Right–To-Work Laws Contributing to Vanishing Middle Class, Wealth Inequality

Written by Ralph E. Stone. Posted in Business, Economy, Labor, Law, Opinion, Politics

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Published on February 15, 2015 with 18 Comments

Twenty-four states have enacted right-to-work laws.

Twenty-four states have enacted right-to-work laws.

By Ralph E. Stone

February 15, 2015

Much has been made about the shrinking middle class in the United States where the wealthiest 160,000 families own as much as the poorest 145 million families.  Income inequality is the gap in how much individuals earn from the work they do and the investments they make. Wealth inequality measures the difference in how much money and other assets individuals have accumulated. One of the contributing causes of wealth inequality is the labor movement’s diminished economic and political clout, as seen in the movement by states to enact right-to-work laws.

Thanks to collective bargaining, union members have higher wages and better benefits.  In addition, union membership actually raises living and working standards for all working men and women, union and non-union. When union membership rates are high, so is the share of income that goes to the middle class. When those rates fall, income inequality grows and the middle class shrinks.

Corporations did not all of a sudden give workers two days off each week, which we now call weekends, or paid vacations and sick leave, or rights at the workplace, or pensions, or overtime pay.  Virtually all the benefits we have at work, whether in the public or private sector, are because unions fought hard and long against big business who did everything they could to prevent giving us these rights.

Labor membership is shrinking.  According to the Bureau of Labor Standards, in 2014 the percentage of wage and salary workers who were members of a union was 11.1 percent, down from 20.1 percent in 1983. Consider that union membership peaked in 1954 at 28.3 percent.

And union popularity is down.  Last year, a Gallup poll found only a small majority, 53 percent, approve of labor unions, down from 75 percent in the 1950s.  Yet 71 percent of those polled support right-to-work laws.

Right-to-work, or as some have called such laws, a right to work for less laws, are being enacted by more and more states.  The 1947 Taft-Hartley amendments to the National Labor Relations Act, permitted a state to pass laws that prohibit unions from requiring a worker to pay dues, even when the worker is covered by a union-negotiated collective bargaining agreement.  Thus, workers in right-to-work states have less incentive to join and pay dues to a union. As a result, unions have less clout vis-à-vis corporations.   Twenty-four states have right-to-work laws.

One study found “worker friendly [non-right-to-work] states are significantly healthier, are more productive, have less poverty, and with citizens who enjoy longer life spans. In four of the seven measures (GDP per capita, poverty, insurance and life expectancy rates) so-called ‘right-to-work’ states come out significantly (and statistically) worse.”

The study concludes saying “instead of pursuing laws that actually lower the standard of living in their states, policy makers should look for ways to elevate everyone’s standard of living. Enacting RTW laws is not only misguided, but in fact counterproductive to achieving such ends.”

Why do we need unions anyway?  Because they are essential for America. Unions are the only large-scale movement left in America that serve as a countervailing balance against corporate power, acting in the economic interest of the middle class.  But the decline of unions over the past few decades has left corporations and the rich with essentially no powerful opposition.  You may take issue with a particular union’s position on an issue, but remember they are the only real organized check on the power of the business community in this country.

Right-to-work laws are anti-union and contribute to a shrinking middle class and wealth inequality.

Ralph E. Stone

Ralph E. Stone

I was born in Massachusetts; graduated from Middlebury College and Suffolk Law School; served as an officer in the Vietnam war; retired from the Federal Trade Commission (consumer and antitrust law); travel extensively with my wife Judi; and since retirement involved in domestic violence prevention and consumer issues.

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  • RoyTT

    Income inequality is not an issue if it exists solely because the rich are richer. When Mark Zuckerberg moved into my zip code, it became more unequal but I did not become any poorer.

    If complaints about income inequality can be dismissed as little more than envy, then your message will not be effective. Explain to me how someone else being richer makes me poorer. After all, that extra wealth was created, not stolen.

    Unions are largely irrelevant these days because workers now share in the profitability of their employer through stock options and ownership. We have achieved Marx’s dream, without a revolution, and without unions. Workers want the reward from their own efforts, and not to be dumbed down by their less effective work colleague.

    • Timo

      off course you become poorer. Money is not an absolute value, it is a relative value. 100 dollars today and 100 dollars sixth months ago is not the same value just because the number is the same.

      • RoyTT

        I don’t understand (nor m2milliner’s comment). If the amount of money in the world was constant then it would be true that if you have more, then others must have less.

        But if you have created new wealth through your enterprise, and that makes you wealthy, then technically it makes the world more unequal. But nobody has been harmed or made poorer as a result. In fact, the chances are that many others have been enriched – Twitter’s IPO created over a thousand millionaires overnight in this city.

        Zuckerberg has not made anyone poorer as far as I can see, but he has made the city more unequal. Detroit has much more economic equality than SF but where would you rather live?

