Right-to-Work Mythbusters

As Michigan voters begin to seriously consider a right-to-work measure as part of a solution to our stubborn one-state recession, opponents have already begun to spread stories about the law’s meaning and likely effects. Some of these tales may have a grain of truth to them; many will be just plain myths. As the state’s leading source of reliable information on labor policy, the Mackinac Center will be here to sort through the stories, recognize the truths and half-truths, and bust the myths.

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MYTH: Right-to-work laws prevent workers from organizing

SOURCE: Center for Policy Alternatives
www.mackinac.org/archives/2009/ Center_for_Policy_Alternatives_RTWFL.pdf

QUOTE: "Right to work laws inhibit the right to organize"

STATUS: FALSE

Right-to-work laws prevent the collection of mandatory union membership dues, but they do not affect the basic right to organize. Under the National Labor Relations Act, workers have the right to form and join unions of their choosing, bargain collectively and go on strike. None of these rights are affected by a right-to-work law.

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MYTH: Right-to-Work Does Not Create Jobs

SOURCE: Ron Gettelfinger Op-ed
www.mlive.com/grandrapids/stories/index.ssf?/base/news- 0/1198766760324330.xml&coll=6

QUOTE: "A campaign financed by outside interests that could result in thousands of lost jobs."

STATUS: FALSE

If there is one thing that can be said about right-to-work states, it is that they are a magnet for employers and jobs. Between 2001 and 2006 right-to-work states added jobs at more than twice the rate of non-right-to-work states.

Most union commentaries on right-to-work skip lightly over the whole job creation question, hoping that readers will be persuaded by promises of better pay and benefits without realizing that these promises are meaningless if there are no jobs available. The few that do address job creation resort to a number of gimmicks to make the right-to-work job creation advantage disappear.

One trick is to focus on manufacturing jobs, which are declining in nearly every state, to make right-to-work states look worse than they really are. For example, in the Op-Ed quoted above, UAW President Ron Gettelfinger states “since Oklahoma passed its so-called "right to work" law, the state has actually lost 22,000 manufacturing jobs.”

What Gettelfinger neglects to mention is that Michigan lost over 170,000 manufacturing jobs during that same period. If one looks strictly at manufacturing, right-to-work states are at least holding on to manufacturing jobs better. Between 2001 and 2006 non-right-to-work states like Michigan saw manufacturing jobs decline by 13.7 percent, while right-to-work states lost only 7.1 percent of manufacturing jobs.

When one steps back to look at the whole job market, right-to-work states hold a clear advantage. From 2001 to 2006 right-to-work states saw payrolls increase by 6.4 percent, while non-right-to-work states only increased payrolls by 2.9 percent. Michigan managed to lose 4.8 percent of its jobs during that same period.

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MYTH: Right-to-work laws automatically lower wages

SOURCE: Bill Bonds TV ad
www.wrongformichigan.org

QUOTE: "It’ll give companies the right to pay you less money"

STATUS: FALSE

A right-to-work law does not give employers any special rights; employers will not be able to unilaterally change employment contracts. Basic terms of employment — especially wages, benefits, hours and duties — will be unchanged. This is the case whether the contract is bargained collectively or individually.

There is some evidence that wages tend to be lower in right-to-work states, but this difference disappears when local cost of living is accounted for. In addition, incomes have been growing faster in right-to-work states. If recent trends continue, most right-to-work states will have a higher per-capita disposable income — even without accounting for cost of living — than Michigan by 2010.

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MYTH: Union Workers in Michigan do not have to pay for union politics

SOURCE: Wrong for Michigan, "The Truth About the Right to Work Scam"
www.wrongformichigan.org/Get_The_Facts.htm

QUOTE: "... under Federal law workers can never be forced to pay dues for union political activities."

