Right to Work (For Less): By the Numbers

Right to Work (For Less): By the Numbers

Though it’s still hard to judge the full economic impact of the laws, it’s clear that workers in “right-to-work” states face a cascade of disadvantages.

The 1935 National Labor Relations Act transformed the landscape of American labor relations, establishing basic collective bargaining rights and outlawing an array of unfair labor practices. The law emboldened activists to organize across the core of the industrial economy, and the tight labor markets of the war years cemented those gains. When the Depression hit in 1929, only one in ten workers were covered by union contracts; by 1945, fully a third of the workforce—skilled and unskilled alike—enjoyed that security.

It wasn’t long before business interests pushed back, winning “antidiscrimination” (read: anti-union) amendments to state constitutions in Florida (1944), Arkansas (1944), Nebraska (1946), and Arizona (1946) and then scoring a broader victory with the passage of the Taft-Hartley Act in 1947. Taft-Hartley allowed states—through the passage of so-call “right to work” laws—to evade the union security clause (Section 8.A.3) of the NLRA. Under “right to work” (RTW), workers covered by union contracts could not be required to join the union and pay dues. In short order, most of the deep South—where starkly racialized labor markets and low-wage, “low-road” economic development were the norm—had embraced RTW. Over the following decade, several states in the midwest and mountain West followed suit (see map below); by 1960, nineteen states had passed RTW laws, and another four joined the list over the next half-century (while Indiana repealed its law in 1965).

In recent years, the right has rediscovered RTW, taking the battle to states that were once union strongholds in an effort to deal a final blow to the labor movement and to signal a “business-friendly” legislative and regulatory climate. Indiana and Michigan succumbed in 2012. Wisconsin in 2015. West Virginia in February of this year.

It is difficult to plumb the full impact of RTW. The timing and location of the laws’ passage makes it almost impossible to untangle the driving forces behind rates of economic growth or job creation across states. The economic trajectories of Minnesota and Mississippi since 1954 (when the latter passed its RTW law) are profoundly different, but it is quite an explanatory leap to pin that difference—good or bad—on one detail of state labor law. And before-and-after analysis of states that have more recently passed RTW are inconclusive at best.

While there is no credible evidence that RTW laws boosts investment or job growth, their impact on a state’s workers are a little clearer. RTW makes both new organizing and, as we have begun to see in Scott Walker’s Wisconsin, holding onto past gains more difficult. Even if union coverage (the reach of the contract) remains the same, dues-paying membership slips. And by undermining bargaining power, it dampens wages. The work of Elise Gould and Heidi Sherholz (updated by Gould and Will Kimball in 2015) controls for an array of individual (education and employment status, for example) and state variables (cost of living, unemployment rate), and finds that wages in RTW states are a little over 3 percent lower than in non-RTW states (a $1500 deficit for a typical full-time worker). The compensation penalty—taking into account lower rates of employer-provided health and pension coverage—is even wider.

This cascade of disadvantage for workers in RTW states, from lower unionization rates to lesser bargaining power to lower wages, is illustrated in the two graphs below. In these visualizations of the data, the states are strung like pearls along each annual measure. The RTW states are red, the others blue. The “box-and-whisker” for each year traces the variability across the states: the centerpoint of each box is the median state on that measure; the top and bottom of the box mark off the seventy-fifth and twenty-fifth percentiles (the “interquartile range”); the top and bottom whiskers reach out to values that are no more than 1.5 times the interquartile range; outliers in the data fall beyond the whiskers.

In the graph of union density, unsurprisingly, RTW states cluster below the median. In many settings, the passage of RTW in the 1940s or ‘50s locked in low unionization rates in states (especially in the South) that had evaded the first wave of post-NLRA organizing. In other settings, RTW set the conditions for economic development in states (especially in the southwest) where postwar economic growth was most intense. As telling as the general pattern are some of the exceptions, including pockets of organizational solidarity (hotel workers in Nevada, manufacturing workers in Iowa) despite a RTW climate.

On wages, we see much the same pattern: a wide variation across states, the RTW states dripping off the bottom of the scale. The distinction between RTW states and the rest is perhaps most pronounced for men and women at the median, sixtieth and seventieth wage percentiles (a wage range, in 2015 dollars, that runs from about $15/hour to $30/hour). I make no claim here that RTW alone is dampening wages (this is a crude measure that does not control for other economic and policy differences across states). But it is clear, I think, that RTW is a potent marker of the broader climate that workers face in a state. Anti-labor legislation, in most of these settings, is accompanied by regressive and austere fiscal regimes, by woeful underinvestment in education, and by social policies that combine meager cash assistance with generous subsidies or incentives for participation in the low-wage labor market. This, in the end, is not about “rights” at all; it’s about power—the diminished power of unions to represent their members and bargain for living wages, and the naked power of business interests to turn states into laboratories of austerity and neoliberalism.

Colin Gordon is a professor of history at the University of Iowa. He writes widely on the history of American public policy and is the author, most recently, of Growing Apart: A Political History of American Inequality.