Bacon's Rebellion

Democracy Thrives in Sunlight

Want to Help Workers Work? Keep Virginia’s Right-to-Work Law

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by

James A. Bacon
in ,

by Chris Braunlich

Are a majority of Democratic candidates for the Virginia General Assembly “anti-worker?” Based on their response to a Virginia Chamber of Commerce survey, it would seem that way.

General Assembly candidates were surveyed on whether they would support Virginia’s Right To Work (RTW) laws. Republicans were unanimously supportive. Democrats were almost equally opposed to retaining the Commonwealth’s 72-year-old law, with only five responding they would keep it.

The “comments” section of the survey betrayed the ignorance of many candidates about the advantages of Right To Work, portraying the law as a Dickensian throwback pitting businesses against workers with some citing a questionable recent Oxfam survey (see column by Chris Saxman) ranking Virginia low on “best state for workers.”

The truth shows a very different picture. Study after study demonstrates that a state Right To Work law improves not only the opportunity for a worker to have a job, but also drives personal incomes higher.

These considerations are important. Republicans and Democrats alike have expressed concern about Virginia’s reliance on the federal government for jobs, whether directly or indirectly through federal contracting. Only by building and maintaining a robust manufacturing and high tech sector will Virginia retain, for example, CNBC’s ranking of Virginia as “Best State for Business.” In doing so, CNBC cited Right To Work laws as a factor.

The issue of a state’s labor laws is important to businesses of all stripes, and is among the reasons Amazon reversed its decision to build a second headquarters in New York City. Despite $ 3 billion in state subsidies, the tech giant walked when told by officials in the Big Apple that $150,000-a-year tech workers would have to join a union.

Simply put: Right To Work laws are attractive to employers. And without employers, there are no employees.

What does the evidence show? Do Right To Work laws help businesses or workers? The answer to both is “yes.”

In a May 2018 study, Dr. Jeffrey Eisenach, Managing Director at National Economic Research Associates and an adjunct professor at George Mason University, examined data comparing economic outcomes in Right To Work states with non-Right To Work states, noting “the data is consistent with, and thus supportive of, the results of more than four decades of rigorous economic research.”

Whether private sector employment, the unemployment rate, manufacturing output or higher personal incomes businesses and workers in RTW states do better than those in non-RTW states. Between 2001 and 2016 …

• Private sector employment in RTW states grew by 27%, compared to 15% in non-RTW states.
• The annual unemployment rate in RTW states was, on average 0.4 percentage points lower than in non-RTW states. While four-tenths of one percent may not seem like much, if those non-RTW states had had the same unemployment rate as RTW states, there would have been 249,000 more Americans employed in 2017.
• Real manufacturing output rose by more than 30% in RTW states compared with 21% in non-RTW states.

The reason all this is important? According to Eisenach’s study, higher growth rates translate into higher personal income, rising 39% in RTW states vs. 26% in non-RTW states. This echoes a 2003 study conducted by Robert Reed for the Journal of Labor Research, finding wages 6.7% higher in RTW states than in non-RTW states.

Five states have passed Right To Work laws since 2012. Former union strongholds like Michigan, Indiana and Wisconsin have turned away from laws forcing workers into unions and those states have seen dramatic economic growth improving the condition of workers’ lives: In Indiana, factory payroll employment grew 9.4%; in Kentucky, $9.2 billion in new investments added 100,000 new jobs; in Michigan, the unemployment rate fell by 4.8%.

Virginia is in competition with each of those states for new business that will put more Virginia workers to work. Voters might well want to ask candidates favoring repeal of Right To Work why they want to put the Commonwealth at a competitive disadvantage … and in the process hurt the ability of workers to find a job and improve the lives of their families.

Chris Braunlich is president of the Thomas Jefferson Institute for Public Policy. He may be reached at chris@thomasjeffersoninst.org.

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15 responses to “Want to Help Workers Work? Keep Virginia’s Right-to-Work Law”

  1. fromthefuture Avatar
    fromthefuture

    Some background for your readers.

    The National Economic Research Associates appear to have their own agenda, or maybe they just adopt the agenda of the paying customers, such as the coal industry.

    And here is a bio of the good Dr.:
    Jeffrey A. Eisenach is an American economist. He is a visiting scholar at the American Enterprise Institute, and has a position with National Economic Research Associates, a consulting company.

    AEI is a neocon think tank.

    The George Mason Economics department is a Koch brothers subsidiary.

  2. TooManyTaxes Avatar
    TooManyTaxes

    Norman Ornstein, hardly a conservative, has worked at AEI for decades. Facts don’t count when you are “progressive.”

