The determinants and effects of right-to-work laws: A review of the recent literature

I review the recent literature on the determinants and effects of right-to-work (RTW) laws. The focus is primarily on the econometric studies published since the early 1980s. Five major areas of impact are assessed: unionization, free riding, union organizing activities and successes in NLRB elections, wage structure, and state industrial development. While individual findings are quite sensitive to model specification, the accumulated evidence indicates that RTW laws have at least a significant short-run impact on all of these areas except perhaps wages.     

The impact of right-to-work laws on employer unfair labor practice charges

The expected impact of right-to-work (RTW) laws on employer unfair labor practices is discussed within a resource allocation framework. How RTW laws affect the relative prices of different organizing tactics is also considered. Empirical analysis based on cross-sectional data for 1970, 1975, and 1980 shows that the impact of RTW laws on employer unfair labor practice charges is insignificant. Other variables that affect charge activity are also discussed in terms of their effect on employer/union organizing resource allocation decisions.     

Who joins unions in the public sector? The effects of individual characteristics and the law

Analysis of a large micro-data set shows that state public-sector bargaining laws significantly influence state and local government union membership in several ways. Membership probability is lowest where a right-to-work law is present; it is greatest when there are mandatory agency shop provisions. Compulsory arbitration leads to a significantly greater probability of membership than does the right-to-strike. Simulations based on model estimates indicate that policy changes along the lines of proposed national public bargaining laws could lead to major changes in public-sector union density. Among individual and demographic characteristics, membership probability is significantly affected by full-time/part-time status and the statewide extent of private-sector unionism. Although non-whites and males are more likely to be union members, race and gender membership differentials are shown to be relatively small. The author thanks Jack Fiorito, Paul Jarley, Joe Stone, and Rob Valletta for their helpful comments. Any remaining errors are his sole responsibility.     

Right-to-work and union compensation structure

There are many reasons to expect that right-to-work legislation should affect unionism, independently of whether or not such legislation reflects the sentiments of the electorate. The strongest reason is that employees protected by right-to-work legislation can quit a union without quitting their job. This should make collective job actions more difficult and prompt local union leaders to strive more for consensus among members. If so, unions in right-to-work states should negotiate less pay for seniority than do unions in non-right-to-work states. PSID wage data generally confirm this prediction. The authors thank James Bennett, Art Blakemore, Dan Heldman, Barry Hirsch, Stuart Low, and an anonymous referee for comments on an earlier draft.     

The effects of right-to-work legislation on union outcomes: Additional evidence

The authors reexamine the role of open shop legislation in affecting union outcomes. New indices of union success are employed which include election voting behavior, the size of newly certified units, and the rate of union decertification. Three competing hypotheses are empirically tested: (1) the free rider argument predicting lower membership levels in right-to-work (RTW) areas; (2) the saturationist hypothesis predicting a higher level of organizing activity in RTW areas as a result of large concentrations of unorganized workers; and, (3) the hypothesis that legislation is vitiated by distinct organizing behaviors in RTW and nonRTW areas. Empirical results, based on SMSA data from 35 states, tend to provide support for hypotheses (2) and (3). Recently, RTW areas have experienced more prounion outcomes, and the union returns to regional attributes (measured by Chow tests) are found to be distinct in the two areas.     

The impact of unionization,right-to-work laws,and female labor force participation on earnings inequality across states

This study examines the effect of unionization, right-to-work laws, and participation of women in the labor force on income inequality. Two distinct models are developed using 1970 and 1980 census data on the 50 states in the U.S. First, an income inequality model is specified as a beta distribution of the second kind to estimate Gini measures of income inequality. Second, these Gini estimates are used in a simultaneous equations model. The 1970 results indicate that higher unionization rates decreased inequality while right-to-work laws increased inequality. In 1980, the measure of inequality was lower in states with higher female labor force participation. We thank an unknown referee and the editor for comments and criticisms that greatly improved the paper. The usual caveat applies.     

Paying dues to the union: A study of blue-collar workers in a right-to-work environment

Of the 39 states that permit some form of public sector collective bargaining, union security agreements are prohibited in 19. Employees may join and pay dues to the union representing them in these states but they are not required to do so. This study of 372 state government workers compares union dues-payers and non-dues-payers on a variety of personal, positional, economic, and noneconomic variables. Workers who were exposed to more physical danger and less noise were more likely to be dues-payers; higher seniority workers and skilled craftworkers were more likely to pay dues. Results suggest that union voting and union dues-paying have different antecedents. They also raise questions about the generalizability of previous dues-paying research to blue-collar settings. Holding a union card in a right-to-work environment seems to have little to do with the traditional collective pursuit of economic power.     

