An always-bad idea has been reanimated. Who's behind the push to lower wages, marginalize unions, reduce workers' economic security, buying power, quality of life and job safety? And why?
Some remarkable lies have been told about the supposed benefits of Right-to-Work laws. On the books in some states since the 1940s, RTW laws have never instigated real economic growth or shared prosperity. Yet GOP state-level legislators across the nation are again pitching RTW as a catalyst for economic growth. Genuine academic scholarship disproves all of their claims, and has uncovered some damaging effects of RTW laws. Behind the lies told to promote RTW is a highly organized, well-funded misinformation campaign. Below are four of the more blatant RTW lies. Let's examine what makes them lies, and spotlight the liars.
RTW Lie #1: In 2011, the American Legislative Exchange Council (ALEC) put out a piece of propaganda entitled Rich States, Poor States: ALEC-Laffer State Economic Competitveness Index. In it, right-to-work Texas is declared “the state with the best policy to emulate.” Why? The authors of the “study” state that from 2001 to 2011, Texas added more jobs than any other state. Then they imply that Right-to-Work law deserved the credit for this growth.
Sounds kinda impressive...until...
...Until you look at census data and discover that the Lone Star State had the greatest population growth of any state in that same ten year period. Curiously, Texas employment data reveals that, in the last four years of that period, all of Texas' job growth occurred in the public sector! And in that same four year period, private sector employment SHRANK.
What does this mean? It means ALEC cherry-picked data and leaped to a conclusion that supported their preconceived (ideological) bias; that RTW law promotes economic growth. ALEC ignored other data that paints a more complete and accurate picture of what was happening in Texas.
RTW law was not a driving force behind either population growth or employment growth. Americans were not flocking to Texas because already-created jobs awaited them, as further investigation will shortly reveal, nor were manufacturers flocking there because RTW was making the Lone Star State such an attractive business environment. ALEC played fast and loose with the facts. And got clumsy.
(And suffered a “History Blackout.” Anybody remember the big event of 2008? ALEC ignored the significance of the Great Recession. It explains much of the negative job growth in the private sector that Texas suffered from 2008 to 2011. This is the end of that ten-year period cited in the ALEC study.)
Factors other than RTW caused Texas' job growth. What were they? And why was the only job growth in that final four years happening in the public sector, i.e., government jobs? This, ironically, is a sector of the workforce, the community, and the economy, mind you, that the GOP routinely maligns and attacks. Talk about having a spurious claim boomerang on you. Job growth occurred in the very sector the GOP is trying to choke and shrink.
Census data and Internal Migration studies show the vast majority of Americans move to find more affordable housing, better weather, are moving to or from college, must address family concerns or needs, are retiring, or migrate for other reasons unrelated to work. What migrants are clearly not doing is seeking out a state with a Right-to-Work law on the books. Most citizens looking for work in low-tech, low skill industries know little to nothing about the existence or actual purpose of these misleadingly-named laws. Citizens and workers would benefit from learning what RTW does to wages, to working conditions, and even to state economies, and avoid RTW states, or better, organize to get these bad laws repealed.
Migration and the other factors mentioned above drove demand for goods and services in Texas. And this demand compelled businesses to hire more employees to meet that demand. RTW law played no part in this cause/effect equation.
Nor, surprisingly, are manufacturers seeking to relocate to RTW states. Surveys confirm this, despite claims to the contrary from ideologues, politicians and lobbyists. When Area Development magazine queried manufacturers as to the reasons they choose one state over another (and didn't ask politicians, lobbyists or consultants!), the presence of RTW law was ranked fourteenth in importance in 2009. In 2011 it slipped to 16th place.
For decades now, though, an organized effort has been force-feeding business owners a steady diet of ALEC-quality “data” telling them that they should consider RTW status important when selecting a site. Some consulting firms make a comfortable living by pushing this line, absent credible data. Thus some executives and business owners, while immersed in the site selection process, will ape the lobbyist line that RTW is an important, even key, consideration. But state-proffered incentive packages, real estate costs, construction costs, tax rates, and proximity to transportation and markets carry the real weight of a site-location decision. RTW lobbyists and “consultants” are thus, oddly, being paid to implant the notion in the minds of politicians, business owners and the public at-large that RTW is important in site selection, when in fact the process rejects and ignores it.
