At the beginning of February, Indiana Gov. Mitch Daniels signed into law H.B. 1001, a measure prohibiting union officials from taking money from employees’ paychecks as a condition of getting or keeping a job. Indiana thus became America’s 23rd right-to-work state.
Once the new right-to-work law takes effect, more than 40 percent of private-sector employees across the nation will hold jobs in states where forced union dues and fees are barred. That’s cause for opponents of compulsory unionism to celebrate.
Unfortunately, most media accounts adopted the rhetoric of union officials by characterizing Indiana’s new law as “anti-union.” If right-to-work laws are anti-union, so was Samuel Gompers, founder of the American Federation of Labor, the precursor to today’s AFL-CIO. At the 1924 AFL convention, Gompers declared: “No lasting gain has ever come from compulsion. If we seek to force, we but tear apart that which, united, is invincible.”
Gompers was a prophet. Today, nearly 90 years after his death, organized labor inflicts great harm on employees because of the twin evils of forced union dues and union monopoly bargaining. The latter is a system under which union members - as well as those who choose not to join a union - are subject to contract terms negotiated by the union brass.
Even a number of proponents of compulsory unionism concede that the best employees typically are hurt by union monopoly bargaining. One eminent example is Harvard economist Richard B. Freeman, who actually has commended union officials for being “remarkably successful in removing performance judgments as a factor in determining individual workers’ pay.”
An enormous share of the billions of dollars unions take in every year in mostly compulsory dues and fees goes to fostering the “compression of wages” in unionized firms: that is, benefiting some, typically less productive front-line workers at the expense of others. In the long run, all workers lose out when none has an incentive to excel. What else do unions with monopoly privileges do? The disclosure forms private-sector unions are required by federal law to file and other sources indicate that organized labor spends at least $1.4 billion per election cycle on electioneering and lobbying.
It is hardly anti-union to call for an end to forced union dues and union monopoly bargaining - quite the contrary. Abolishing the special legal privileges organized labor acquired over the decades after Gompers died would make it possible for unions to wield a positive and major impact on American society - just as Gompers envisioned.
If unions could no longer force workers to pay union dues or fees or accept monopoly-bargaining “services” they never requested and don’t want, union officials would have to come up with other means to attract members. Currently, unions spend just a minuscule share of their revenue providing training for members to help them avoid being laid off as technology changes. Genuinely voluntary unions likely would pour a far higher share of their revenue into training programs.
When union members nevertheless found themselves out of work, voluntary unions could furnish them with social insurance until they got back on their feet. If union members needed assistance with providing care for their children or elderly parents in order to hold a job, voluntary unions could help. Voluntary unions undoubtedly could provide such services less expensively, more effectively and more respectfully than government agencies do.
As Gompers noted regarding legally mandatory unemployment insurance, “[W]hen the government undertakes the payment of money to those who are unemployed, it places in the power of the government the lives and the work and the freedom of the workers.”
It is the opposite of anti-union to advocate policy changes that will encourage union officials to stop pursuing ends, such as the “compression of wages,” that undermine employees’ interests, and focus instead on furnishing services that benefit a wide range of employees and harm none. The fact is, right-to-work legislation is an important part of the package of reforms needed to get organized labor in America back on the right track.
A second necessary reform is repeal of all federal and state labor-law provisions authorizing unions to bargain on behalf of nonunion members as well as members in contract talks with employers concerning pay, benefits and other working conditions, including grievance procedures. Union officials do not need forced-dues and monopoly-bargaining privileges to serve their members. Indeed, they are a hindrance to unions carrying out their legitimate functions in civil society.
Stan Greer is senior research associate for the National Institute for Labor Relations Research.