RTW will have major negative impact on workers, state’s economy, businesses

Panel discussion looks at what’s next after RTW passes here

That the so-called “right-to-work” law will have minimal to no impact of Missouri’s ability to draw new businesses, but will have major negative impacts on the state’s workforces and economy were several conclusions at a recent panel discussion sponsored by the St. Louis Regional Chamber’s (SLRC) Economic Growth & Fiscal Policy Issue Committee designed to determine the impact of a RTW law in Missouri.

Noting surveys by Area Development magazine of site selection consultants, SLRC Director of Business Research and Analysis Tim Alexander said that the issue of “right-to-work” was 18th in the rank of important issues companies considered when determining where to locate a new plant. Top of the list were availability of skilled labor. (See chart)

Citing extensive research, Alexander confirmed that RTW would result in:

• Decreased economic mobility
• Less workplace safety
• Decreased political support for workers
• No effect on manufacturing
• No effect on business formation
• No effect on economic growth
• Positive effect on business incomes

HURT UNION MEMBERSHIP

The contention that RTW doesn’t impact union membership was disputed both by Alexander who pointed out that a “1987 study estimated union membership drops by five to 10 percent in the first five years after RTW,” and Ed Finkelstein, Labor Tribune publisher, presenting the union’s perspective.

“That’s the real reason for this law, to castrate the union ‘s ability to fight for and protect workers by decimating the union’s finances which impacts its ability to hire staff and fight for worker issues,” Finkelstein said. “The only ones benefiting will be the huge corporations who, when they can pay workers less, will fatten their bottom lines and their bonuses and stock options.”

Expertly outlining the legal aspects of RTW was attorney Steve Smith with the law firm of Littler Mendelson. His presentation indirectly gave lie to RTW supporter charges that workers are “forced” to join the union in order to get a job. He pointed out that federal law protects workers’ rights to not join a union, but if there is a negotiated union shop clause in a contract non-members do have make a fair share payment to help cover the union’s overhead costs just as members pay dues.

He correctly pointed out that under RTW, a worker does not have to pay dues or a fair share fee but still gets all the services of the union and becomes a “free rider” letting union members pay all the costs while the “freeloader” still gets all the benefit.

ANTI-DEMOCRATIC

Finkelstein pointed out that RTW is both “anti-democratic” and gives lie to the Republican mantra of promoting less government intervention in business.

• RTW prevents a company and a union from freely determining if they want a union security clause in a contract. “This is government intervention at its worst. If the company doesn’t agree, it’s not in the contract. Under RTW, the company has no choice; the government is telling it what it can, and can’t do.”
• If the union and the company agree on a union shop clause, it them must be accepted by a secret ballot vote of the membership.

Supporting those points, Alexander research noted that 19 percent of contracts in free-bargaining states did not have a union security clause.

NOT MORE JOBS

And as for the RTW promise of creating more jobs, Finkelstein called it a “bait and switch” because it was not true. To make his point, he noted that last year, Missouri created 57,100 new jobs that were more than ALL of the state’s RTW neighbors.

“That was more than Kentucky, Nebraska, Iowa and Arkansas combined where a total of 44,500 new jobs were created. And two of our RTW neighbors, Kansas and Oklahoma, lost jobs in that period.”

IMPACT ON WAGES

While noting that there are varying research results over the impact of RTW on wages, Alexander did note that one study “found that the mean effect of RTW legislation is a 3.2 percent reduction in wages.”

Finkelstein was more specific. Based on data from the Bureau of Labor Statistics, it shows that under RTW:

• The average worker’s take home pay is $6,109 LESS in RTW states and
• Median household income is $8,174 LESS in RTW states.

As part of his presentation, Alexander had a slide that compared union vs non-union hourly wages in 15 categories. It was shocking. The union wages in all categories outpaced the non-union. (See chart)

IMPACT ON STATE, BUSINESSES

Finkelstein pointed out the potential financial disaster for Missouri, already suffering lower tax revenues from recent rich-guy and corporate tax cuts, will grow worse as lower worker wages will mean even less tax revenues and all the negative impact that will have.

“The impact will be felt hardest on the small and medium business,” Finkelstein stressed. “With less spendable income, any business depending on retail sales will suffer. Meanwhile, the big companies, paying lower wages, will fatten their bottom line and their executive bonuses and stock options. Workers wages go back into the economy, not a stock portfolio.

“Even charities will suffer; with lower wages, workers will have less to donate to charity and unions, who by a Labor Tribune survey over the past four years, have donated $7.3 million in cash and free services, that will undoubtedly have to be cut, further decimating non-profit groups as well as the state’s economy,” Finkelstein stressed.

Add to that the $60 million a year the union’s spend for skill training through their apprenticeship programs, efforts that could be curtailed to an unknown extent, and you begin to get an understanding of the unseen impact of RTW, he added.

Finkelstein concluded by pointing out that only one membership organization in America is forced by federal law to provide its services to non-members: the union.

“If you want the Chamber’s services, you join and pay dues. If you want to be a lawyer, you must belong to the Bar Association and pay their dues or you don’t practice law. Forcing dues-paying union members to support non-paying freeloaders flies in the face of fairness, decency and the American way.”

Program moderator was Charlie Hinderliter, the Chamber’s Advocacy Outreach Manager.

The St. Louis Regional Chamber has not taken a position on RTW. It also was neutral in the 1978 defeat of RTW by a two to one margin by Missouri voters.