In Texas, the growth in government jobs came because of the migration noted earlier. Increased demand for schools, teachers, public works employees, police officers, firefighters and other public servants was driven by migration into Texas that had no connection to RTW. Though ALEC mentions housing costs and weather as factors influencing migration, ALEC lobbyists couldn't be bothered to quantify the impact of these other factors relative to RTW law.
Now exercising academic rigor and executing controlled studies can be frightfully boring and technical, and they require the use of math and statistical analysis. (Rhetoric and guile pay better, achieve quicker results, and require less effort. Whether the results best serve ordinary citizens, voters and taxpayers, however, most of whom earn decidedly less than a million-plus dollars annually...argues for that same academic rigor and controlled studies. Scholarship trumps unplumbed ideology, period.)
ALEC shirked the hard work required to sift out the truth about RTW and instead released a “study” implying that RTW alone accounted for Texas' population growth and job growth. Folks, if it looks like willful deceit, smells like willful deceit, quacks like willful deceit...
Paul Krugman supplied a further slap in the face to the ALEC claim about RTW in Texas. The Nobel Prize winner in Economics reported in 2011 that population growth in Texas was driven by “Retirees in search of warm weather and middle-class Mexicans in search of a safer life...” adding that they “...bring purchasing power that leads to greater local employment.”
My guess: the xenophobic Texas GOP turned a collective shade of gray when they heard about those foreigners...
This first example shows ALEC is guilty of both sloppy scholasticism, or none at all, and of presenting unrelated data and implying a cause/effect relationship where none exists. This is not an isolated example. The ALEC track record is one of selecting baseless ideological conceits, then cherry-picking data to support them. Integrity challenged, that ALEC crowd. Sorry, but I wouldn't want an ALEC shill living next door.
RTW Lie #2: When Indiana state legislators took up debate on RTW legislation (absent any good reason to do so. Free-bargaining Indiana was economically outperforming its RTW neighbor, Iowa. Even viewed through a more negative lens, Indiana, long a manufacturing-intensive state, was not losing manufacturing jobs as fast as Mississippi, Georgia, Alabama, Florida, and the Carolinas, all RTW states. Further, Indianans moving out-of-state favored non RTW states.), proponents released a PowerPoint Presentation, Indiana and Right to Work. This 2011 propaganda from the National Right to Work Committee quotes an executive from Fantus, a site location firm: “...approximately 50 percent of our clients...do not want to consider locations unless they are in right-to-work states.”
This statistic comes from a report released in 1975. Yes, 1975. As such, not only is it monstrously out of date, and hence unrepresentative of current opinion in current economic conditions, but a mere eleven years later, 1986, that same figure had plummeted to 10 percent.
What does it say about the integrity and honesty of the National Right to Work Committee that it used such ancient data? And used only that portion which would strengthen their argument? Referring to another incident in which the NRWC disseminated misleading data, economist Gordon Lafer wrote “..the economic claims made by the National Right to Work Committee are without any scientific foundation. If the committee's arguments were presented as evidence in civil litigation, they would be dismissed as what the courts call “junk science.”
The word “integrity” and the title “National Right to Work Committee” should never appear in the same sentence, much less in any document alleging a positive correlation between the two.
The National Right to Work Committee PowerPoint also fails to note the significance of NAFTA, passed in 1993, and the impact of other international trade agreements. These made outsourcing jobs to Mexico, China and elsewhere, places with labor costs so low that no state in the union could offer compensatory incentives to offset them, a much easier decision for businesses (Mexican autoworkers, for example, make one-tenth of what nonunion U.S. autoworkers earn). Environmental-protection regulation, worker safety and unionization rights are also weaker or nonexistent in those countries of interest to the “bottom-feeders” of manufacturing.
