Right to Work

Mitch Daniels - Right to Work for Less

Mitch Daniels – Right to Work for Less (Photo credit: DonkeyHotey)

The euphemism is a rather useful rhetorical tool and one beloved by politicians. Roughly put, a person uses a euphemism by substituting a positive or innocuous term or phrase for one that has a more negative connotation.  Metaphorically, I often describe the process of using a euphemism as sprinkling sugar on something unpleasant to make it more palatable. Or, in the words of Mary Poppins, “Just a spoonful of sugar helps the medicine go down in a most delightful way.”

Euphemisms are, of course, widely used outside of politics. For example, in my youth people bought used cars. Now people purchase pre-owned vehicles. As another example, people used to be fired. Now they are down-sized.

Euphemisms are often used in the naming of laws to make them sound better. In many cases, something rather unpleasant is hidden behind the sugar coating of a pleasant sounding (but inaccurate) name. One example of this is the naming of anti-union laws as “right to work” laws. Currently, there are 23 “right to work” states in the United States. The other 27 states have not yet passed such laws, but at least five of them are considering such laws. These laws, not surprisingly, are part of the larger attack on unions, including educators’ unions.

While there are various arguments given in favor of the “right to work” laws, one standard argument in their favor is that the laws should be adopted by a state because doing so will have an economic benefit for that state. As such, a key point of dispute is over the premise that “right to work laws” yield economic benefits.

Interestingly, the premise is both true and false. By this, I do not mean that it is some sort of violation of the usual laws of truth. Rather, the claim is true for some and not true for others.

For employers, “right to work” laws can yield economic benefits, but precisely because these laws inflict economic costs on those doing the work. Darrel Minor, a professor of mathematics at Columbus State Community College, recently completed an analysis of the data regarding “right to work” states and the other states.

One focus of the analysis was the Gross Domestic Product (GDP) of each state. This is a measure of the goods and services produced in the state. Based on the 2009 data, the GDP of “right to work” states was $38,755. For the other states, the GDP was $43, 899. This is a 13.3% difference. Interestingly, this indicates that the “right to work” laws can hurt both the employed and the employers—after all the data indicates that states with “right to work” laws are actually less productive than other states, thus undercutting arguments based on the claim that these laws enhance productivity. However, it is also worth noting that salaries in “right to work” states are 9.4% lower than those in the other states. While this is bad for the workers, it can be advantageous for employers since they can pay less for the same work.

Another focus of the analysis was on poverty rates. Eleven of the fifteen states with the highest poverty rates are “right to work” states. In contrast, nine of the eleven states with the lowest poverty rates are not “right to work” states. In 2008, 14.4% of the population of “right to work” states lived in poverty. In the other states, the number is 12.4%. As Minor notes, if the poverty level of the “right to work” states was extended to all 50 states, this would mean 3,670,000 more people living in poverty. This data would certainly seem to indicate that “right to work” laws contribute to increased poverty.

Minor also found, interestingly enough, that the life expectancy in “right to work” states is lower than in other states, which is certainly a matter of some concern.

If this data is accurate, then there are rather good reasons to be opposed to “right to work” laws, even with their positive sounding designation.

It is, of course, worth noting that there are proponents of “right to work” laws and they point to different statistics, namely those showing higher employment and lower costs of living in states with “right to work laws” relative to other states. This raises the possibility that such laws can be beneficial in some areas while being rather detrimental in other areas, thus making the choice a matter of weighing these various factors. Naturally, the weight given to them will depend considerably on the values of those doing the assessment. So, for example, someone concerned with poverty and life expectancy would tend to regard such laws as more harmful than beneficial. Someone focused on the advantage of lower salaries in attracting businesses would tend to regard such laws as beneficial.

It is also worth pointing out that it is reasonable to be concerned that the alleged effects (positive and negative) of “right to work” laws are not actually caused by the laws but by other factors. It is also worth considering that the laws are actually an effect rather than a cause. For example, a state with higher levels of poverty might pass such laws in the hopes of reducing poverty. It is also worth considering that the laws and their alleged effects are both the result of a third factor. As another example, states with extensive and strong business interests would tend to have higher employment rates and these business interests would tend to support “right to work” laws because of their perceived usefulness in combating the threat of unions.

