Right-to-work laws: liberty, prosperity, and quality of life.

• Author: Vedder, Richard
• Position: Report

The most essential ingredient embodied in the liberty championed by the classical liberal writers of the Enlightenment and beyond is individual choice and right of expression--the right of persons to say what they think, decide for themselves what groups that want to join, what religion that want to profess, what person they want to marry, what goods they want to buy or sell, and what persons they want to represent them where necessity requires collective decision-making. One important economic dimension of individual liberty is the right to sell one's labor services without attenuation--that is, without limits on the terms of the agreement (e.g., wage rates and hours of work), or who will represent the worker in reaching those terms.

The eroding of employment liberty in the United States had begun before the 1930s, with various sorts of state laws restricting hours and setting minimum wages, but in 1930 America was still largely governed by an employment-at-will standard where employers and employees could freely "truck and barter," to use Adam Smith's phrase, without major outside interference.

Labor legislation in the early 1930s such as the Davis-Bacon Act and, to a lesser degree, the Norris-LaGuardia Act began to chip away at bargaining freedom, but it was the National Labor Relations Act of 1935 (Wagner Act) that dramatically revolutionized employment contracts, severely restricting the freedom of workers and employers to reach individual bargaining arrangements. Required union representation elections allowed for a small majority of workers to force other-workers to join a union or lose their job. Under the closed shop arrangement permissible under the Wagner Act, unions controlled who was hired, since union membership was mandatory for employment.

With the return to high employment and prosperity with World War II and the postwar boom, concern about excessive union power grew, probably most symbolized by strikes of coal miners during 1946 that threatened significant hardships on seemingly uninvolved Americans. In 1947, the Republican majority in the 80th Congress enacted the Taft-Hartley Act, and Congress overrode a veto of the legislation by pro-union President Harry Truman. Fortunately, there was one important provision (section 14b) in Taft-Hartley that works to significantly lower the infringements on liberty and adverse economic effects of the law--namely, state governments can pass right-to-work laws that outlaw union shop collective bargaining agreements, permitting individual workers to decide whether they want to join a labor union or not. At present 22 states have adopted right-to-work laws. (1) None of the 14 states in the Northeast or East Central parts of the country (industrial Midwest) have these laws, as unions have been successful in thwarting their passage. Outside of that area, however, a solid majority of Americans (60 percent) now live in right-to-work states.

The Impact of Right-to-Work Laws on Migration

Indeed, an important untold story is the rapid growth of population living in right-to-work states relative to states refusing to grant workers the right to reject unionization. In 1970, 28.5 percent of Americans lived in right-to-work states; by 2008, the proportion had risen to nearly 40 percent (to over 121 million). (2) The population living in right-to-work states more than doubled, compared with a modest 25.7 percent increase in non right-to-work states. Moreover, only a small proportion (about 15 percent) of the increase in the proportion of Americans in right-to-work states is due to states newly enacting right-to-work laws. Indeed, in the last 20 years, only one state (Oklahoma) has adopted a new right-to-work law. Most of the population gains arose from greater population increases in right-to-work states.

Undoubtedly, the most important reason for the increase in the percentage of U.S. population living in right-to-work states has been because there has been a huge migration of persons from the nonright-to-work states to those allowing greater personal liberty with respect to employment. Unions cannot erect Berlin-type walls to prevent people fleeing states where employment contracts are constrained by law. Consequently, internal in-migration into the rightto-work states has been astonishing. For example, U.S. Census Bureau population estimate data show that more than 4.7 million Americans moved from the non-right-to-work states to right-to-work states from April 1, 2000, to July 1, 2008--on average more than one person every single minute of that eight years (U.S. Bureau of the Census 2009b). Presumably people move to improve the quality of their lives; they perceive that they likely will be happier in their new home than in their old one. Thus, this immense human movement...