Globalization, you see, has gutted any impact RTW had. That impact, when there was one, was negative, and did specific harm, as will be shown later. Today RTW is completely impotent. Manufacturers in northern states looking for better weather, cheaper labor, fewer safety and environmental regulations, made their moves to southern states decades ago. What RTW proponents ignore is the damning fact that these same manufacturers, ensconced in southern states, many with RTW laws on the books, then moved manufacturing operations out of the United States altogether when the opportunity arose.
When manufacturers abandoned the northern states, a “Rust Belt” bloomed in place of the lost industries. Its salient features; economic malaise, infrastructure decay, neighborhood blight, ghost towns, high unemployment and migration out of northern industrial cities. But that Rust Belt migrated from northern states and settled in the southern states, following the manufacturers like a faithful puppy...a massive, ugly puppy. For although Southern governors and politicians welcomed the northern industrialists, crowing that prosperity had arrived, the salad days were brief...
...because those same industrialists soon shouted, “A plague on both your houses!” and skipped out of the country to foreign lands where labor costs were orders of magnitude lower. RCA is just one of the companies that skipped from northern states to southern states and on to Mexico...
Thanks to the absence of genuine, substantial, legal and financial consequences for offshoring, this aided and abetted by free-trade agreements (thank you, Congress and several Chief Executives), and thanks also to our legislators' ignorance and myopia about the impact these would have on American families, domestic manufacturing is a shadow of its former self.
Inevitable? Perhaps. But what did legislators do to ease the transition to a service-sector dominated economy? And to make it a broadly prosperous transition for citizens? Which legislators had the intelligence, the vision, and the determination to support their constituents through the change? Sorry, but there is no way to pin the blame for offshoring on unions and workers. Congress and several presidents failed to protect and serve the people they represent.
And RTW law, on the books in some states since the 1940s, was nothing but an arthritic gesture, a middle-finger from anti-union robber barons, useless in the fight against offshoring of manufacturing jobs. These barons had badgered and bought off legislators to get RTW laws passed, securing a cheaper, nonunion workforce in much of the south, a benefit only to manufacturers. Today RTW laws are as stupid and worthless as the calendar-clogging “symbolic votes” that cowardly legislators use to avoid tackling substantive issues that require the exercise of intellect and the presence of a spine. Witness the recent slew of votes in the U.S. House and Senate on ideological offal...
The Indiana legislature's passage of RTW is akin to a blind cowboy buying what is later discovered to be a dead horse, over the phone. He should have recognized his limitations, done his homework, found credible scholastic data, gotten professional help interpreting it, rejected claims from ideologically-contaminated sources, locked-out lobbyists, and put ordinary Hoosiers first. He shoulda known better...
RTW fanatics have been pushing this fake-stimulus legislation in dozens of states and fine-tuning their pitch when legislatures reject it. Advocates then have a puppet-legislator reintroduce a RTW bill in the next legislative session. But legislators who still honor their oath to serve constituents sometimes prevail. In 2011, New Hampshire state-level legislators spent months absorbing substantive data about the economic impact of RTW. The legislature voted it down. “RTW would be a huge step in the wrong direction for our state,” said a member of the state House of Representatives. He was a Republican. The title of his Op-Ed: “Facts show RTW makes no sense for New Hampshire.” Forty other New Hampshire Republican legislators concluded likewise.
RTW Lie #3: The RTW plague descended upon Oklahoma in 2001. State government legislators there heard a remarkable, no, truly incredible claim from Texas-based consultant Elizabeth Morris. Adopt a RTW law, she claimed, and legislators would see a 90 percent increase in the number of firms looking to relocate to the Sooner State.
Now interest in possible relocation doesn't translate automatically into actual relocation. This distinction alone should have caught the attention of legislators. But worse, such an allegation is almost impossible to quantify, which likely explains the careful wording of Morris' statement. She presented no data to back it up. But GOP minds, ideologically predisposed to want to believe it, possessed of a knee-jerk aversion to unions, were not eager to dissect the claim. They wanted to believe it, she knew they wanted to believe it, so a conspiracy of silence ensued when she uttered it. Integrity, pounding at the door of the state legislature, demanding admission and the right of inquiry, was locked out. It certainly wasn't present in the hearts and minds of GOP legislators.
