Right-to-Work States and Laws - Case Study Example

Running Head: Right-to-work s and laws.     Right-to-work s and laws                           Institution:       Date: Introduction The “rights to work state” is a state-based legal concept, which is based on the constitutional principle of freedom of association and the principle of common law which declares rightful ownership of private property. The right-to-work laws based on these legal principles confer to employees the right to act autonomously with regard to whether they should or should not financially support or join a union (DelPo & Guerin, 2011). A number of states in the United States of America (U.S) have made laws, which have instituted the right-to-work laws in their states. As such, these states are referred to as the “right to work states.” The right to work laws legally ensures that the right of workers to make decisions as to whether to be union members or not, is upheld. The institution of these statutes in the states that have accepted them prohibits institution of agreements made between employers and labor unions, which compel employees to pay union fees or be members of unions, either prior to or after being hired (DelPo & Guerin, 2011). Currently, there are 23 states which are considered right-to-work states and the total would be considered 24 because the territory of Guam has also adopted the laws (Cooper, 2004). State statutes are in a constant flux and there may be new members too as other states such as Indiana contemplate instituting the laws. A large number of states that adopted the right-to-work laws did so in the 1940s and 50s after the legislation of the Taft-Hartley Act of 1947. This act allowed the states to institute the right-to-work laws after the 1935 pro-union Wagner Act was deemed to have given too much power. Currently, 27states as well as the District of Columbia have not yet adopted the rights-to-work laws (Cooper, 2004). The table below shows the legislation timeline for each of the 23 states. Picture one: Timeline for states’ legislation of the right-to-work laws (http://right-to-work-laws.johnwcooper.com/) (Cooper, 2004). Note: It has to be noted that Indiana (1965), New Hampshire, and Delaware (1947) instituted the right-to-work laws in the years within the brackets preceding each state, but they are not included in the table above because they have since then repealed these laws. History of right-to-work law Prior to the legislation of the Taft-Hartley Act in 1947, which permits states to legislate right-to-work laws, the 1935 Wagner Act allowed unions to have exclusive representation powers. This allowed unions to be the voice of all employees in unionized organizations. Under this legislation the union would be recognized as the official employee’s voice if it could be able to secure 50% of the employees’ votes. For example, if an organization has a workforce of 100 employees, but only 10 are unionized, then, only six employees are required to vote in order to permit the union to represent the total workforce of 100 employees (Cooper, 2004). After gaining the mandate of exclusive representation, most unions seek the employer’s inclusion of security clauses in the collective bargaining agreements. Before the Taft-Hartley Act the mandated security clauses often came in three forms, which would include the following three shops: (1). The union shop- which compels all workers to become members of a union within a stipulated amount of time after getting employed; (2). The agency shop-which compels all employees to pay union fees whether they join or not; (3). The closed shop-which stipulates that employers should only employ people that have already joined unions. These shops that were permitted under the pro-union act of 1935 were perceived as being unfair because they gave too much power to the unions (Cooper, 2004). As a result, people responded by calling for a legislation that would outlaw some of the security clauses. In response, the Taft-Hartley Act was legislated in 1947. This act prohibited the security clause that permitted the closed shop agreements. The act also legalized the right-to-work laws under section 14 (b) and mandated the states to make laws that would make the union and agency shops illegal. If an employee resides in a state with the right-to-work laws and their organization is unionized, then, they would be bound to the union contract and represented by the union. However, they would not be compelled to pay union fees and join the union. On the contrary, if one resides in a state with no right-to-work laws, the individual has to pay union fees and be bound by the union contract if at all the employee works in a unionized organization. Since the legislation of the act 23 states have instituted the statute in their state laws, with most right-to-work states being in the western and southern United States. A large number of states that adopted the right-to-work laws did so in the 1940s and 50s after the legislation of the Taft-Hartley Act of 1947 (Cooper, 2004). Apart from citing unfairness in the pro-union Wagner Act, supporters