        The real problem is that some people might feel poorer in relative terms, because they compare themselves to you. But isn’t that an envy thing rather than an equity thing?

        • Donnie Hancock

          In other words, if we were all millionaires then millionaires would be the new economic lower class….

    • Frank

      What a bunch of bullshit,” workers now share in the profibility of their employer through stock options and ownership” hey pal first of all we are talking skilled trades, short time work at projects. We are always working ourselves out of a job. Second what does this crappy country make any more ? I’m sure the employer offers a lot to someone that works in a disturbution center operating a fork lift that loads imported , cheap shit , that is dumped on are shores and is delivered all over the states. Wake up , this country doesn’t know how to make anything but hard times for the middle class …..

      • Arizona living

        Ever stop to wonder “why” this country doesn’t make tangible product like it once did? When the starting salary of an American auto worker is over 30k a year ($15.75 an hour), costing the company a little over 50k a year, it doesn’t take a mathematician to realize that companies either need to find cheaper labor, or go out of business.

        And an FYI, many, MANY white-collar jobs have a lower starting salary than that. And that “Cheap” stuff? Yeah, I stopped buying domestic cars when every one I or my family owned broke down before hitting 80k miles. Meanwhile, our Nissans, Toyotas, and the like, were hitting 150k on average before problems began.

        No, the real problem is people driving up minimum wage and labor unions who drive up labor cost, which gets past along to the consumer thereby causing the middle-class to lose buying power.

  • m2milliner

    America may not be as far from “let them eat cake” as you think. The Koch Brothers and other Burchers would prefer an aristocratic oligarchy to which passive low wage earners are oblivious. Labor unions are the true plurality in our system of governance. It is time to stop the bleeding and demand a fair share of the glutinous profits being realized by so very few off the backs of so very many.

    • Doran Bush

      This right here is the decline of the middle class. Allowing libral Democrats to bait you into believing they are your best friend as they reach around and grab your wallet. Wake up

  • Donnie Hancock

    Wait a second, the five states where the “middle-class” is declining the fastest are all blue states that aren’t right to work. California be at the top of the list of declining states with like a 7% decline from 2009- 2014…

  • NathanS

    I did a search and found an interesting tidbit. For the year 2012, the following people made the following amounts:
    Gerald McEntee $1,020,751
    Randi Weingarten $396,304
    James Callahan $352,101
    Edwin Hill $326,253
    Joseph Hansen $297,941
    Richard Trumka $277,486
    These numbers put these folks in the “top 2%.” I’m sure some of these name sound familiar because they are the leaders of some of the major labor unions. Another interesting tidbit was the fact that the average union laborer in 2012 made $49,400.
    Maybe the labor movement is declining because more people are waking up to the fact that the labor unions have become more than just a voice for the common man. They have become an aristocratic oligarchy where glutinous profits are being realized by so very few off the backs of so very many.

  • Shane Barrett

    Go fuck yourself Roy TT. I work in the #1 most dangerous profession in America. (The telecommunications industry.) We are the easiest example of what happens when workers aren’t able to unionize (hence the high rate of fatalities in our industry.) Corporate monsters such as at&t and Sprint have no accountability in the interests of telecom workers because we are kept from unionizing. Secondly if corporations are able to pay lower wages and the middle class disappears how can people spend the money that is the very life force of the American economy? Do you not understand the simple fundamentals of economics smart guy? It’s people like you that are destroying the American Dream you pompous fuck.

    • RoyTT

      Shane, there is no reason to be rude. People can disagree on ideas and issues without hate.

      I have no idea why you claim that working for a phone company is somehow more dangerous than being a fireman, cop or soldier. But I do know that, relatively speaking, you are not likely to be outsourced overseas because you are delivering a local service.

      And that is important because if you were in, say, manufacturing, then your job would very likely have moved to China or some such, if your pay was too generous.

      Put another way, you are not entitled to a given standard of living just because you aspire to it or have a pretty face or a US passport.. You get that level of largesse if and only if you deliver something that is of superior value to those who pay your wages, relative to others who are competing with you.

      But ultimately if you dislike your employer and profession that much, why the heck are you still doing it? Somewhere in all of this debate there has to be some personal responsibility for the decisions that you have made, and continue to make. Not everything that is wrong with your life is someone else’s fault.

  • JBean11

    I thought Wisconsin is a right to work state also?

  • Ralph E. Stone

    On March 9, 2015, Scott Walker Governor of Wisconsin signed a right-to-work law making Wisconsin the 25th right-to-work state.

  • Doran Bush

    Bull, NAFTA is killing the middle class. The assault on cheap energy is killing the middle class. Taxation without representation is killing the middle class. All these things supported by witch party. DEMOCRATS. Until you wake up and quit listening and following their bait and switch liberal crap the assault on the free thinking middle class will continue. Open your eyes