The closed and union shop in Western Europe

Conclusion But in the final analysis the cases cited above in Switzerland, Belgium, or the Netherlands are only modest exceptions or glosses on the general absence of formal union or closed-shop arrangements continental or Western Europe, and this contrasts, of course, with the United States. Whether or not this particular divergence may be reduced in the future remains to be seen. Certainly, in the U.S. with the union movement increasingly aware of its relative (to the labor force) decline in numbers, if anything one could anticipate even greater determination to insist on strong union-security arrangements in the future. (Whether this might be offest by some growth in state right-to-work laws, is problematical). Forecasting the future of the closed or union shop, or other forms of union security in Western Europe is hazardous, although this paper does suggest some grounds for development of a trend in the direction of such developments in several countries. How then in retrospect does the West European experience relate to the broader theme of the conference, the free rider issue? Trade unionism in European history has been at least as much a social and political collective phenomenon, as it has been an economic phenomenon. Economists must be able to understand workers’ relationships to unions in terms of these collective realities, if their explanations of why workers do or do not join unions, or why unions may or may not feel compelled to seek the closed or union shop are to achieve a similar reality. This paper is submitted by the author in his private capacity. It is not intended to represent the position of the Library of Congress, where he is currently serving as a senior specialist, nor the University of Wisconsin. The paper has benefited from the comments of Morris Weisz, University of Wisconsin and Bruce Millen of the U.S. Department of Labor.     

Unions and Employment Growth: Evidence from State Economic Recoveries

We test the hypothesis that in an economic recovery, unionization negatively affects job creation. We examine state-level job growth following two recent recessions, those with troughs in November 1982 and March 1991. In the five years following the troughs, we assess whether variations across states in union membership and right-to-work laws affect the rate of job growth. We find evidence that links union influence to slower job growth during an economic recovery, a finding consistent with previous studies reporting that unions negatively affect average employment and employment growth.

Wages,trade union activity,and the political environment of unionism: A simultaneous equation model

This paper develops a simultaneous equation model examining interrelationships among measures of union activity, the political environment of unionism, and relative real earnings across the continental United States in 1970. Its findings generally confirm the model’s theoretical rationale, particularly the hypothesized influence of the political environment on union activity, a conclusion which reverses other research findings. Similar results were obtained for the influence of union activity on relative real earnings. The model was also estimated over the subsamples of right-to-work and non-right-to-work states, and the structural variations so estimated were generally significant. The author appreciates the helpful comments of John W. Ballantine, Jack Blicksilver, and an anonymous referee, and he is indebted to Ralph Elliott for providing some of the data used in this study. The usual disclaimer applies.     

Right-to-work laws and union density: New evidence from micro data

Although union density is much lower in Right-to-Work (RTW) states than in states permitting union shops, most studies have found that after correcting for omitted-variable and simultaneity biases, RTW laws do not have independent impact on union density. However, these studies typically use data sets which include certain government, agricultural, supervisory and transportation workers who are not subject to RTW legislation thus diluting the effect of RTW laws. When these employees are excluded from the data set, we find that RTW laws do significantly affect union density in the private sector.     

When in Rome: conformity and the provision of public goods

We ask whether conformity, copying the most observed behavior in a population, affects free riding. Our model suggests that, if sufficiently frequent at the start of a public goods game, conformity will increase the growth rate of free riding. We confirm this prediction in an experiment by showing that free riding grows faster when players have the information necessary to conform. As a stricter test, we econometrically estimate the dynamic on which the model is based and find that, controlling for the payoff incentive to free ride, players react significantly to the number of free riders in their groups.     

On increased risk and the voluntary provision of public goods

This paper examines the impacts of increased risk on the voluntary provision of public goods. I strengthen the view that uncertainty ameliorates free riding even given negative non-Nash conjectures. This result holds since the change in the perceived free riding (i.e., the magnitude of the conjecture) drives voluntary contribution to public good supply. The result has two main implications. First, the traditional model of the rational self-interested individual can explain voluntary contributions. Second, a public policy to encourage volunteerism would maintain private information of private contributions to the supply of public goods. However, risk as a public policy instrument is limited by ethical concerns and behavioral responses to risk.U.S. Environmental Protection Agency provided support for this research. Garey Durden, Todd Sandler, Fred Sterbenz, Robert Sugden, and Joe Kerkvliet provided useful comments. I owe tanks to Peter Bohm, Hans Wijkander, and Charles Mason for encouraging my work in this area. Two referees provided detailed suggestions that greatly improved the paper.     

Membership and wage impact of right-to-work laws

This paper examines the effects of “Right-to-Work” laws on union membership and on the earnings of union and nonunion members. Using regression analysis, we find that once the simultaneous equations bias between the degree of unionization and RTW laws is eliminated, RTW laws have no statistically significant influence on union membership. Similarly, using a human-capital earnings model, we find that RTW laws have no significant influence on the wages of all workers, union workers, or nonunion workers. However, we did find evidence that such laws may promote aggressive union wage policies resulting in a larger union/nonunion relative wages advantage in RTW states than in non-RTW states.     

