Michigan became the 24th state to pass a right to work law this week. Right to work laws give employees at unionized workplaces the right to be employed at those establishments without having to join the union or pay union dues. Proponents say these laws protect employee rights at the workplace. Unions say that employees have a choice between unionized and open shop opportunities and that right to work laws allow nonmembers to be freeloaders.
Economic research indicates that right-to-work laws have an impact on employer location decisions. As for wages, my NC State colleague Walt Wessels was quoted in WSJ as saying "you can't find any effect of right-to-work laws on wages."
My take: the main effect of right to work laws is that it reduces union dues revenue. This reduces the payoff to unions from making attempts to organize workplaces in right-to-work states. It also cuts back on union's ability to influence the political process. It will be interesting to see if other states in the Great Lakes region such as Minnesota, Ohio and Wisconsin adopt right-to-work laws in the months ahead. And it will be really interesting to see if the law ends up creating desperately needed employment opportunities in Michigan.
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