Right to Work: The Worker Tax


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An explanation about the true nature of so-called "Right-to-Work" legislation and its destructive effect on wages and benefits.

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Right to Work: The Worker Tax

  1. 1. “ Right-to-Work” The Workers Tax It’s Bad for America It’s Bad for Working Families
  2. 2. What is “Right-to-Work?” <ul><li>The 1947 Taft-Hartley of the National Labor Relations Act created a loophole (section 14b) in which states can make union-security clauses illegal in collective bargaining agreements </li></ul><ul><li>Under a RTW law, employees cannot be required to pay union dues as a condition of employment </li></ul><ul><li>Last state to pass RTW was Oklahoma in 2001 </li></ul><ul><li>Most states passed RTW during 1947-1959 period </li></ul>
  3. 3. Paying Fair Share in Non-RTW States <ul><li>Union security clause in non-RTW states </li></ul><ul><li>Fair share </li></ul><ul><ul><li>Workers in Union positions, positions which receive all of the wages and benefits of union representation, must pay the costs of that representation </li></ul></ul><ul><li>RTW states create a “Right-to-Freeload” </li></ul><ul><ul><li>Workers get all the same wages and benefits </li></ul></ul><ul><ul><li>Union must represent them at own expense </li></ul></ul>
  4. 4. Right-to-Work Laws are a Relic of the Past <ul><li>The RTW campaign began in 1947 </li></ul><ul><li>To date, more than 60 years later, less than half of our states (22) have adopted a RTW law </li></ul><ul><li>RTW laws are out-dated, redundant, and a relic of a partisan, anti-union agenda of another era </li></ul>
  5. 6. Economic Policy Myths
  6. 7. Economic Development Myths <ul><li>RTW is not among the most important factors related to business decisions on facility location </li></ul><ul><li>Incentive packages offered by states are the most important factor: </li></ul><ul><ul><li>tax rates; education of workforce; cheap energy; abundant labor supply; cheap land; transportation; climate </li></ul></ul><ul><li>Good growth vs bad growth is the real issue </li></ul><ul><li>RTW lowers per capita incomes and the standard of living </li></ul>
  7. 8. Oklahoma “Job Creation” Myth <ul><li>To attract new businesses in the 1990s, began giving 5% cash back on payrolls for creating new jobs </li></ul><ul><ul><li>No requirement on how money is spent </li></ul></ul><ul><li>Now gives 10% cash back on payrolls of jobs with annual salaries or $94,000 or more </li></ul><ul><ul><li>No requirement on how money is spent </li></ul></ul><ul><li>RTW has nothing to do with this situation </li></ul>
  8. 9. Company Location Myth <ul><li>In 2010, Area Development  magazine ranked the top 10 states for site selection based on survey of site selection industry consultants </li></ul><ul><ul><li>Indiana ranked number 6 out of 10 </li></ul></ul><ul><li>The survey revealed 8 main criteria used by consultants to determine site location selection </li></ul><ul><ul><li>None of the 8 criteria mention RTW </li></ul></ul>
  9. 10. Company Location Myth <ul><li>In 2010, Chief Executive  magazine polled 600 U.S. CEOs about site </li></ul><ul><li>selection criteria: </li></ul><ul><li>Criteria were grouped and rated as follows: </li></ul><ul><ul><li>Tax and regulation; workforce quality; living environment </li></ul></ul><ul><li>Under &quot;workforce quality&quot; the 5 most important items were: </li></ul><ul><ul><li>Employee work ethic; general education level of workforce; competitiveness of wage rates; employees cooperative relationship with management; availability of labor with specialized skills </li></ul></ul><ul><li>RTW was not a factor in site location selection </li></ul><ul><ul><li>Education of workforce is more important factor in site selection </li></ul></ul>
  10. 11. Actual Buying Power Myth <ul><li>Actual buying power is commonly measured as BPI </li></ul><ul><li>6 of the top 10 metro areas with the highest BPI in the U.S. are in non-RTW work states (2009 data) </li></ul><ul><li>29 of the top 50 metro areas with the highest BPI are in non-RTW states (2009 data) </li></ul><ul><li>Workers in RTW states do not enjoy greater buying power than workers in non-RTW states </li></ul>
  11. 12. Competition Myth <ul><li>Off-shoring of jobs from the U.S. mainland </li></ul><ul><ul><li>Overwhelming majority of U.S. jobs off-shored are non-union jobs </li></ul></ul><ul><ul><li>Not a choice between union wages and non-wages </li></ul></ul><ul><ul><li>Choice between living wages and third world wages </li></ul></ul><ul><ul><li>Never seem to compete on executive’s wages </li></ul></ul><ul><li>If entire U.S. workforce made the federal min. wage of $7.25 per hr - still cannot compete with workers in third world nations </li></ul><ul><ul><li>The 2010 average wage for a Mexican worker was approximately $2.00 per hr with no benefits </li></ul></ul>
