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Right-to-Work lowers wages with no reward
Yesterday, Indiana Governor Mitch Daniels signed into law legislation making Indiana the first Right-to-Work state in the industrial Midwest. While Indianapolis union members protested the bill for over a month, it took a speedy route through the Indiana House of Representatives and its Republican-controlled Senate.
Right-to-Work bans workers unions from demanding union membership or dues from every employee of a company, although unions would still supposedly represent them all. At the beginning of the year, Indiana Republicans announced that the bill would be their “top priority”. Their argument is workers unions’ costs are a burden on American job creation, and that representation in the workplace is a dispensable cost of greater employment opportunities.
But Right-to-Work conditions in the state will not beget lower unemployment—only a lower standard of living for the working class. This is purely a political move by conservatives to break consistently Democratic unions and empower employers to cut wages and benefits. According to studies by the Economic Policy Institute, the bill will decrease the Indiana worker’s annual average income by $1,500, along with health insurance and other benefits, but would fail to boost local job-creation. If anything, this bill will only lower consumption and disposable income for the vast majority of Indiana workers—a far cry from ameliorating the rust belt’s economic woes.
From an economic standpoint, it is far wiser for government to target and fund research and infrastructure. If entrepreneurs decide to produce goods in the United States today, it is because of the transportation and communication opportunities provided by highways and broadband, better-trained workers, and a stable political situation. Lowering workers’ pay will only decrease standard of living, and not stimulate the economy
More importantly, Right-to-Work effectively breaks the power of unions, which remain the only powerful mechanism for workers demanding better wages and working conditions. In the midst of a fragile recovery, Right-to-Work bills destroy employees’ power and increase opportunity for workplace exploitation. Workers in this country should have the right and opportunity to organize, so their collective voice can counter the immense wealth and political clout of their employers.
Martin Luther King, Jr. warned against “false slogans such as ‘right to work,’ whose purpose is to destroy labor unions and the freedom of collective bargaining by which unions have improved wages and working conditions of everyone.” Right-to-Work, like so many other policies, is a question of political priorities, and Indiana’s government has chosen to represent the corporation over the common worker, effectively hurting the common American and inhibiting economic growth.