Oklahoma became a RTW state that year. And economic conditions following passage have been disappointing. The number of new companies relocating there has fallen by a third from levels seen in the free-bargaining Oklahoma of the 1990s. The state then welcomed an average of 48 per year. Employment levels? They declined one to three percent. Some businesses left the state to set up manufacturing abroad.
This is not to say that RTW law caused these declines. Rather, RTW was not a factor. As in Texas, factors unrelated to RTW actually pushed economic growth or contraction. NAFTA was one of them. Passing a RTW law was a waste of time, a waste of resources, and profitable only for the lobbyists and “consultants” who promoted it. (One group did garner some benefit from RTW. More to come on these “winners.”)
RTW Lie #4: On March 12, 2012, Indiana Governor Mitch Daniels, a Republican, said MBC Group, a manufacturer of packaged and printed materials, was creating jobs in the state thanks to RTW. But in a demonstration of candor from a business owner, the MBC Group president quickly denied RTW had influenced their in-state expansion.
This disagreement among supposed allies, a business owner and a GOP governor, is especially interesting because of suspicious activity on the part of the Indiana Economic Development Corporation. It appears IEDC prepared a news release citing RTW as one of the reasons MBC Group opted to expand in the Hoosier State. They had the MBC president sign it, then posted the release on the state website. It included this sentence: "With its low tax environment, robust infrastructure, superb logistic support network and right-to-work status, Indiana was a no-brainer location for us.” The implication was that the MBC president had uttered these words.
He hadn't. And MBC President Eric Holloway had not noticed the reference to RTW in the press release. When it was pointed out, he was specific in his objection: Right-to-Work “was not going to affect our decision one way or another,” he said.
IEDC, a quasi-public entity exempt from much-needed oversight, has been rocked by scandals and repeatedly guilty of making unfounded claims and doctoring reports. A kid-sister entity, the Wisconsin Economic Development Corporation (WEDC) has been similarly plagued with mismanagement, but has added ineptitude to the list of “achievements.” Monumental accounting blunders “lost track” of millions of dollars of loans (if these were, in fact, “accidents”, and not disguised handouts). This was taxpayer money, hard-earned. Now it can never be put to use bringing prosperity to the taxpayers and citizens of Wisconsin. Instead it lined the pockets of undeserving business owners, now recipients of uncollected, indeed, uncollectible “loans.” Care to guess how many recipients voluntarily paid back these loans? Headline: “Accounting failures and integrity-deficit create black hole that sucks in mountain of taxpayer money. GOP escapes accountability.”
Both of these corporations, payback ploys populated with partisan puppets, replaced government agencies charged with promoting economic development. Both corporations manifest the corruption that runs amok when the GOP privatizes and “corporatizes” a government function. This in the wake of state budget deficits, teacher layoffs, reductions in government oversight of big business practices, infrastructure decay. The GOP solution? Privatize. It beggars belief...
Bragging about RTW-status, and the lower wages they induce, as a means to attract manufacturers, has rightly been labeled “smokestack chasing.” States so inclined are chasing firms that employ a low-skill workforce for low-tech manufacturing. Legislators seeking such business may believe they are going to lower unemployment.
Companies looking for lower labor costs may, in fact, relocate to a RTW state...but they do so because other factors, i.e., state-government incentive packages, lower taxes, etc., tip the scale and make it lucrative. And here the amount of time that such a company remains in-state becomes key. Unless stipulated, said company may remain only until it receives a still more lucrative offer from out-state, and then vacates before the first state recoups the costs of the incentives it granted. And of course, the long-term advantage to the state of retaining companies includes the taxes that businesses and their employees pay. These revenues are used to build and maintain the infrastructure that makes the state attractive to business. But let the race to the bottom begin...
