Right to Work legislation is once again at issue in Indiana and a dozen other states where it would have been unthinkable only a few years ago.  It is a good time to review what economists know and do not know about the effects of Right to Work.

To begin with, it seems pretty clear to me that unions have, and always will be a part of the economic landscape.  They’ve been with us in some fashion for at least a millennium and nothing that survives that long without benefiting its members.  But there are different types of unions.  Most professional organizations and trade unions play a role in labor quality and promotion of the industry.  Government unions act primarily as bargaining units, while private sector industrial unions have a very different history.   It is these latter two that Right to Work legislation targets. 

Right to Work laws let employees work for unionized businesses without being forced to pay union dues or submit to rules established by a collective bargaining arrangement.  Union representatives rightly argue that most collective bargaining rules affect all workers and that exempting some workers from paying dues allows them to enjoy the benefits of a union without paying the costs.  Advocates of Right to Work legislation argue an improvement in the economy and fairness to workers who wish not to pay dues as reasons to adopt to the legislation.  Because my kids tell me I am under appreciative of fairness, I will focus on economic research. 

There is abundant research on the economic effects of Right to Work by economists of both the right and left.  The results are pretty clear that Right to Work legislation leads to increased employment.  Several studies at the county and state level that account for myriad other factors and trace the issue as far back as the 1940s support this finding.  The only questions are (1) Is it Right to Work alone, or other pro-business policies, that boost job growth? and (2) How big might the job growth be? 

Economists are mixed on the effect on wages.  Studies that look at states over time find that wages are unaffected by Right to Work laws, but it is true that states with lower wages are more likely to have Right to Work laws.  I have studied Right to Work and found that (1) Foreign direct investment was boosted by the legislation, and (2) Employment grew very slightly in Right to Work states (my study traced labor laws back to the Great Depression).  I found no change in wages. 

In the end, industrial unions are collapsing.  In the mid-1900s, one in three American workers was in a union.  Today that figure is one in eight, and more than half of those workers are in government.  Some claim that Right to Work laws are thinly veiled efforts to bust unions.  That may be, but it would seem to me that the fastest and easiest way to bust unions is simply let them keep on exterminating themselves.