STATUS: FALSE

In theory, the U.S. Supreme Court’s decision in Beck v. Communication Workers of America limits mandatory union dues to a worker’s pro rata share of the costs of collective bargaining, contract administration and grievance handling. In practice, getting an accurate reckoning of what a worker should pay involves running through a legal gauntlet that can cost thousands of dollars in legal fees. The union controls all the relevant records and is almost always extremely resistant to making them available to workers who do not support union politics. In the rare case where workers have successfully gotten a full reckoning, actual representation costs have been found to be as little as 10 percent of the union’s budget.[1]

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MYTH: Right-to-work laws are unfair because they allow workers to benefit from union representation without paying union dues

SOURCE: Center for Policy Alternatives
www.cfpa.org/issues/issue.cfm/issue/RightToWorkForLess.xml

QUOTE: "Right-to-work laws allow workers to enjoy a union’s services without paying dues. Not only does this discourage workers from joining the union, but it undermines worker solidarity."

STATUS: HALF-TRUTH

Right-to-work opponents rarely tell the whole story.

Under federal law, a union is required to represent all workers in a bargaining unit, including union opponents. In a right-to-work state, union opponents are not forced to pay for a union they do not support, giving rise to what right-to-work opponents call the "free rider" problem.

But the reverse also holds: union opponents must either accept a union’s representation in the workplace or look for work somewhere else. (Easier said than done in Michigan nowadays!) If a worker is dissatisfied with the way he has been represented, there’s little he can do about it — even if he’s paid thousands of dollars in union dues, and even if the union’s poor representation costs him a job. Forcing a worker to pay dues or fees for a union he does not support makes union officials less accountable to the men and women they are supposed to represent. And why should a worker be forced to pay for a service he did not want and may not benefit from?

The real problem is an inflexible labor law that assumes all workers have the same interests and goals. The best solution would be to allow union opponents to opt out of union representation altogether and either negotiate directly with their employer or bring in their own representatives. Unfortunately, this is prohibited by federal law, and union officials in Washington, D.C. have shown little interest in changing this.

To the extent that free-riders are a problem, their numbers are small. In right-to-work states the vast majority of workers covered by union contracts opt to join the union and pay union dues — at least three out of four workers in every right-to-work state. With Michigan’s long tradition of union support, that will almost certainly prove the case here as well.

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MYTH: Right to Work increases poverty

SOURCE: Center for Policy Alternatives
www.cfpa.org/issues/issue.cfm/issue/RightToWorkForLess.xml

QUOTE: "Right-to-work states have more poverty...Right to Work states have a poverty rate of 13.5 percent, compared with 12.2 percent in [non-right-to-work] states."

STATUS: HALF-TRUTH

While technically correct, the difference in poverty rates is pretty modest, and hides more than it reveals. The reason that this statistic is deceptive is because "poverty rate" figures do not account for local cost of living. When the Census Bureau says that Michigan's poverty rate was 13.3 percent in 2006, that means 13.3 percent of Michigan's population lived in a family with an income below a certain amount, referred to as the "poverty line." That "poverty line" is adjusted for family size, but not local cost of living. This is an important oversight: a seemingly modest income can still give one a reasonably good standard of living if costs for food, housing, and clothes are low, while a person with higher income in a different town can still wind up living in want if local costs are high enough.

As mentioned earlier, right-to-work states tend to have a lower cost of living. This much is essentially conceded by right-to-work opponents like the union-backed Economic Policy Institute.[2] This means that poverty rates calculated by the Census will overstate poverty in states where workers are not forced to pay dues.

Poverty rates may be useful over time, but between states with different costs of living the poverty rates can be deceptive. Otherwise there is little beyond conjecture to link right-to-work with poverty. Where there is stubborn, material want — poverty as most of us would understand it — the most likely culprit is an economy that is failing to create jobs; one like we have in Michigan today without a right-to-work law.

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MYTH: Right-to-Work will make Workplaces More Dangerous

SOURCE: AFL-CIO
www.aflcio.org/issues/legislativealert/stateissues/work/

QUOTE: "Right to work endangers safety and health standards that protect workers on the job by weakening unions..."

STATUS: FALSE

Right-to-Work does not affect safety standards, nor does it take away a union's ability to bargain for better safety practices and equipment. It is true that fatal occupational injury rates are higher in right-to-work states, but this is more a result of different state economies having different jobs available with differing rates of injury. There are a number of situations where a right-to-work state has a lower rate of workplace fatalities than a neighboring non-right-to-work state with a similar economy. Kentucky's fatal occupational injury rate was 79.6 per 1,000,000 workers in 2006 , compared to only 55.0 for neighboring right-to-work Tennessee; Montana's fatal occupational Injury rate of 104.0 per 100,000 workers was more than twice that of the neighboring right-to-work state of Idaho, where the fatal occupational injury rate was only 59.5.