  12. 13. “Falling Tide” Effect for All Workers <ul><li>Reverse of “Rising Tide&quot; effect on wages and benefits </li></ul><ul><li>Unions lose bargaining strength </li></ul><ul><ul><li>Resulting drop in wages and benefit levels lowers wages and benefits throughout the entire community </li></ul></ul><ul><li>This happens in the reverse manner that the &quot;rising tide&quot; effect raises wages and benefit levels throughout an entire community </li></ul><ul><li>Right-to-work directly impacts floor and ceiling wages in every community within the state </li></ul><ul><ul><li>Impacts every worker, not just union workers </li></ul></ul>
  13. 14. Economic Development Myths <ul><li>Workers Lose Wages Under Right to Work </li></ul>Source: U.S. Bureau of Labor Statistics
  14. 15. Economic Development Myths <ul><li>Workers Lose Wages in Right to Work States </li></ul>Source: U.S. Bureau of Labor Statistics
  15. 16. <ul><li>Families Lose Income in Right to Work States </li></ul><ul><li>Source: U.S. Census Bureau </li></ul>
  16. 17. <ul><li>What Workers Lose Under Right to Work </li></ul><ul><li>Estimates based on </li></ul>
  17. 18. <ul><li>Economic Activity is Lower in Right to Work States </li></ul>Source: U.S. Bureau of Economic Analysis
  18. 19. Race to the Bottom <ul><li>If we attempt to compete with third world wages, it will be a race to the bottom </li></ul><ul><ul><li>The first one to work for free will win! </li></ul></ul><ul><li>We are a consumer-based society </li></ul><ul><ul><li>For our economic engine to run, workers need disposable income to spend </li></ul></ul><ul><ul><li>Lowering wages in order to compete at a level we can never attain is economic suicide </li></ul></ul>
  19. 20. Forced Unionism Myths
  20. 21. “Forced Unionism” Argument <ul><li>Workers are ‘forced” to join a union to keep their job </li></ul><ul><li>Workers are “forced” to pay union dues for union political activities with which they do not agree </li></ul>
  21. 22. Facts About “Forced Unionism” <ul><li>A “Right-to-Work” state law is redundant, out-dated, and unnecessary </li></ul><ul><li>Federal law has protected the rights of workers from “forced unionism” for decades </li></ul><ul><li>Ultimately, workers are free to choose where to work </li></ul>
  22. 23. The “Forced Unionism” Myth <ul><li>Fact #1: Workers cannot be forced” to join a Union </li></ul><ul><li>1947 Taft-Hartley amendments to the National Labor Relations Act </li></ul><ul><ul><li>Right of workers to refrain from joining a union was expressly added to Section 7 </li></ul></ul><ul><li>Affirmed by the 1963 U.S. Supreme Court case NLRB v. General Motors Corp. </li></ul><ul><ul><li>Workers cannot be forced to belong to a union </li></ul></ul>*373 U.S. 734 (1963)
  23. 24. The “Forced Unionism” Myth <ul><li>Fact #2: Workers cannot be required to pay for Union political activities with which they do not agree </li></ul><ul><li>Decided by the 1988 U.S. Supreme Court case Communications Workers v. Beck </li></ul><ul><ul><li>Workers cannot be forced to pay union dues for political activities </li></ul></ul>*487 U.S. 735 (1988)
  24. 25. Worker Choice <ul><li>93% of the private sector is non-union </li></ul><ul><ul><li>Only 7% of the U.S. private sector workforce is unionized </li></ul></ul><ul><li>Workers who choose not to pay their fair share of union dues for the good wages, benefits, and representation services they receive may simply choose to work elsewhere </li></ul><ul><li>Non-union companies are continually hiring </li></ul><ul><ul><li>Wal-Mart </li></ul></ul><ul><ul><li>McDonald's </li></ul></ul><ul><li>Workers are not bound to work in a union job in which they feel uncomfortable </li></ul><ul><ul><li>Workers may terminate the employment relationship at any time </li></ul></ul><ul><ul><li>Workers are free to move to an existing RTW state </li></ul></ul>
  25. 26. “Forced Representation” <ul><li>Unions in RTW states are required, by force of law, to represent non-contributors and non-members </li></ul><ul><li>Only time in U.S. history that an organization has been &quot;forced&quot; to represent non-members and non-contributors and bear the costs of that representation </li></ul><ul><li>Federal or state government have never required a U.S. business to perform a similar task </li></ul>
  26. 27. The End