Labor Unions Just Lost Even More Power
This article originally appeared in MarketWatch.
Gov. Scott Walker on Monday signed legislation that made Wisconsin the 25th “right-to-work” state. Residents of the Badger State will no longer be required to join a union as a condition of employment.
With half the states in the U.S. now designated as right to work, the rest will feel pressure to join to stay competitive. Illinois, for instance, is under pressure because it borders Wisconsin, Indiana, Michigan and Iowa, now all right-to-work states. It is now becoming increasingly easier for businesses to migrate to nearby right-to-work states.
In Kentucky, another Illinois neighbor, 10 counties have passed right-to-work legislation, and six others have introduced similar legislation. (The state has 120 counties.) Just as certain jurisdictions, such as Seattle and San Francisco, have voted to raise their minimum wage, others are voting to become right to work. Wisconsin and Kentucky follow Indiana and Michigan, which became the 23rd and 24th right-to-work states in 2012.
Burgeoning right-to-work measures are a reaction to an increasingly bold National Labor Relations Board, which is overturning decades of precedent to make it easier for unions to organize workers. The NLRB, supposedly an impartial arbitrator between unions and employers, has reduced the time workers are given to consider whether they want to vote for union representation. It has allowed unions to organize small units of workers within firms. Most recently, it has defined McDonald’s USA as joint employer of McDonald’s franchises, a move that, if upheld by the courts, could upend the franchise business in America.
When states pass right-to-work laws, they protect their residents from being forced to pay 2% to 4% of their paychecks in union dues, initiation fees of about $50, and contributions to failing pension plans. Dues and initiation fees are often used to pay for political contributions, and some pension plans may not exist when the new employees are ready to retire.
Right-to-work laws make it easier for states to attract business, because many companies prefer to locate in right-to-work states. That is one reason that Boeing chose to open a new plant in South Carolina to build its Dreamliner aircraft, rather than to expand its existing plants in Washington state.
Wisconsin, with its new law, is siphoning business from Illinois. Toolmation Services, a manufacturing company, announced last month that it is relocating from Illinois to Kenosha. Illinois is one of the few states in the region that does not have right-to-work laws.
New union election rules, also known as “quickie-election” or “ambush-election” rules, will become effective April 14. Under the new rules, the election goes from about 37 days to 17 days. That gives little time for workers to consider whether they want to join the union. Such rules will motivate more states and counties to move to right to work to give workers a choice to opt out of unions.
Only after the speedy election would there be a hearing to decide what is the appropriate bargaining unit. That is puzzling because the choice of bargaining unit, defined as the group of workers who would be represented by the union, could determine the outcome of the election.
Republican NLRB members Philip Miscimarra and Harry Johnson III, in a dissent from the rule, wrote: “To state the obvious, when people participate in an election, it is significant whether they actually have a right to vote, whether their vote will be counted, and whether the election’s outcome will even affect them. In this respect, the Final Rule’s approach would be intolerable in every other voting context, whether it involved a national political election or high school class president.”
Putting off the decision about voter eligibility makes it easier to swing the final decision toward the union. Say that if all employees in a manufacturing plant cast a vote, but only a minority wants union representation. Under usual circumstances, the union would lose. But if the bargaining unit is redefined after the vote to include only those sections of the workforce that voted for the union, the union wins. That is the advantage to the union of vote first and decide later.
With the tight schedule, the employer has a limited chance to present a set of facts to workers. Unions, by filing a petition, will already have presented workers with their viewpoint. In 1959, then-Sen. John F. Kennedy said “there should be at least a 30-day interval between the request for an election and the holding of the election.” That was “to safeguard against rushing employees into an election where they are unfamiliar with the issues.”
Quickie-election rules work the other way. Neither employees nor unions can take the opportunity to discuss the issues clearly. It limits free speech at a time when workers need to know the facts.
Quickie-election rules have numerous other problems, too. Just to mention one: Employers have to turn over not only company email addresses to the union, and allow the union to use company email to communicate with workers, but also personal email addresses. Even if employees do not want the union to have their personal email addresses, they have no right to privacy.
At the same time as the ambush-election rules, the National Labor Relations Board has shrunk the size of potential bargaining units. It used to be that unions would have to gain a majority of employees engaged in the same task at the same company — say, mechanics working for Boeing, or retail clerks working for a department store. In a decision involving Macy’s in 2014, the board allowed unions to organize any subset of employees, as long as they had a “community of interest.” Cosmetic workers at Macy’s, or shoe salesmen at Bergdorf Goodman’s, could vote to be represented by a union without the rest of the store going along.
Unless employers can prove that a larger group of workers has a “community of interest,” unions can carve up workplaces into micro-units, depending on which employees are interested in signing up. An employer could have to negotiate with different unions at the same store, and an employee has a greater chance of being swept into a union against her will.
Right-to-work initiatives are growing because they give state residents and businesses some measure of protection against the increasingly aggressive NLRB. Until the NLRB is checked, this trend will only continue.
Diana Furchtgott-Roth is the director of the Economics21 program at the Manhattan Institute for Policy Research. You can follow her on Twitter here.
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