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  1. I found the statistics you presented here interesting, though not entirely surprising. As a political liberal I’m a big fan of the right to unionize, and I don’t think all kinds of employment are equal. (We need to be working for skilled jobs with decent wages, not for grant labor.) That said, I do think there’s a point of this argument that needs tightening up. You said:

    While there are various arguments given in favor of the “right to work” laws, one standard argument in their favor is that the laws should be adopted by a state because doing so will have an economic benefit for that state. As such, a key point of dispute is over the premise that “right to work laws” yield economic benefits.

    But I’m not sure that “will have an economic benefit for that state” is the same thing as “yield economic benefits.” It all comes down to what we mean by the state. I can think of two likely definitions: (1) the citizens of a certain state, taken as a whole; or (2) the institution of a state government.

    If you mean (1), then it’s not enough to say right-to-work legislation are bad for employers or for employees in industries; you need to look at the aggregate affect on everyone. Depending on how many skilled vs. unskilled laborers, and depending on how we look at overall benefit (do we simply add up everyone’s benefit and subtract out their loss, akin to Mill’s Greatest Happiness Principle, or do we try to benefit the most people, or what example), RTW Laws might have a benefit for some communities but not for others. Saying that the RTW law is good for some segment of the population is certainly part of that picture, but it’s not the whole deal.

    If you mean (2), the calculus looks quite different. We would need to look at how this policy impacts the state’s ability to do the work it’s supposed to be working at. You might look at this simply from a budgetary standpoint: does the state incur fewer costs (for healthcare, subsidized housing + food, public higher education, etc.) with most of its citizenry working at low-wage jobs, or is it better off with more higher-paying jobs and perhaps more unemployment to go along with that? Or you can look at what duties the state actually has ans ask: do RTL laws make it economically harder for the state to carry out these duties? There may be other metrics, too.

    The statistics you present are certainly relevant to this discussion, but it’s worth asking exactly how they feature into it. To answer that, I think we need to know more about just what kind of economic activity we need to be improving for the argument to work.

  2. I’m not sure I’d call “right to work” a euphemism, like “passed on” instead of
    “dead”. “Right to work” is misleading, a lie really, and actually entails exploitation by management. It’s more like “right to slave and get nowhere”. Strangely, many people seeing nothing inherently wrong in pitting an individual against an organization with rabid management whose record is now well know in the 1%/99% equation. They are not philanthropic and damn proud of it. Many still believe the “system” is benign, as though it followed some sort of law of nature that cannot be improved on. Many don’t even consider whether or not the “bottom line” is the right line, or the real possibility that it may end up as no line whatever.

  3. I think the points made might be valid in sophisticated economies but I doubt them in third world countries. Where massive unemployment exists, enforced minimum wages might lead to improved productivity of individuals but definitely also increases unemployment. The financial tradeoffs of using machinery to do work that could be done with labour intensity pushes firms in the direction of trying to reduce employment ….especially as populist union leaders encourage strikes that inevitably to further job cuts. International competition forces firms to strive for efficiency in order to survive so it is not a moral question. I think it relates more to geographical population spreads, birth rates and the genuine job creation potential of a particular country. Primitive societies with high birth rates and poor leadership are doomed to high unemployment if they try and adopt western employment practices.

  4. Marta,

    You are right to point out the ambiguity of “state” and it certainly matters what the term is referencing. Usually when folks make the argument, they seem to mean that the RTW laws will benefit everyone. The emphasis is usually on the citizens rather than the state government (after all, many proponents of RTW laws profess to be anti-government or at least for small government). However, it could be claimed that if the RTW laws benefit the citizens, then it would also benefit the state government.

    You also make an excellent point about sorting matters out. After all, the utility of the RTW laws would presumably be relative to certain people and certain aspects of the economy. So, as I try to indicate in the post (albeit poorly) a RTW law might benefit some in certain ways (such as companies being able to make more profits by paying lower wages) while being detrimental to others in some ways (such as the workers who get paid less and die earlier).

    It might also be possible to simply do a broad utilitarian calculation. That is, what is the general impact of RTW laws on everyone in the state in question?

