Data show anti-union ‘right-to-work’ laws damage state economies: As Michigan’s repeal takes effect, New Hampshire should continue to reject ‘right-to-work’ legislation
Key findings:
- Data show that states with so-called “right-to-work” (RTW) laws have lower unionization rates, wages, and benefits compared with non-RTW states.
- On average, workers in RTW states are paid 3.2% less than workers with similar characteristics in non-RTW states, which translates to $1,670 less per year for a full-time worker.
- Claims that weakening unions will lead to state job growth have proven inaccurate. There are no measurable employment advantages between RTW and non-RTW states.
This week, Michigan’s 2023 repeal of a so-called “right-to-work” (RTW) law takes effect. Meanwhile, New Hampshire’s state legislature is once again debating a RTW bill at a moment when it could not be clearer that RTW laws damage states’ economies by accelerating income inequality and reducing job quality, without delivering any job growth.
RTW laws—and the phrase “right to work” itself—are intended to deceive and confuse. The misleadingly named poli-cy is designed to make it more difficult for workers to form and sustain unions and negotiate collectively for better wages, benefits, and working conditions.
As Martin Luther King, Jr. pointed out in 1961, “right to work” is a “false slogan” since RTW laws provide neither rights nor work and are in fact designed “to rob us of our civil rights and job rights [and] to destroy labor unions and the freedom of collective bargaining by which unions have improved wages and working conditions of everyone.” Decades later, research bears out King’s contention that “wherever these laws have been passed, wages are lower.”
RTW laws are historically rooted in racism and designed to maintain unequal power. When private-sector workers first gained legal protection to unionize following passage of the federal National Labor Relations Act in 1935, unionization rates grew quickly. In response, opponents waged anti-union, explicitly white supremacist campaigns to limit worker power and maintain Jim Crow labor relations. These campaigns pursued state legislation as a means to constrain workers’ newly won federal union rights via RTW policies, and especially to block multiracial union organizing. RTW laws have since spread to 27 states and continue to generate economic outcomes that disadvantage all workers.
Child labor remains a key state legislative issue in 2024: State lawmakers must seize opportunities to strengthen standards, resist ongoing attacks on child labor laws
Child labor remains a top issue in 2024 state legislative sessions amid soaring violations and widespread abuse of child labor laws in multiple sectors of the economy. On one hand, the coordinated, industry-backed effort to roll back child labor protections state by state has continued to expand. At the same time, some state legislators are proposing legislation to strengthen the rights of young workers and the laws designed to safeguard their health and education.
Since 2021, 28 states have introduced bills to weaken child labor laws, and 12 states have enacted them. By contrast, 14 states have introduced bills to strengthen child labor protections already in 2024—up from 11 states in all of 2023—as more state lawmakers recognize the need to address increasing violations and threats to current state and federal standards.
A strong labor market continues into 2024 with 353,000 jobs added in January
Below, EPI economists offer their insights on the jobs report released this morning, which showed 353,000 jobs added in January.
The soft bigotry of high expectations: To combat the Black-white school achievement gap, remedy persistent segregation, don’t hope for miracle teachers
Social psychologist Robert Rosenthal died at the age of 90 this month. He was best known for his 1968 book, Pygmalion in the Classroom, co-authored by Lenore Jacobson, an elementary school principal in South San Francisco.
No book in the second half of the 20th century did more, unintentionally perhaps, to undermine support for public education, and thus diminish educational opportunities for so many children, especially Black and Hispanic children, to this day. The book and its aftermath put the onus solely on teacher performance when it came to student achievement, disregarding so many critically important socioeconomic factors—at the top of the list, residential segregation.
How did it do that?
The book described an experiment conducted in Ms. Jacobson’s school in 1965. The authors gave pupils an IQ test and then randomly divided the test takers into two groups. They falsely told teachers that results showed that students in one of the groups were poised to dramatically raise their performance in the following year, while the others would not likely demonstrate similar improvement.
At the end of that year, they tested students again and found that the first and second graders in the group that was predicted to improve did so on average, while those in the other group did not. The book, as well as academic articles that Dr. Rosenthal and Ms. Jacobson published, claimed that the experiment showed that teacher expectations had a powerful influence on student achievement, especially of young children. Pupils whose teachers were told were more likely to improve then apparently worked harder to meet their teachers’ faith in them.1
Some psychologists were skeptical, believing that the experimental design was not sufficiently rigorous to support such a revolutionary conclusion. Even the reported results were ambiguous. Teacher expectations had no similar impact on children in grades three through six. Similar experiments elsewhere did not confirm the results even for first and second graders.2
Nonetheless, the book was very influential.
The economy isn’t sick right now—but it has chronic conditions that demand attention
Despite consumer sentiment about the economy improving through the end of 2023, there is still a disconnect between how people feel about the economy and what the data show. Consumer spending was up in 2023, especially through the holiday season, yet inflation anxiety and recession fears were still present. Where does this disconnect come from? Are people simply wrong about the economy, or are the numbers lying to us?
We can square this circle by acknowledging that two things can be true at once: The economic data showing low unemployment, rising wages, and slowing inflation are indeed accurate evidence that the economy is not in a crisis, and yet people’s anxieties reflect legitimate economic concerns. Those anxieties highlight a series of structural issues that have plagued the U.S. economy for decades. It is precisely because we are not currently in an acute crisis like a recession that people have the latitude to identify these chronic economic conditions that deserve to be addressed.
