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Opinion: Right-to-work proves to boost state jobs, income

Proposition A Pro

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Outside of Missouri, the most closely watched contest in the Aug. 7 elections here will not be any of the political races; it will be the resolution of an important policy question. In the referendum known as Proposition A, voters will have the final word on whether Missouri becomes the nation’s 28th state to enact right-to-work legislation [aka RTW].

We already have an RTW law – passed by the Missouri Legislature and signed by the governor in early 2017. It was supposed to take effect on Aug. 28, 2017. However, on Aug. 18, organized labor groups collected enough signatures to give voters the choice of implementing the law (with a “yes” vote on Prop A) or rejecting it (with a “no” vote). A simple majority wins.

At a labor rally in St. Louis on June 23, AFL-CIO President Richard L. Trumka joined with other labor leaders in proclaiming that RTW would set off a “race to the bottom” for all workers, not just union members. He said, “Proposition A will lower wages, destroy jobs, (and) increase poverty … .”

Naturally, no union boss who can limit the supply of labor to members of his own union wants to give up that ability. Who wants competition – when you are in the cushy position of not having to compete? But the idea that competition is bad for growth and job creation is complete nonsense.

In fact, RTW states have consistently outperformed forced-union states in jobs, personal income and economic growth. That’s not a matter of opinion; it comes from hard data provided by three federal bureaus – Census, Labor Statistics and Economic Analysis – over the 10-year period 2004-2014.

During this period, average job growth in the 22 states with RTW laws in place for most or all of that time was more than twice as fast, at 9.1 percent, as in the 28 forced-union states, according to a data analysis from the 2017 book, “Wealth of States: More Ways to Enhance Freedom, Opportunity and Growth.” The RTW states also had considerably faster growth in personal income, at 54.7 percent compared with 43.5 percent, and a much stronger economic growth, 50.7 percent, compared with 38 percent.

And there were other ancillary benefits, including population growth more than double that of forced-union states. From 2004 to 2014, many Americans voted with their feet in moving into RTW states and out of forced-union states, according to “Wealth of States.”

The devastation that befell the U.S. auto industry during and after the 1980s exemplifies what happens when companies are kept from responding to market forces as a result of compulsory unionization. They’re forced to pay artificially high prices for labor and absorb “legacy” costs, such as health care and pensions, they cannot possibly afford over the long run.

During the Great Recession of 2008-09, two of the three big automakers – GM and Chrysler – would have collapsed but for government bailouts totaling billions of dollars of taxpayer money. Meanwhile, Toyota and other foreign manufacturers that had opened plants in RTW states continued to perform well without bailouts.

In 2012, Michigan – the state that gave birth to the United Automobile Workers union – became the 24th state to adopt RTW. Gov. Rick Snyder said he believed the legislation would lead to “more and better jobs for Michiganders.”

It is not just employers who benefit from right to work. It is anyone and everyone who seeks employment.

Compulsory unionization represents an unfair and counterproductive abridgment of the freedom of people to offer their services to the highest bidder; they should not be locked out of an opportunity because a union has been granted a broad monopoly over the supply of labor.

Andrew Wilson is a resident fellow and senior writer at the Show-Me Institute, a free-market think tank based in St. Louis. He can be reached at andrew.wilson@showmeinstitute.org.

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