    1. LarrytheG Avatar
      LarrytheG

      TMT – I think if you look at the staff of the AEI and the range of articles it authors – it’s clearly not a centrist organization. It leans right and is associated with other groups on the right in it’s associations and dealings.

      How about detailing other groups you consider to be “centrist” and their positions on “right-to-work”?

      1. James A. Bacon Avatar
        James A. Bacon

        Yes, AEI leans “right” — in the free-market sense. But that doesn’t make it wrong. To be sure, one must be sensitive to AEI’s biases and take them into account when reading its research and op-eds, as as one would when appraise the research of a left-of-center environmental or social-justice group. But, again, that doesn’t make it wrong. You have this extraordinary idea, Larry, that all you have to do is label someone as right of center to discredit them. It saves you the trouble of confronting the facts they present and arguments they make.

        1. Steve Haner Avatar
          Steve Haner

          That’s not Larry’s idea. That is all the left usually has. On the rare occasions real data is handy, fine, but if not, attack the source as biased. At the end of the day, this is not an issue that moves many rank and file voters.

  3. fromthefuture Avatar
    fromthefuture

    The poster declares his conclusions as “the truth”. It’s important for readers to decide for themselves if there is an agenda and what it is.

    You appear to have a problem with that.

  4. LarrytheG Avatar
    LarrytheG

    “Right-to-work” is not just the one issue about non-union members and union dues.

    “Right-to-work” can involve other issues of workers rights whether they are union or not but those who advocate for “right-to-work” pretty much always “lead” with the union dues issue rather than bring in the other employee rights issues that unions defend which can include discriminatory treatment of workers and dismisal of workers arbitrarily without a fair process or an ability to appeal arbitrary treatment.

    In other words, employers prefer to be able to dismiss workers “at will” – without regard to any process so that, for instance, a bad boss can get rid of a good employee or force employees to do things that are not ethical or legal in order to keep their jobs. This is especially true with lower income service workers and employers who claim workers are “independent contractors”

    Most folks, understandably, will agree that workers who do not belong to the union should not have to pay union dues – but that’s not the whole story at all – it’s just the aspect that advocates like to represent as “right-to-work”.

    To say that a state like California “suffers” economic harm as a result of “right-to-work” is laughable given the fact that it’s the 5th largest economy – IN THE WORLD – far larger than every other state in the US – INCLUDING those right-to-work states! Are we saying it could be number 1 if they had “right-to-work” laws? 😉

  5. Peter Galuszka Avatar
    Peter Galuszka

    NERA? Even more Koch’s? Snore!

  6. vaconsumeradvocate Avatar
    vaconsumeradvocate

    Sadly, this is yet another twist of the “right to work” issue. Saxman’s twist of the Oxfam report attempts to allow folks to ignore the facts that we do have problems in Virginia. Our businesses are allowed to run over consumers on a regular basis both in our roles as workers and purchasers of goods and services.

    Often, unless you look at something very closely, like Oxfam did, it is hard to see problems. We need to be looking for win-win situations and stop insisting on winner take all. Right now the worker/consumer is almost always in the position of being forced to take what is given and pay what is required to do that without any negotiating allowed. Too many people think that’s OK.

    If both businesses and consumers/workers could win, we’d all be in a better place.

  7. musingsfromjanus Avatar
    musingsfromjanus

    “In other words, employers prefer to be able to dismiss workers “at will” – without regard to any process so that, for instance, a bad boss can get rid of a good employee or force employees to do things that are not ethical or legal in order to keep their jobs.”

    Dead wrong! As is the progressive practice of suggesting in idea is illegitimate because its proponent might be “right of center” or associated with “right of center” organizations.

    Anyone employing people today knows that dismissing a worker must be done with a background of copious documentation and demonstrated processes of” fairness” or risk being buried by lawsuits from a plethora of government agencies with unlimited funds to harass and destroy your business. That process grows exponentially if the employee is one of the mushrooming protected classes.

    Employers can not even get a usable reference and are prevented by a variety of laws from even determining if they are contemplating the hire of a criminal or serial incompetent.

    The vast majority of businesses, particularly small businesses, provide a far better work environment and benefits than would be the case in a unionized environment. I have presided over a conglomerate of companies, mostly non-union and one unionized. The employees of the unionized wanted to decertify but the unions and the Democrats in those states have made that almost impossible.

    Parenthetically, touting California as some model of worker paradise is a ridiculous red herring. The labor economy there is built on illegal and immigrant workers and Davis-Bacon Act idiocy that it is a card house whose crash will be extraordinary.?

  8. Peter Galuszka Avatar
    Peter Galuszka

    Musings. Total BS! Virginia is a hire and fire state.

