New Data Bolster Finding of Right-to-Work Report

For Immediate Release

MIDLAND-A new study by two Ohio University economists (published jointly by the National Legal and Policy Center and the John M. Olin Institute for Employment Practice and Policy) bolsters the argument for a Michigan right-to-work (RTW) law, demonstrating that compulsory unionism does economic damage that ultimately works to the disadvantage of unionized employees. Right-to-work laws are state statutes or constitutional provisions that ban the practice of requiring union membership or financial support as a condition of employment. Some 22 states have such laws; Oklahoma was the last to achieve RTW status, in 2001.

These new findings come on the heels of a study by the Mackinac Center for Public Policy showing that workers in RTW states have significant advantages in economic growth, job creation and disposable income. It also lends credence to the sentiments of 62 percent of Michigan citizens, who, in a recent poll conducted by Research 2000, stated that workers should be allowed to hold their jobs regardless of whether or not they belong to a union.

The authors of the new report, Ohio University economists Richard Vedder and Lowell Gallaway, calculate that unions have cost the U.S. economy $50 trillion over the past half century. By distorting the price of labor and imposing inefficient work rules, Vedder and Gallaway argue, union policies constitute a steady drain on resources. "The deadweight economic losses are not one-shot impacts on the economy," said the economists. "What our simulations reveal is the powerful effect of the compounding over more than half a century of what appears at first to be small annual effects," they added.

These economic losses mean that although unionized workers have 15 percent higher wages than non-unionized workers, overall wages are depressed by an economy that is 30-40 percent smaller than it would otherwise have been. "In other words, unionized workers get a slightly larger piece of a significantly smaller pie," explained Mackinac Center Labor Policy Research Associate Paul Kersey.

"Workers should be free to organize and seek union representation in the workplace" said Robert Hunter, Director of Labor Policy at the Mackinac Center. "But it is paramount that they maintain control over the union, so the union truly does represent their best interests. Union bargaining demands must be reasonable, and must not price workers out of the employment market. A state right-to-work law would make unions more accountable to the people they represent," Hunter said.