Right-to-work laws make unions work harder for their members

Right-to-work laws make unions work harder for their members
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The Supreme Court just ruled in favor of Janus in the hotly debated Janus v. the American Federation of State, County, and Municipal Employees (AFSCME). While some claim that the decision is a win for “big business” and a loss for workers, my research suggests the opposite.

Forcing individuals to pay union dues, especially when they do not want representation from the union or agree with the union more broadly, is coercive — plain and simple. What’s more controversial, however, is whether there are economic reasons for mandating employees in a unionized workplace pay union dues.

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According to the unions, allowing workers the discretion to voluntarily pay union dues leads to free-riding and the deterioration of collective bargaining agreements.

 

My research paper, “Do Right-to-Work Laws ‘Work,’” used states as a laboratory for studying these questions. Based on a unique partnership with Gallup and its U.S. Daily Poll, I examined how the adoption of right-to-work (RTW) laws across states affects worker well-being.

Gallup surveys 1,000 people per day, which allowed me to see not only a range of demographic characteristics for each person, but also their stated life satisfaction and beliefs about the economy.

My statistical model compares individuals in the same state before versus after the adoption of RTW laws after controlling for many other factors. I find that individuals experience a 0.029 increase in the standard deviation of life satisfaction and a 0.054 increase in their economic sentiment after their state adopts RTW laws. Interpreting these estimates is not easy: Are they big or small?

Let’s put these numbers in perspective. College attainment is one frequently cited metric and determinant of individual well-being.

When comparing college attainment with the adoption of RTW laws, I find that the adoption of these laws is associated with roughly 10 percent of the overall increase in well-being that is associated with college attainment.

When you think about the benefits of a college degree in terms of long-run skill accumulation and job market opportunities, 10 percent is quite large!

What’s especially interesting is that these benefits are concentrated among union workers. Perhaps counterintuitively, union workers appear better off after the adoption of RTW laws.

While my full paper explores four different competing explanations, my data points in favor of only one of these four mechanisms: RTW laws force unions to become more competitive.

When unions are guaranteed a permanent income stream, they don’t need to work as hard to win the hearts and minds of their employees; that is, they face weaker incentives to provide valuable services. The adoption of RTW laws changes that by making union dues a voluntary contribution.

Just imagine if you were required to eat at a restaurant even if you didn’t like its food! Generally speaking, monopolies reduce the quality of a product or service.

Pinning down what’s going on in the data is not easy. But Gallup includes several survey questions that let me hone in on these potential competitive effects.

I found, for example, that employees are 4-percent more likely to report that their manager treats them as a partner at work and that their workplace is more open and trusting after the adoption of RTW laws.

Because RTW laws mean that unions do not have an exclusive right to bargain for all employees in a firm, these laws may encourage greater collaboration with employers to find diplomatic solutions and compromises.

We need to do away with all the finger pointing. Why do we allow for such animosity to take root in what should be a civil discussion about how to create fertile conditions for learning and serving in the workplace?

Supporters of unions routinely demonize supporters of RTW laws, claiming that they’re collaborating with “big business” against the American worker. But, my research shows that the American worker, especially those in unions, likes RTW laws.

Policymakers and activists would do better to recalibrate their perspective with a simple question: What conditions do workers need to make an impact? It’s hard to imagine an answer to that question that does not include choice and personal agency, which are precisely what right-to-work laws provide.

Christos Makridis serves as a digital fellow at the MIT Sloan Initiative on the Digital Economy and as a non-resident fellow at the Harvard Kennedy School of Government's Cyber Security Initiative. He earned his doctorates in management science & engineering and economics at Stanford University.