  9. TooManyTaxes Avatar
    TooManyTaxes

    Larry, in a RTW state, people can join a union if they want to join. It’s just that they cannot be made to join or pay the equivalent in union dues. Businesses can still recognize a union and agree to bargain collectively. Similarly, a union can attempt to organize a business’ employees as permitted by federal labor laws. There are unionized businesses in Virginia and other RTW states. There are non-union companies in non-RTW states.

    I worked for Northwestern Bell Telephone Company that covers five states, four of which are RTW states. Iowa, Nebraska, North Dakota & South Dakota. Only Minnesota was mandatory pay-the-union state. But most non-management employees were in the Communications Workers of America. The union and the company bargained collectively. The union went on strike. (They made me a directory assistance operator). The union filed grievances and took disputes to arbitration. I tried several cases. But, except in Minnesota, every non-management employee had the right to decide whether or not to join the union. The union had to be responsive to worker desires in order to attract members. It tried to do that and was largely successful. What’s wrong with that? Please tell me why a person should be made to pay money to a labor union in order to work? What’s the difference between mandatory union dues and the Mob’s protection rackets where businesses and workers need to pay protection money to stay open or keep their jobs?

    And what’s wrong with an organization leaning right? We see all sorts of left-wing organizations, including environmental groups. We see references to articles in the NYT and WP and they are to the left of Bernie Sanders and with a lot less honesty. Did you see where a Times’ reporter has just been caught spiking written evidence that contradicted Senator Warren’s claim of pregnancy discrimination? The good thing about the media is that it makes used car salespeople seem honorable.

    vaconsumeradvocate What does RTW have to do with consumer issues? I don’t see the connection. I regularly complain when I have a problem with a purchase, be it goods or services. I usually am able to get a reasonable solution. If I can’t and the issue is big enough, I file a complaint with a government agency. Think robocalls.

    I negotiated a fair price for a car my son bought last December (financed by the Bank of Dad). This last spring my wife and I negotiated a fair price for a house we are renting out. One cannot negotiate grocery prices but, in August, when we were in Cape Cod, the grocery gave us the frequent customer discount even though we didn’t have the card.

    At the same time, my law firm often negotiates discounts with clients. Maybe you need to study up on negotiating skills. I’ve taken a few courses over the years and found them to be quite valuable. I’m a lot better negotiator than I was years ago.

  10. vaconsumeradvocate Avatar
    vaconsumeradvocate

    Consumers are also workers. If our marketplace was fair to consumers, workers would benefit and thus businesses would benefit.

    Interesting that you would raise the issue of robocalls. I’ve spent much of today dealing with fake consumer protection for robocalls. Sadly, we are a very long way from getting protection but a lot of people are claiming progress.

    The industry has even been put in charge of the FCC’s Consumer Advisory Committee, on which I serve. There is not a level playing field between consumers and industry today and consumers are disadvantaged over and over.

  11. Dick Hall-Sizemore Avatar
    Dick Hall-Sizemore

    I am not going to jump into the philosophical discussion over RTW. There are legitimate arguments on both sides and I have already recognized those, as well as staked out my position. https://www.baconsrebellion.com/virginia-may-repeal-right-to-work-law/#comments Rather, I want to take issue with some of the misleading or wrong assertions made by Mr. Braunlich, without any evidence to back up those assertions.
    1. “Study after study demonstrates that a state Right To Work law improves not only the opportunity for a worker to have a job, but also drives personal incomes higher.” Maybe so, but there are other studies that come to contrary conclusions, such as in RTW states, the average wages and per capita income go down. (See https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1027987 and https://www.epi.org/publication/right-to-work-michigan-economy/)
    2. “Despite $ 3 billion in state subsidies, the tech giant [Amazon] walked when told by officials in the Big Apple that $150,000-a-year tech workers would have to join a union.” That is just wrong and nothing but a scare tactic. No government can make a worker join a union. Nor can any government unilaterally force a company to recognize and deal with a union. The workers themselves have to agree to unionize.
    3. The post relies heavily on one study, which associates some selected positive economic factors with RTW states. The implication is that these positive outcomes are the result solely of RTW. There is no mention as to whether these conclusions are based on a correlation analysis in which all other possible factors were held constant (eliminated as contributing to the result). A recent analysis has concluded that it is difficult to separate the effect of right-to-work laws from other economic factors. (See https://econpapers.repec.org/paper/nlvwpaper/1101.htm.)

    Supporting RTW laws on the basis of ideology or philosophy, i.e. individual freedom, is a legitimate position, but making assertions that are wrong or that rely on misleading statistics is not acceptable.

  12. Jonathan Wight Avatar
    Jonathan Wight

    From what I’ve read, Amazon did not leave New York for reasons having to do with Right to Work. Amazon spokespeople stated they had not anticipated the negative backlash to their plan. Local New York activists worked to keep Amazon out.

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