And they're off! In a textbook example of how foolish it is to chase smokestacks, Bridgestone/Firestone closed its Oklahoma City factory in 2006 and shifted production to Costa Rica. Oklahoma's RTW law, freshly minted in 2001, made no difference. In another example of RTW impotence, Imation Corporation announced plans in 2002 to build a plant in Oklahoma. Four years passed, no ground was broken. In 2006, Imation drastically cut its ties to the Sooner State by ditching the expansion, laying off a sizable chunk of its workforce, and shifting production to Mexico. Again, Oklahoma's RTW law proved useless.
Intelligent legislators (a few serve the public in New Hampshire, as noted earlier) are digging deeper into what lures and retains businesses, and discovering that high-tech, high-skill firms show little interest in hopscotching to low-labor-cost states. These businesses require a more educated workforce...the kind found in free-bargaining, i.e., non-RTW states, where investment in education at all levels is developing the workforce ready to meet future marketplace and workplace demands. These free-bargaining states do not feature the lowest taxes, because wiser residents and businesses still recognize the long-term benefits of investing in infrastructure and education. And the investment is paying off. New Hampshire legislators, after comparing their state's economic muscle to that of RTW states, realized they were in better shape already than the RTW competition, and also better positioned to continue prospering if they remained a free-bargaining state.
But one correlation involving RTW has been confirmed. Right-to-Work laws lower wages. This is the negative correlation mentioned earlier. It is also the real purpose of these laws. Few GOP legislators seem to have the brainpower required, or the integrity, to run down the consequences of this fact. With less income, workers contribute less to demand for goods and services in the economy. They lose buying power and thus lose influence in the wellbeing of local and state economies. GOP legislators thus “succeed” in two respects, albeit toxic ones. The RTW law they champion succeeds in economically marginalizing the constituents they are supposed to represent (though GOP legislators have grown more transparently beholden, almost exclusively, to wealthy benefactors), and the law impairs economic growth and prosperity for workers, communities, municipalities and the state.
RTW advocates scramble to obscure this correlation with cherry-picked data, rigged surveys, and outright fabrication. Picture a dozen Shriners shoe-horned into clown cars, dodging each other and honking horns as they figure-eight for public amusement. There, you have pictured equivalent effort...
Shocked when confronted with these damning facts, GOP legislators convene with “consultants” who immunize them from public outrage with comforting assurances, junk scholasticism and heavily massaged factoids. “You're looking at far too much information,” say the consultants, “Of course you're worried and upset. Here, we've prepared these press releases to mollify the public. And we've worked out a schedule of appearances where you won't be pestered by the press or by constituents. Just a few of our wealthy friends, who have some marvelous “opportunities” for you to consider...”
Right-to-Work laws do benefit one group: GOP politicians. These are the “winners” mentioned earlier. Unions, seeking shared prosperity for workers (eschewing the GOP preference for oligarchy), tend to support Democratic candidates. RTW laws, drafted by anti-union lobbyists, routinely include language prohibiting employers and employees from negotiating a “Union Security” clause. Such a clause states that all employees who receive benefits from a collective bargaining agreement, whether they be union members or not, must pay their share of the costs of the union representation that secures those benefits.
These nonunion employees are not, however, required to pay full union dues. They pay only for the costs incurred to secure the collective bargaining agreement. This means that nonunion employees contribute nothing to union political advocacy. This is done in recognition of the knowledge that some workers may not share the political and ideological bent of the union's political advocacy, and may not like a candidate or party the union supports. But it is also a protection for those workers. They are not forced to support any political candidate or any political activity via union dues. But nonunion employees can be represented by the union in disputes with management. These are details that anti-union, pro-RTW lobbyists like to gloss over or ignore.
These anti-union lobbyists also remain silent when misinformation is disseminated. One oft-repeated lie is that at businesses where unions protect workers, new employees are forced to join the union as a condition of employment. Absolutely false. No employee can be compelled to join a union. That is a violation of existing Federal Law. It's simply false to assert or imply otherwise. Yet this lie is firmly entrenched in the minds of many anti-union citizens, still has currency as a “fact.” The anti-union organizations cited in this article do little or nothing to dispel this falsehood.