of the act state that the earlier security agreements were against the principle of common law which permit private property ownership and the freedom of association right. Arguments for and against the right-to-work laws Right-to-work (RTW) proponents often quote Thomas Jefferson’s quote as the starting point for their argument: “To compel a man to furnish contributions of money for the propagation of opinion which he disbelieves is sinful and tyrannical (Cooper, 2004)." The proponents of the law state that lack of these laws or rather “forced unionism” goes against the constitutional rights of individual employees to freely associate and the right conferred by the common-law principle of private property ownership (DelPo & Guerin, 2011). According to them, respecting these constitutional and legal rights should permit employees to freely join or refrain from joining unionized organizations and unions. Similarly, they should be free to either pay union fees or fail to do so without any resultant victimization. The proponents argue that these laws lead to more job creation through the attraction of businesses, higher wage payments and better the accountability of unions. Additionally, they state that these laws have a moral precedence because they stop the compulsion of individual employees to support a course that they have no believe in. On the other hand, opponents of the right-to-work laws often cite Martin Luther King quote in their arguments: “In our glorious fight for civil rights, we must guard against being fooled by false slogans, as `right to work. It provides no `rights and no `works. Its purpose is to destroy labor unions and the freedom of collective bargaining (Cooper, 2004).” The opponents state that these laws weaken unions and lead to lower wages and thus finally lower the standards of living. Additionally, the opponents state that the laws are immoral because they permit non-union members (‘free riders’) to reap the benefits of unions even without being members. The arguments for and against free or compelled unionization as determined by the presence or lack of rights-to-work laws are based on their effect on wages, unemployment and poverty levels. As such, the analysis of pro and anti rights-to-work sides follows these determining elements. The effect of these laws on the levels of wages has ambiguity from an economic perspective (Cooper, 2004). The effect is ambiguous because the effect of unionization on levels of wages also has ambiguity. However, it is notable that the right-to-work laws have effect on wages because they have an effect on unionization (Reed, n.d). In spite of the fact that the net effect is unclear, it is notable that unionization has effect on wages of both unionized and non-unionized employees. The unions reduce the wages of non-unionized workers while increasing those of union workers, however; the effect that dominates between the two is not understood. The typical demand and supply model shows that a rise in union wages decreases employment in the union sector and this causes a spillover which raises employment and reduces wages in the non-unionized sector. Opponents of the RTW laws often state that the RTW states have an average wage, which is lower than those experienced in states with no RTW laws. This fact is undisputed even by proponents of the RTW laws, but the proponents state that the claim and supporting statistics are overly simplistic, misleading and manipulative and thus cannot be used to offer the true picture of the situation (Cooper, 2004). It is, however agreeable, that wages in RTW states are lower than in the non-RTW states. In support of the proponent’s argument a research by the “National Institute of Labor Relations Research” showed that when adjustments on cost of living are made using the poverty rate the differences become slight and of little significance. However, the initial nominal wages (not adjusted for differences in cost of living) are low in RTW states when compared to non-RTW states (Reed, n.d). In a bid to understand the overall wage influence of the RTW laws Moore’s review on researches on the issue concluded that the RTW laws had no significant effect on wages. This element has however been, portrayed differently by different research studies (Moore, 1998). For example, Mishel’s 2001 research showed that RTW laws affect wages negatively, but the research was found to be unreliable because it made assumptions that the RTW laws have no effect on job composition within states (Mishel, 2004). On the other hand, current and more reliable research shows that RTW laws have a wage benefit of about 0.2 to 2% (Cooper, 2004). A state-wise review on recent adopters of RTW laws such as Idaho and Oklahoma show that the laws provide a seemingly favorable level of wages. A general overview of literature on this subject shows that the RTW laws have no meaningful or significant effects on wage levels. As such, other elements should be of essence in determining whether a state should implement these laws or not. The RTW laws seem to influence the decision of manufacturers and