The choice between union membership and free-rider status

Free riders are employees who are covered by collective bargaining agreements but are not union members. This article examines the choice between free-rider status and union membership. A discriminant analysis of data from the 1988Current Population Survey identifies employee characteristics that distinguish free riders from union members. Factors influencing the decision to be a free rider, including the knowledge of available options, the preferential treatment of union members, the value of reputation, and union consciousness are discussed. A probit analysis determines the extent to which earnings and proxy measures for the value of reputation and union consciousness affect free-rider status. Suggestions are made for extending the study of the free riders and for the design of internal organizing campaigns. The authors thank an anonymous referee for helpful comments.     

Political support for minimum wage legislation

Conclusion Even if minimum wage laws reduce employment opportunities for some workers, other individuals may benefit from their enactment. In particular, union members and residents of states with high wage levels would be expected to encourage their senators to vote in favor of minimum wage legislation. Examination of senators’ votes on the 1966 and 1974 minimum wage bills indicates that senators favoring passage of these bills are likely to come from states with high union membership and, to a lesser extent, high wage levels. The equations explaining senators’ votes on these bills were disaggregated by political party affiliation and length of membership in the Senate. Democrats were more likely than Republicans to support minimum wage bills. Virtually no difference was observed between senators who voted on both the 1966 and 1974 measures and those who voted on only one. Perhaps the most encouraging result reported is the similarity of coefficients generally observed for corresponding 1966 and 1974 equations. This similarity suggests that the equations reported herein could be used to predict votes on future minimum wage bills. The results suggest also that the general mode of analysis can be fruitfully applied to other economic legislation.     

An integrated model of the economic effects of right-to-work laws

This study derives an empirical model which simultaneously traces the effect of Right-to-Work laws on the worker’s decision to join the union, the union’s decision to set the wage rate, and the firm’s decision to employ inputs. The model identifies two channels through which Right-to-Work laws affect these decisions: the wage effect and the productivity effect. Our results show that RTW laws tend to affect economic decisions through the wage effect, because the effect of RTW laws on productivity is small in most states. We thank an anonymous referee for helpful comments. Any errors that remain are the responsibility of the authors.     

Unequal and Unfair: Free Riding in One‐Shot Interactions

This study investigates the effect of status on perceptions of and reactions to free riders. Extrapolating from expectation states theory, I posit that higher status actors are granted a greater degree of social leniency than lower status actors when it comes to free riding. Specifically, I hypothesize that higher status actors are less likely to evoke the same negative emotional and behavioral responses elicited by lower status free riders. Using gender as an indicator of status, I employ a simple vignette to examine this relationship. Results validate previous findings related to the negative emotional and affective responses individuals have toward free riders. Furthermore, while findings fail to support the stated hypotheses, additional results demonstrate the subtle complexity of the relationship between gender, status, and free riding as well as its effect on the emotional and behavioral responses of individuals within small groups. As a result, I suggest that an outright rejection of the stated hypotheses may be premature and that further research in this area is warranted.     

Public sector union democracy: A comparative analysis

A congressional subcommittee held “union democracy” hearings in 1998 and 1999 to debate the impact and effectiveness of the union-democracy protections provided by the Land rum-Griffin Act which provides union members in the private sector and U.S. Postal Service certain democratic rights and protections. What was not resolved at that hearing was whether state sector or public employee union members should also enjoy the same democracy protections. We survey the existing 28 state sector collective bargaining laws and find that the majority of state legislation falls considerably short of the protections provided by the Labor Management Reporting and Disclosure Act. Moreover the consequences of limited state-enacted union-democracy protections are discussed and assessed to determine whether LMRDA jurisdiction should also cover public sector union members.     

Technology,international competitiveness,and union behavior

Union opposition to a free trade agreement with Mexico affirms the conventional wisdom that international trade damages the union movement. This study uses data from the March and May CPS for 1984 to 1987 to investigate this issue for production workers. The results indicate that union wages are not influenced by greater trade at medium union densities. However, at low union densities, greater imports (exports) reduce (increase) wages with the opposite pattern occurring at high union densities. The union wage pattern is consistent with product market considerations playing a strong role at low union densities and end game considerations playing a strong role at high union densities. In general, nonunion wages are not significantly impacted by greater trade. After controlling for imports and exports, nonunion wages are much greater in internationally competitive industries while union wages are not significantly greater in competitive industries. Nonunion wages appear to be more influenced by efficiency wage considerations. Thus, a Mexican free trade agreement will have little influence on union wages and should increase nonunion wages. I thank Wally Hendricks, Larry Kahn, Dan Rickman, and Doug Dalenberg for their very useful comments. All remaining errors are my own.