Right-to-work does not mean a state will have dangerous workplaces: the right-to-work states of Arizona, Nevada, and North Carolina have lower rates of fatal occuational injuries than the national average. And allowing forced unionism does not guarantee safe workplaces; of the four states with the highest rate of fatal occupational injuries, only one, Wyoming, has a right-to-work law. The other three most dangerous states, Montana, Alaska, and West Virginia, do not have right-to-work.

Nor is the enactment of a state right-to-work law associated with an increase in workplace fatalities. There were fewer workplace deaths in Oklahoma in the five years after right-to-work took effect than there had been in the five years prior.

Right-to-work does not make the workplace more dangerous, it merely makes union officials more accountable to the men and women they represent.

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MYTH: The Right-to-work discussion is being driven by groups outside of Michigan

SOURCE: Ron Gettelfinger, Op-ed

QUOTE: "At the center of this effort is the National Right to Work (RTW) Committee, a Virginia-based group..."
www.mlive.com/grandrapids/stories/index.ssf?/base/ news-0/1198766760324330.xml&coll=6

STATUS: HALF-TRUTH

The right-to-work idea enjoys support from important business and political leaders within Michigan, such as Oakland County Executive L. Brooks Patterson, State Senate Majority Leader Mike Bishop, Michigan Chamber of Commerce President James Barrett, radio talk host Frank Beckmann, Detroit News editorial page editor Nolan Finley and Compuware CEO Peter Karmanos.

It is true that there is a National Right-to-Work Committee, and its headquarters is in Virginia, a right-to-work state that, unlike Michigan, has added jobs over the last five years and currently has a higher per-capita disposable income than Michigan.

If there is a serious campaign for a right-to-work law in Michigan, one should not be alarmed if it draws considerable attention from around the country. The fact that someone from outside of Michigan supports an idea doesn’t make it a bad one, and there’s no reason to expect that opponents won’t call in volunteers and money from outside of Michigan as well.

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MYTH: The campaign against right-to-work is likely to be extremely negative

SOURCE: Bill Bonds TV Ad
www.wrongformichigan.org

QUOTE: "I’m Bill Bonds, and what I’m about to tell you is going to affect your life in a bad way ..."

STATUS: TRUE

Currently in Michigan, workers can be forced to pay union dues or "agency fees" as part of their conditions of employment. Unions may argue that these forced dues are necessary to preserve unions and protect workers, but the bottom line is we have forced dues in Michigan right now and the state’s economy is still abysmal. Michigan’s economic fortunes have been declining even while the national economy has enjoyed sustained growth. Between 2001 and 2006, Michigan lost 5 percent of its jobs, easily the worst job losses in the country.

Because Michigan is doing so poorly without a right-to-work law, opponents have no choice but to argue that a right-to-work measure will only make matters worse — a real challenge when Michigan has the worst economy of any state in the union. Right-to-work opponents will argue that wages and benefits are less generous in right-to-work states. Even if that were true, union promises of better working conditions ring empty when people can’t find a job here.

What is undeniable is that right-to-work laws are proven job creators. Between 2001 and 2006, right-to-work states added jobs at more than twice the rate of non-right-to-work states. A right-to-work law could go a long way towards fixing Michigan’s broken economy. The bottom line is right-to-work opponents offer no solutions of their own, only scare tactics that maintain the status quo. That’s a status Michigan simply can’t afford.

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Paul Kersey is Director of Labor Policy for the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.

[1] Hunter, Compulsory Union Dues in Michigan, p. 16.

[2] Mishel, Lawrence, The Wage Penalty of Right-to-Work Laws, EPI Datazone, Aug. 21, 2001. While Mishel finds that right-to-work states have lower wages, the gap diminishes when cost of living is fully accounted for – indicating lower cost of living in right-to-work states.