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Backed by corporations and wealthy interests, legislation prohibiting employers and unionized labor forces from agreeing to contracts calling for workers in collective-bargaining units to share in the costs of representation – sought under the misleading name “Right-To-Work” – is slowly growing.
By BILL KNIGHT
Retired WIU Journalism Professor
Backed by corporations and wealthy interests, legislation prohibiting employers and unionized labor forces from agreeing to contracts calling for workers in collective-bargaining units to share in the costs of representation – sought under the misleading name “Right-To-Work” – is slowly growing. But recent “Right-To-Work” (RTW) laws have had negative consequences for many Midwest workers, according to a study released this month by researchers Robert Bruno of the University of Illinois at Urbana-Champaign and Frank Manzo IV from the Illinois Economic Policy Institute.
Specifically, there are significant differences between RTW states and Collective Bargaining (CB) states. Conspicuously, workers in Indiana, Michigan and Wisconsin earned 8 percent less per hour on average than their counterparts in the CB states of Illinois, Minnesota and Ohio.
More broadly, RTW is contributing to the shrinking middle class in the Midwest.
The researchers’ analysis focuses on labor markets in the six Midwest states from 2010 through 2016. Indiana, Michigan and Wisconsin all enacted RTW laws during this time, providing a regional experiment on the laws’ effects. Besides neighboring the RTW states, Illinois, Minnesota and Ohio serve as a practical comparison group because they didn’t have RTW laws at the beginning of the time frame – and still don’t.
Here’s a snapshot of key negative consequences:
The percentage of unionized workers in the Collective Bargaining states of Illinois, Minnesota and Ohio is 13.66 percent, and in the Right-To-Work states of Indiana, Michigan and Wisconsin 11.5 percent – more than 2 percent lower. That affects pay, too. So the average wage in the Collective Bargaining states of Illinois, Minnesota and Ohio is $24.29, and in the Right-To-Work states of Indiana, Michigan and Wisconsin $22.34 – more than 8 percent lower.
"Economic studies consistently show that RTW reduces worker earnings by 2 percent to 4 percent,” the authors say. “By reducing unionization, RTW has helped to redistribute income from middle-class workers to the wealthy, boosting owner income by 2 percent with “little ‘trickle-down’ to the largely non-unionized workforce.”
The researchers concede that the -8.03 percent downturn could be due to factors other than whether the state enacted a RTW law, such as educational attainment, occupation and demographics.
“[However,] after accounting for these and other important factors, the analysis finds that the introduction of RTW laws has reduced the unionization rate by 2.1 percentage points and lowered hourly wages by 2.6 percent in Indiana, Michigan, and Wisconsin,” Bruno and Manzo report.
RTW laws have especially hurt jobs that have traditionally provided middle-class careers for Midwestern workers. As examples, RTW has statistically reduced the hourly earnings of construction workers by 5.9 percent, service workers (including police officers and fire fighters) by 3.1 percent, and of workers in professional, educational, and health occupations by 1.9 percent, they show.
Further, when considering workers’ educational attainment, RTW has had little impact on workers with Master’s degrees or with professional or doctorate degrees, but profoundly harmed workers with Bachelor’s degrees, Associate’s degrees, and some college short of graduation – decreasing their wages by more than 3 percent.
Even worse – considering wages in the context of inflation, measured by the Consumer Price Index – the 2.6-percent wage decline in RTW states comes along with a 2.4-percent rise in prices from a year ago, according to the most recent report from the Bureau of Labor Statistics. Consumer prices in the Midwest increased over that 12-month period, led by a 38.3 percent increase in motor fuel prices, a 17.7-percent rise in overall energy prices, and a 10-percent increase in nondurable goods less food.
Combined, that means workers in RTW states face a net loss of 5 percent of their disposable incomes.
Once more, Right-To-Work has been proven to be a negative for regular working people, so it’s increasingly necessary to organize against the scheme – to prevent its expansion or to repeal the harmful law.
Contact Bill at [email protected]; his twice-weekly columns are archived at billknightcolumn.blogspot.com