other companies’ choice of where to set up their plants and operations and this in turn seems to affect the rates of employment within the respective states. Research reviewing the 1978 to 200 period by Mackinac Center for Public Policy in 2001 shows that rates of unemployment in RTW states was 0.5% lower when compared to states with no RTW laws (Cooper, 2004). The same research also reviews the number of families, which lived below the poverty line in the same states. The findings’ results proved that all states that experienced an increase in families living below the poverty line were all non-RTW states. This trend is perhaps explained by the statistics from the U. S. Bureau of Labor Statistics, which shows that more employment opportunities were created in the RTW states than the RTW states in the past two decades. According to the study’s findings RTW states had a 62% job creation rate whereas; the non-RTW states had a 42% job creation rate (Cooper, 2004). Results in the same two decade period show a grim picture of the non-RTW states’ situation because there has been a general decline in jobs available in non-RTW states. The job creation trend may best be explained by the establishment of auto plants in the U.S. in the past decade-all new plants were established in states with RTW laws. The general trend indicates that the adoption of RTW laws determines the positive economic state and development of a state. This may be exemplified by Idaho, a recent adopter of RTW laws, whose economic growth has grown tremendously because of the adoption. The preference of state of establishment may be a result of the fact that the RTW laws are associated with high productivity on labor. After a comprehensive review of the studies on RTW issues, it appears that RTW laws have no meaningful or significant negative or positive influence on wages. Therefore, other factors must be the significant determinants of whether a state adopts the RTW laws or not. The job creation and employment perspective, however, shows that the presence or lack of RTW laws in a state significantly determines investor establishments and thus influencing employment rates and economic status of the concerned states. These findings indicate that the RTW laws have positive economic effects on a state in terms of improving employment rates and reducing poverty levels. As such, the legislation of the laws should be favorable to the economic status of any state. The wage effect that non-RTW states use as a basis of their argument is found to be less significant in determining actual wage levels when all adjustments are factored in, and therefore, the nominal wage margin is less significant (Cooper, 2004). In conclusion, the non-RTW states go against the employees’ rights of free association and the rights of private property ownership because they compel individuals to take part and support what may not be in their interest. The forced unionism is tyrannical and reminiscent of slavery, which should not exist in a democratic haven like the U.S. Additionally; the Wagner Act has no benefit on employees except for the slightly high nominal wages, which when adjusted for other factors of the economy prove less significant economically. The verbal debates and claims in this case are of less significance because facts speak louder than words, and the facts show RTW laws are favorable for the economy. This is proven by the fact that some states such as Indiana are still championing for explicit legislation of RTW laws (Olson, 2012). Finally, if the non-RTW states were so fair, just and favorable, we would not as a nation have the “National Right to Work Legal Defense Foundation Incorporation,” which fights for rights of employees in non-RTW states (NRTW, 2012). Its existence shows that there is something wrong about the non-RTW states’ ‘forced unionism’ work environment. References Cooper, W.J. (2004).Effects of Right to Work Laws on Employees, Unions and Businesses, retrieved on April 21st 2012 from http://right-to-work-laws.johnwcooper.com/ DelPo, A. & Guerin, L (2011).The Essential Guide to Federal Employment Laws, 3rd edition, Berkeley: CA, Nolo Publishers Mishel, L. (2004). The Wage Penalty of Right-to-Work Laws, retrieved on April 21st http://www.epinet.org/printer.cfm?id=47&content_type=1 Moore, W. J. (1998). The determinants and effects of Right-to-Work laws: A review of the recent literature. Journal of Labour Research, 19 (1): p. 445-470. National Right to Work Legal Defense Foundation Incorporation (NRTW) (2012). A Brief History of the Foundation, retrieved on April 21st 2012 from http://www.nrtw.org/b/foundation_history.htm Olson, G. E. (2012). Indiana could become the first state to embrace a right-to-work law in more than a decade, alarming organized labor proponents who fear a shift in public support for workers rights. Retrieved on April 21st 2012 from http://management.fortune.cnn.com/2012/01/31/what-right-to-work-laws-really-mean/ Reed, R. W. (n.d). How Right-to-Work Laws Affect Wages, retrieved on April 21st 2012 from http://129.3.20.41/eps/lab/papers/0506/0506005.pdf Read More