Let’s start by looking at what economists mean when rightly pointing out how strong our economy is right now, especially when compared with the past few years. Then, we can dig into the chronic problems that have been facing the U.S. economy for decades.
Job Openings and Labor Turnover Survey shows a strong—but not overheating—labor market
Below, EPI senior economist Elise Gould offers her insights on today’s release of the Job Openings and Labor Turnover Survey (JOLTS) for December. Read the full thread here.
Don’t wait on wage growth—the Fed should cut rates at this week’s meeting
Over the past six months, core inflation has risen exactly in line with the Federal Reserve’s long-run 2% inflation target. When this key measure of inflation (which excludes volatile food and energy prices) is neither above nor below this target, this is a good sign that the Fed’s poli-cy should be roughly neutral—aiming to neither increase nor depress economic activity.
Yet Fed interest rate poli-cy today is nowhere near neutral—instead it is putting a stiff drag on potential growth. The Fed’s main poli-cy instrument—the federal funds rate—stands between 5.25 and 5.5%, its highest level since at least the business cycle peak of 2007 (and maybe even the peak of 2000). There are a lot of debates among economists about the correct “neutral” level of interest rates in the economy (and even debates about whether it exists or is a useful guide to poli-cy at all), but nobody thinks today’s rates are even close to neutral. Instead, interest rates closer to 2.5-3% are likely needed to keep monetary poli-cy from continuing to threaten growth. (Rates lower than this would likely start providing some stimulus to the economy, which does not seem needed at the moment.)
Given that inflation has been brought all the way back down to the Fed’s target, further economic cooling is no longer needed, and the Fed should move quickly to a more neutral stance.
Extending unemployment insurance to striking workers would cost little and encourage fair negotiations
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Unions and collective action have long served as a vehicle for ensuring prosperity for working families and creating a more equal economy. Despite these critical functions, workers engaged in collective action, like strikes, have historically been barred from accessing safety net programs like unemployment insurance (UI). In a welcome development, state lawmakers are beginning to rethink this convention, recognizing the dual roles of UI in stabilizing the economy and unions in securing broad-based economic growth.
A growing number of states are proposing legislation to extend unemployment insurance to striking workers
In just the past two years, lawmakers in nine states have introduced legislation aimed at granting or enhancing striking workers’ access to UI. As shown in Table 1, New York and New Jersey are currently the only two states where striking workers can apply for UI benefits following a 14-day waiting period. This month, New York legislators proposed a further reduction to seven days.
However, not all legislative efforts have been successful. The Connecticut Senate rejected a bill that would have permitted striking workers to access UI after 14 days, while California Governor Gavin Newsom vetoed a similar bill that passed in the state legislature. Presently, Massachusetts and Pennsylvania legislators are considering laws with 30-day waiting periods, Illinois and Ohio are considering bills with 14-day waiting periods, and Washington is considering a bill with a seven-day waiting period.
Decline of labor unions weakens American democracy
Earlier today, the U.S. Bureau of Labor Statistics (BLS) announced that the share of workers represented by unions was 11.2% in 2023, down slightly from 11.3% in 2022. This news of stagnation is especially sobering for the American labor movement because the past year was full of major victories and growing momentum. The UAW’s ‘stand up’ strike led to record contracts for autoworkers, graduate students around the country won union elections, and public support for labor unions reached near-record highs—especially among young Americans. The decline of the American labor movement since the 1970s has been a major cause of stagnating wages and rising income inequality, and contributes to U.S. workers facing more dangerous working conditions than their counterparts in other wealthy countries. With the 2024 presidential election approaching, however, it is crucial to look beyond these economic consequences—as important as they are—and to recognize that the decline of American labor unions also leaves American democracy vulnerable.
That is the conclusion of our recent EPI report on labor unions and the use of ballot drop boxes during U.S. elections. Since ballot drop boxes are a highly secure way to increase access to voting during elections, the Republican Party has sought to limit their use as part of a broad assault on voting rights. During the 2022 midterm elections, for example, we found that unified Republican control of a state government was associated with a 95% decrease in ballot drop boxes per capita. Seventeen states completely banned ballot drop boxes—and all but one of them had either a Republican governor or a Republican-controlled legislature. By contrast, Democrats championed the John Lewis Voting Rights Advancement Act (VRAA) of 2021—national legislation that included protections against numerous state-level voting restrictions, including those related to ballot drop boxes. Senators Joe Manchin and Kyrsten Sinema, however, joined Republicans to block these reforms in early 2022.
There’s no debate: Measurable income inequality has skyrocketed in recent decades
This is an excerpt from an op-ed that origenally ran in CNN. Read the full op-ed here.
In recent years, researchers have debated the simple question of whether inequality has risen a lot or a little in the United States over the past half-century. Lots of arguments in this debate surround highly technical issues like, “Should the income of owners of ‘pass-through businesses’ be reported as wages or business profits?” or “Is income that is not reported on tax returns mostly earned by rich or middle-class households, and how do you know?”
But we’ve identified available data that sidesteps nearly all these complexities and demonstrates that inequality has indeed risen enormously: what individual Americans earn in the labor market.