RTW laws allow nonunion workers to refuse to pay the costs of negotiating a collective bargaining agreement. But these nonunion employees still receive all the benefits secured by that agreement. These nonunion employees thus become “free riders.” They enjoy union-won benefits but they do not pay their fair share of the cost incurred to secure them. Union dues paid by full members, and union time and effort, are thus allocated to providing benefits to nonunion employees. This weakens the union in its efforts to bargain collectively for wages, working conditions and benefits. All workers lose once these conditions are legislated by RTW.
Smaller, weaker and financially-limited unions offer less support to pro-union candidates for office. GOP majorities thus gain more power to further weaken unions, gerrymander districts, advance trickle-down economic policies, grant more tax breaks to corporations and to the wealthiest residents, and restrict womens' rights, all of this absent any sound, sane reason to do so. Majority status also allows the GOP to indulge its bizarre penchant for restricting and reversing social equality and equity, and to restrict, even reverse, economic equality of opportunity.
Odd. Witness here the GOP engaging in true class-warfare, the very charge that GOP ideologues hurl at citizens who protest Wall Street and Financial District corruption, and who revile the astronomical and unjustifiable level of income inequality. And yet conservatives are furiously averse to examining why they pursue this regressive social and economic agenda. They do so with a knee-jerk, evangelical fervor, while refusing to plumb the depths of their fears and motivations. Telling...and infantile.
Right-to-Work laws are wolves in wrapped in the Stars and Stripes. They may bleet like patriots, but like the robber barons who paid bribes to have them passed, they remain predatory and deceitful. Right-to-Work laws confer no “rights.” The name disguises their true aim and their real effects. They are an ideological conceit sold to the public as an economic stimulant. Their true purpose is to lower wages. It is time to organize and repeal these laws. They are a chokehold on our shared prosperity, on real economic growth. The “haves” are once again bribing and buying legislators to put these bad laws on the books.
Below is a partial list of organizations that disseminate misinformation about Right-to-Work law:
-The American Legislative Exchange Council (ALEC)
-The National Institute for Labor Relations Research
-The Michigan Freedom to Work Coalition
-The Mackinac Center for Public Policy
-The Cato Institute
-Americans for Prosperity
-The Penn State Financial Group
-The National Right to Work Committee
-Chambers of Commerce at local, regional, state and national levels
-Fox “News”
-The Wall Street Journal
-The Indiana Economic Development Corporation (IEDC)
-The Oklahoma Council on Public Affairs (OCPA)
-The Michigan House Republican Strategic Task Force on Jobs
-The Business and Industry Association
I invite readers to seek out and publish the funding sources for these groups. Those sources profess the ideology that weakens our nation by exploiting our labor. In the case of AFP, many of you Kos readers know perfectly well who is behind the organization.
Bibliography
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Bottari, M. (2014) Who's Behind the National Right To Work Committee and It's Anti-Union Crusade? Center for Media and Democracy: PR Watch. http://www.prwatch.org/...
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Lafer, G. (2012) Right to Work: A Failed Policy. A New Hampshire Update. Economic Policy Institute, 1-6.
Lafer, G. (2011) Right to Work: The Wrong Answer for Michigan's Economy. Economic Policy Institute, 1-11.
LoBianco, T. (2012) Firm Denies Right-to-Work was Reason for Expansion. Associated Press. Http:/posttrib.suntimes.com/business/11318629-420/company-denies-right-to-work-reason-for-expansion-reldate2012-03-15y191438.html
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Selected Readings
Cohen, N. (2000) Business Location Decision-Making and the Cities: Bringing Companies Back In. Brookings Institution Working Paper, April. https://www.brookings.edu/....
Copeland, T. (2011) Facts show Right to Work makes no sense for N.H. Seacoast online, May 24th. www.seacoastonline.com/apps/pbcs.dll/article?aid+/20110524/OPINION/10524035&template=printart.
Kromm, C. (2012) The Racist Roots of Right-to-Work Laws. The Institute for Southern Studies, December 13th. http://www.southernstudies.org/...
Zullo, R. (2010) Right-to-Work Laws and Fatalities in Construction. Institute for Research on Labor, Employment, and the Economy. Ann Arbor: University of Michigan.