  5. Wow, this is an incredibly rudimentary economic analysis, to the point of being worse than no analysis.

    All Darrell Minor has done is counted some economic metrics (poverty rate, GDP, salaries) in “right to work” states and non “right to work” states, and concluded since the metrics are lower in the “right to work states” that it has a negative effect on those metrics.

    I’ll skip over the correlation=!causation thing since you already covered that (Although I’m unsure why you’re linking this study in the first place given that no useful conclusions can be drawn from it as a result).

    This analysis of correlation doesn’t even factor in time! Which is a fundamental component to economic analysis. How is this not worth mentioning? Economies are not static they are dynamic!

    If a state is a “right to work” state for 40 years, and then one year it repeals “right to work” laws, does that state suddenly become a useful datapoint of a non-right to work state? Of course not.

    You need to AT LEAST measure the RATE of change in GDP, salary, etc before and after these measures came into place. It could well be that GDP growth was already stagnant for other reasons and the introduction of RTW didn’t really effect it.

    Static economic metrics are basically useless for most economic questions. Where an economy is, is far less important than where its going, and where its been.

    Now consider there are hundreds of significant factors in play, all having various effects and durations through time, and many factors are being constantly changed and changed back, and that often a change in a factor can take years to precipitate its effect.

    There is no one economic factor that makes up over 50% of influence on something as broad as GDP or salary, so to have a single factor (RTW legislation) analysis is useless. The effect RTW is having (assuming it has a statistically significant one), could well be completely overwhelmed by other factors.

    The heuristic Darrell Minor is using is worse than saying “I don’t understand economics”, because he believes paying attention to the correlation of a very small number of variables, which are static in time, can tell him useful things about the way economies work.

    It’s a brilliant heuristic for confirming a bias, Since it serves the necessary role of satisfying an intellectual need to have some level of evidence, but the standards of evidence are sufficiently low that A) it doesn’t take very much effort at all to come to the conclusion you want to come to and B) you can find such low standards of evidence to prove any case so you’ll never not be able to confirm a bias with this level of economic analysis

    Now I have no idea what effect “right to work” legislation has on GDP, salary, poverty, but I know the analysis you just linked to gets me no closer to answering that question, and for many people who have a bias to want to believe RTW is a bad thing, its massively counterproductive since they now believe they’ve seen a statistically significant analysis of the effect RTW

    So not only do they not know anything more than before they read the research (bar some basic facts about what various states GDP output is), they now “know” something (RTW is bad for GDP, salary etc), that they have no good reason to “know”.

    tl;dr – Thinking understanding complex things is simple is worse than not understanding them at all.

  6. Jimbo,

    Your main attack seems to be on Minor’s methodology, so I’ll leave the defense of that to him.

    As I note in the post, Minor’s data (if accurate) does indicate some potential negative impacts of RTW laws. I also note that other statistical data presents what seem to be positive impacts of RTW laws.

    I might be misreading your view, but you seem to be presenting a general skepticism about determining the impact of RTW laws on the economy. If this skepticism is warranted, then we would seem to have little rational basis to be for or against them.

    I suspect that much of the support and opposition regarding RTW laws is based on perception rather than reasoned consideration of the full impact. That is, people who are for it are often motivated by the idea that the RTW laws will counter the evils of unions and create freedom while the opponents perceive them as anti-union tools.

  7. Right to Work | Talking Philosophy « DonkeyHotey - pingback on October 14, 2012 at 10:53 am
  8. @”Jimbo” (October 6, 2012) – Although it’s not specifically mentioned in this blog, the article itself shows statistically significant (negative) correlations (at levels ranging from 0.005 to 0.05) between poverty, productivity, health insurance rates, and life expectancies with being a right to work state. Your point that if a state is a right to work state for 40 years and then repeals its right to work laws it wouldn’t see changes overnight is valid, but as the article points out, that hasn’t happened. The last state to change its RTW status was Oklahoma over a decade ago, and in the time since it became a RTW state numerous studies have shown that Oklahoma has seen a decline in some of these same economic measures. The article does point out the problems with looking only at average compensation as a measure, which is evidently why other measures were looked at. It closes with the statement that “the evidence suggests…”, which seems to me to be an opportunity for further study of these measures, rather than the final word. It seems to me that the article has identified four measures that should be studied further, using multivariate methods.

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