State legislators in Montana are considering enacting a “right-to-work” (RTW) law—a misleadingly named policy that is designed to make it more difficult for workers to come together in a union to negotiate for better wages, benefits, and working conditions. A new report by EPI senior economic analyst David Cooper and state economic analyst Julia Wolfe finds that RTW would have far-reaching harmful consequences for Montana workers—both those who are in unions and those who are not.
“Right-to-work laws do nothing to boost employment, raise wages, or help working people,” said Cooper. “We know that states that have passed these anti-union laws have lower wages and benefits. In a time when our country is recovering from an extreme downturn, we should be protecting and empowering workers, not threatening their paychecks.”
The median hourly wage of union workers in Montana is $22.85, compared with $16.95 for nonunion workers. The wage advantage for union workers persists even when adjusting for education and other characteristics related to union membership that affect earnings. Nationally, unionized workers are paid 11.2% higher wages, on average, than nonunionized workers in the same industry and occupation with similar education and experience.
The negative effects of RTW spillover into the nonunionized workforce as well. Both unionized and nonunionized workers in RTW states are paid 3.1% less, on average, than workers with similar characteristics in non-RTW states, according to previous EPI research. If this average pay penalty for being in an RTW state were applied to the typical full-time, full-year Montana worker, it would amount to a $1,143 loss in annual earnings.
RTW laws undermine unions’ ability to collect “fair share fees” from workers whose interests they represent. Fair share fees cover the costs of bargaining, contract administration, and grievance processes that unions are required by law to undertake on behalf of all (union and nonunion) members of a collective bargaining unit. Without fair share fees, union power degrades quickly. Ultimately, RTW legislation is associated with lower overall unionization rates. In Montana, 6.5% of private-sector workers are represented by a union, compared with only 4.0% of private-sector workers in neighboring RTW states. Nationally, 8.5% of private-sector workers in non-RTW states are represented by a union, nearly double the average private-sector unionization rate in RTW states (5.2%).
“Unions raise industry standards for union and nonunion workers alike,” said Wolfe. “A so-called ‘right to work’ law would have detrimental effects for Montana’s workforce and fuel our country’s growing economic inequality.”
RTW laws originated in the Jim Crow South, by business interests who viewed the prospect of solidarity between Black workers and working-class white workers as a threat to the racist social hierarchy in the South, and the political dominance of wealthy white plantation owners and industrialists. The racist implications of RTW laws ring true today: Nationwide, Black workers represented by unions are paid 13.7% more than their nonunionized Black peers, and Hispanic workers represented by unions are paid 20.1% more than their nonunionized Hispanic peers. (White workers represented by union are paid 8.7% more than their nonunionized white peers.)
To strengthen workers’ rights to organize, Congress should pass the Protecting the Right to Organize (PRO) Act, a comprehensive set of reforms that would close loopholes in our labor law—including requiring states to allow private employers and unions to enter into “fair share” agreements.