What do Arizona, Florida and Kentucky all have in common? What about North Carolina, Indiana and Utah? All of these states, along with 22 others, have right-to-work laws — statutes that govern security agreements between employers and unions. These laws don’t guarantee employment for people looking for work, but they do oversee contractual agreements between companies and workers. This legislation has its proponents and opponents, but do right-to-work laws help or hinder companies?
1. Right-to-Work Laws Boost Local Economies
Research shows that companies prefer to operate in locations that have right-to-work laws — something which boosts the local economy in these states. This means more job opportunities and a wider range of industries in some towns and cities. Right-to-work states have lower unemployment rates than unionized states, according to data from the U.S. Bureau of Labor Statistics. The job market also grew twice as much in right-to-work states than non-right-to-work states from 1990 through 2014. It’s no surprise, then, that 480,000 people moved to states with right-to-work laws between July 2015-July 2015 alone.
“Most companies want to avoid getting unionized,” says the public policy think tank The Heritage Foundation. “Workers in right-to-work states can still unionize. However, right-to-work reduces the financial incentives for unions to organize aggressively: they have less money on the line when workers can opt out. Consequently, right-to-work causes them to focus their energies on companies with dissatisfied workers. Workers in these workplaces are both easier to organize and more likely to pay dues if the union wins.”
2. No Mandatory Union Dues
In unionized states, workers have to pay mandatory dues — regular payments to fund union activities. Employees have no say in this matter, and these fees often take a chunk out of their monthly paycheck. Average union dues total $400, and unionized organizations cost between 25-35 percent more than non-unionized ones. Expect these fees to rise further as union organizers pay their officers higher salaries in the future.
In right-to-work states, on the other hand, workers have a choice. Employees don’t have to pay union dues to keep their jobs, and unions can’t use these payments as bargaining chips on behalf of their members. The government of Obion County — located in Tennessee, a right-to-work state — lists the benefits of right-to-work on their website. They say employees are “free to decide how to spend their own money” and “free to decide their own representation.” As a result, workers experience an overall higher standard of living and better employment opportunities.
3. Right-to-Work Laws Generate Higher Wages
Unionists say that right-to-work legislation lowers wages, but research suggests otherwise. Once Heritage Research Fellow James Sherk adjusted cost-of-living differences, he found private sector wages in right-to-work states and non-right-to-work states are practically the same.
One study goes even further and suggests that right-to-work laws have provided workers with higher wages. Real personal income in right-to-work states increased twice as much as non-right-to-work states from 1970 through 2013, according to economics emeritus professor at Ohio University Richard Vedder.
The right-to-work legislation reduces the incentive for unions to target your company. As a result, you can offer your employees more competitive wages, eliminate mandatory dues and boost the local economy.
Want to find out more about right-to-work? Check out UnionProof — positive employee relations made simple. Even better, educate your employees on what right-to-work laws do – for them, and for your company!