that in non-RTW states.

      Manufacturing employment has been in decline, but manufacturing production has increased over time and remains very important to the overall U.S. economy.

      Private sector union membership is a bit lower than private-sector union coverage density, which is what really matters for economic outcomes. But you’re still right that RTW’s benefits should be moderate for the private sector.

  2. My problem is with forced unionism, not unions per se. I consider it an issue of the individual right to contract rather than a consequentialist one. However, the evidence suggests that there are very real costs, even if moderate, of forced unionism.

  3. Seems to me to be a question of justice. A great deal of the union dues go to supporting politicians. If you are a conservative or an independent, you may be certain that your dues are not being given to causes you approve of or support.

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