“Right-to-Work”The Workers Tax

It’s Bad for AmericaIt’s Bad for Working Families

What is “Right-to-Work?”

The 1947 Taft-Hartley of the National Labor Relations Act created a loophole (section 14b) in which states can make union-security clauses illegal in collective bargaining agreements

Under a RTW law, employees cannot be required to pay union dues as a condition of employment

Last state to pass RTW was Oklahoma in 2001

Most states passed RTW during 1947-1959 period

Paying Fair Share in Non-RTW States Union security clause in non-RTW states

Fair share Workers in Union positions, positions which receive all of

the wages and benefits of union representation, must pay the costs of that representation

RTW states create a “Right-to-Freeload” Workers get all the same wages and benefits Union must represent them at own expense

Right-to-Work Laws are a Relic of the Past The RTW campaign began in 1947

To date, more than 60 years later, less than half of our states (22) have adopted a RTW law

RTW laws are out-dated, redundant, and a relic of a partisan, anti-union agenda of another era

Economic Policy Myths

Economic Development Myths

RTW is not among the most important factors related to business decisions on facility location

Incentive packages offered by states are the most important factor: tax rates; education of workforce; cheap energy; abundant

labor supply; cheap land; transportation; climate

Good growth vs bad growth is the real issue

RTW lowers per capita incomes and the standard of living

Oklahoma “Job Creation” Myth To attract new businesses in the 1990s, began giving 5%

cash back on payrolls for creating new jobs No requirement on how money is spent

Now gives 10% cash back on payrolls of jobs with annual salaries or $94,000 or more No requirement on how money is spent

RTW has nothing to do with this situation

Company Location Myth In 2010, Area Development magazine ranked the

top 10 states for site selection based on survey of site selection industry consultants Indiana ranked number 6 out of 10

The survey revealed 8 main criteria used by consultants to determine site location selection None of the 8 criteria mention RTW

Company Location MythIn 2010, Chief Executive magazine polled 600 U.S. CEOs about site selection criteria:

Criteria were grouped and rated as follows: Tax and regulation; workforce quality; living environment

Under "workforce quality" the 5 most important items were: Employee work ethic; general education level of workforce;

competitiveness of wage rates; employees cooperative relationship with management; availability of labor with specialized skills

RTW was not a factor in site location selection Education of workforce is more important factor in site selection

Actual Buying Power Myth Actual buying power is commonly measured as BPI

6 of the top 10 metro areas with the highest BPI in the U.S. are in non-RTW work states (2009 data)

29 of the top 50 metro areas with the highest BPI are in non-RTW states (2009 data)

Workers in RTW states do not enjoy greater buying power than workers in non-RTW states

Competition Myth Off-shoring of jobs from the U.S. mainland

Overwhelming majority of U.S. jobs off-shored are non-union jobs Not a choice between union wages and non-wages Choice between living wages and third world wages Never seem to compete on executive’s wages

If entire U.S. workforce made the federal min. wage of $7.25 per hr - still cannot compete with workers in third world nations The 2010 average wage for a Mexican worker was approximately $2.00

per hr with no benefits

“Falling Tide” Effect for All Workers Reverse of “Rising Tide" effect on wages and benefits

Unions lose bargaining strength Resulting drop in wages and benefit levels lowers wages and benefits

throughout the entire community

This happens in the reverse manner that the "rising tide" effect raises wages and benefit levels throughout an entire community

Right-to-work directly impacts floor and ceiling wages in every community within the state Impacts every worker, not just union workers

Economic Development MythsWorkers Lose Wages Under Right to WorkWorkers Lose Wages Under Right to Work

Source: U.S. Bureau of Labor Statistics

$0

$100

$200

$300

$400

$500

$600

$700

$800

Ave

rage

Weekly

Wage

All Workers Women Workers Black/AfricanAmericanWorkers

Hispanic/LatinoWorkers

Asian Workers

Union States

RTW States

Economic Development MythsWorkers Lose Wages in Right to Work StatesWorkers Lose Wages in Right to Work States

$560

$580

$600

$620

$640

$660

$680

$700

$720

$740

Average Weekly Wage

Union Shop States RTW States Indiana

Source: U.S. Bureau of Labor StatisticsSource: U.S. Bureau of Labor Statistics

Families Lose Income in Right to Work StatesFamilies Lose Income in Right to Work States

•Source: U.S. Census BureauSource: U.S. Census Bureau

$44,000

$46,000

$48,000

$50,000

$52,000

$54,000

$56,000

$58,000

Median Family Income

Union Shop States RTW States Indiana

What Workers Lose Under Right to Work What Workers Lose Under Right to Work

16.8%

17.3%

15.0%

15.5%

16.0%

16.5%

17.0%

17.5%

18.0%

Weekly Wage Cut Annual Family Income Loss

•Estimates based on

Economic Activity is Lower in Right to Work StatesEconomic Activity is Lower in Right to Work States

$0

$50

$100

$150

$200

$250

Average Gross State Product (in

billions)

Union Shop States RTW States Indiana

Source: U.S. Bureau of Economic Analysis

Race to the Bottom If we attempt to compete with third world wages, it

will be a race to the bottom The first one to work for free will win!

We are a consumer-based society For our economic engine to run, workers

need disposable income to spend Lowering wages in order to compete at a level

we can never attain is economic suicide

Forced Unionism Myths

“Forced Unionism” Argument

Workers are ‘forced” to join a union to keep their job

Workers are “forced” to pay union dues for union political activities with which they do not agree

Facts About “Forced Unionism”

A “Right-to-Work” state law is redundant, out-dated, and unnecessary

Federal law has protected the rights of workers from “forced unionism” for decades

Ultimately, workers are free to choose where to work

The “Forced Unionism” Myth

Fact #1: Workers cannot be forced” to join a Union

1947 Taft-Hartley amendments to the National Labor Relations Act Right of workers to refrain from joining a union was

expressly added to Section 7

Affirmed by the 1963 U.S. Supreme Court case NLRB v. General Motors Corp. Workers cannot be forced to belong to a union

*373 U.S. 734 (1963)

The “Forced Unionism” Myth

Fact #2: Workers cannot be required to pay for Union political activities with which they do not agree

Decided by the 1988 U.S. Supreme Court case Communications Workers v. Beck Workers cannot be forced to pay union dues for

political activities

*487 U.S. 735 (1988)

Worker Choice 93% of the private sector is non-union

Only 7% of the U.S. private sector workforce is unionized

Workers who choose not to pay their fair share of union dues for the good wages, benefits, and representation services they receive may simply choose to work elsewhere

Non-union companies are continually hiring Wal-Mart McDonald's

Workers are not bound to work in a union job in which they feel uncomfortable Workers may terminate the employment relationship at any time Workers are free to move to an existing RTW state

“Forced Representation” Unions in RTW states are required, by force of law,

to represent non-contributors and non-members

Only time in U.S. history that an organization has been "forced" to represent non-members and non-contributors and bear the costs of that representation

Federal or state government have never required a U.S. business to perform a similar task

The End