The Smart Money: 'Right to Work' ... for less

Posted Tuesday, March 11, 2014 in Analysis

The Smart Money: 'Right to Work' ... for less

by Gina Hamilton

It's election season, so Republican governors, including Maine's Paul LePage, all around the country are trotting out "right to work" legislation again, in hopes of securing their base in November.

"Right to work" is newspeak for "anti-union".  For some reason, even poor and working class Republicans have somehow bought into the myth that the real enemy against their class are the unions, whose job it is to secure better wages and benefits for their members, usually at the expense of a corporation's shareholders.

The way this was done was twofold. 

First, "right to work" corporations and their mouthpieces in government laid the groundwork. They made the case that "public employees" shouldn't be allowed to unionize, since the shareholders in the case of public unions are by definition taxpayers.  This demonizes teachers, social workers, public works employees, and many others who are working, usually for less than they could earn in the public sector, relying on a state pension in lieu of Social Security.  

Secondly, eventually, public employees unions become conflated with all unions, and the case is made that unions (because they do what they do on behalf of workers) drive out "good paying jobs".

Never mind that the good paying jobs were there in the first place because of unions.  The economy works best when labor and capital are in balance. If capital has too much power, or if labor does, things get out of whack pretty fast.  Throughout history, there haven't been many cases where labor had too much power over capital.  But there have been plenty of instances when capital had too much power over labor.  Including now.  Too much power in capital's hands leads to massive income inequality, the movement of manufacturing offshore, the loss of benefits to "keep the job in town", the downgrading of environmental and worker  protections, and the handing of municipal dollars to corporations to bribe them into staying put for the sake of the workers and the tax base. 

And when a corporation receives huge tax subsidies to remain in a community, and finds cheaper labor in Vietnam or Bangladesh, or Mississippi, off they go, without a backward glance at the community that compromised their own values and gave them tax dollars to stay.

For better or for worse, the thumb on the scale that keeps labor and capital balanced is the formation of a union ... or the possibility of unions. In "right to work" states, capital has free rein, because workers cannot form unions.

But what is the fiscal difference between a "right to work" state and a "free bargaining" state, where workers can form and join unions?

According to research by the University of Maine, the differences in worker pay levels between free bargaining states and right to work states are pretty obvious.  In 2009, the median weekly earnings of full time workers in free bargaining states ($771) was 13.4 percent higher on average, than for workers in right to work states ($680), whether the free bargaining workers were members of unions or not. Annual pay for workers in all industries was 14.1 percent higher in free bargaining states than in right to work states.

And right to work doesn't encourage business start-ups. According to the Center for Enterprise Development, free bargaining states average 13.1 new business starts for every thousand people. In right to work states, the average is 10 per thousand.

Plus, the states are worse off.  The Gross State Product in right to work states is worse than in free bargaining states, and in half of all right to work states - 11 out of 22 states -  the poverty rate was greater than 15 percent, compared to only six out of 28 free bargaining states.  That is correlated with higher welfare spending in the states.  The average poverty rate for the free bargaining states was 12.8 percent.

LePage came to Brunswick Landing, the former Brunswick Naval Air Station, on Monday to urge "right to work" passage once again. It's unlikely to even rate a hearing in the Democratically led Legislature. But the very fact that we still hear about it - despite a clear lack of objective fact that shows "right to work" encourages jobs at all - suggests that the whole scheme isn't about workers at all, and has very little to do with unionization.  This is about who is calling the tune in state capitals, and who is writing "model legislation" for these states. We'll look at one of the organizations pushing model legislation next week.

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