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Want to Help Workers Work? Keep Virginia’s Right To Work Law

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Are a majority of Democratic candidates for the Virginia General Assembly “anti-worker?” Based on their response to a Virginia Chamber of Commerce survey, it would seem that way.

General Assembly candidates were surveyed on whether they would support Virginia’s Right To Work (RTW) laws. Republicans were unanimously supportive. Democrats were almost equally opposed to retaining the Commonwealth’s 72-year-old law, with only five responding they would keep it.

The “comments” section of the survey betrayed the ignorance of many candidates about the advantages of Right To Work, portraying the law as a Dickensian throwback pitting businesses against workers with some citing a questionable recent Oxfam survey (see accompanying column by Chris Saxman) ranking Virginia low on “best state for workers.”

The truth shows a very different picture. Study after study demonstrates that a state Right To Work law improves not only the opportunity for a worker to have a job, but also drives personal incomes higher.

These considerations are important. Republicans and Democrats alike have expressed concern about Virginia’s reliance on the federal government for jobs, whether directly or indirectly through federal contracting. Only by building and maintaining a robust manufacturing and high tech sector will Virginia retain, for example, CNBC’s ranking of Virginia as “Best State for Business.” In doing so, CNBC cited Right To Work laws as a factor.

The issue of a state’s labor laws is important to businesses of all stripes, and is among the reasons Amazon reversed its decision to build a second headquarters in New York City. Despite $ 3 billion in state subsidies, the tech giant walked when told by officials in the Big Apple that $150,000-a-year tech workers would have to join a union.

Simply put: Right To Work laws are attractive to employers. And without employers, there are no employees.

What does the evidence show? Do Right To Work laws help businesses or workers? The answer to both is “yes.”

In a May 2018 study, Dr. Jeffrey Eisenach, Managing Director at National Economic Research Associates and an adjunct professor at George Mason University examined data comparing economic outcomes in Right To Work states with non-Right To Work states, noting “the data is consistent with, and thus supportive of, the results of more than four decades of rigorous economic research.”

Whether private sector employment, the unemployment rate, manufacturing output or higher personal incomes businesses and workers in RTW states do better than those in non-RTW states. Between 2001 and 2016 …

  • Private sector employment in RTW states grew by 27 percent, compared with 15 percent in non-RTW states.
  • The annual unemployment rate in RTW states was, on average 0.4 percentage points lower than in non-RTW states. While four-tenths of one percent may not seem like much, if those non-RTW states had had the same unemployment rate as RTW states, there would have been 249,000 more Americans employed in 2017.
  • Real manufacturing output rose by more than 30 percent in RTW states compared with 21 percent in non-RTW states.

The reason all this is important? According to Eisenach’s study, higher growth rates translate into higher personal income, rising 39 percent in RTW states vs. 26 percent in non-RTW states.

This echoes a 2003 study conducted by Robert Reed for the Journal of Labor Research, finding wages 6.7 percent higher in RTW states than in non-RTW states.

Five states have passed Right To Work laws since 2012. Former union strongholds like Michigan, Indiana and Wisconsin have turned away from laws forcing workers into unions and those states have seen dramatic economic growth improving the condition of workers’ lives: In Indiana, factory payroll employment grew 9.4 percent; in Kentucky, $9.2 billion in new investments added 100,000 new jobs; in Michigan, the unemployment rate fell by 4.8 percent.

Virginia is in competition with each of those states for new business that will put more Virginia workers to work. Voters might well want to ask candidates favoring repeal of Right To Work why they want to put the Commonwealth at a competitive disadvantage … and in the process hurt the ability of workers to find a job and improve the lives of their families.

Chris Braunlich is President of the Thomas Jefferson Institute for Public Policy. 

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