Employees in North America need universal right-to-work laws. No one should be forced to pay union “dues” if he or she does not wish to be part of a union. Hopefully, the recent United States Supreme Court’s decision might be the tipping point that encourages more states to introduce such laws. The Court’s five to four decision is a huge victory for government workers who choose not to join the union. These workers will not have to pay to cover the costs of collective bargaining. Indeed, this is a major victory for individual freedom. Will Canada follow and enact right-to-work legislation?
Right-to-Work Laws Needed Following Supreme Courts Decision
In addition to wasteful spending, governments’ laws dampen productivity and infringe workers’ rights. In turn, this creates conditions for unions to destroy wealth and job creation efforts. Take the Canadian situation. Closed-shop, union-shop, and Rand formula are government-approved, union-friendly arrangements that exist unchallenged. Other countries recognized that these laws encroached on individual rights and produced harmful effects on their economies. These countries annulled and replaced them with right-to-work legislation where individuals have the right-to-work for “…any willing employer without having to join or pay union dues to an exclusive bargaining agent or union.” 1
No such laws exist in Canada. Under current Canadian legislation, individual workers are not free to decide their association with a union. Besides, unions monopolize some workplaces, thus restricting workers’ freedom to choose where to apply for jobs. For instance, on some construction sites, workers must be members of a union to get a job on the site. Indeed, if you want to teach in the British Columbia (BC) public school system, or if you want to be a pilot at Air Canada, employees must join the BC teachers union, or the Air Canada Pilots union respectively, and pay union dues.
The United States Pioneered the Term Right-to-Work
The United States pioneered the term “right-to-work,” however, other countries use different language. Wherever implemented, these laws have had extraordinarily positive effects on both productivity and employment. New Zealand experienced major gains following its right-to-work laws in 1991. Work stoppages due to strikes declined from 99,032 in 1991 to 23,770 in 1993.2 During the three years following implementation of legislation, New Zealand’s GDP grew 15%, matching the ten-year growth rate between 1974 and 1984.
Right-to-Work Laws Result in Improved Productivity
The United Kingdom, where many Canadian labor laws emanated, saw major benefits after implementing its 1990 Employment Act that outlawed closed-shop unions and introduced other major labor reforms. National unemployment fell from 11.2% in 1983 to 6.9% in November 1996.3 Work stoppages declined too, from 2125 in 1979 to 205 in 1994.
To be sure, positive effects of right-to-work laws in these countries are evident. Besides, we see similar results in the United States which allow each state to decide right-to-work laws. As of February 2017, Missouri became the 28th state to pass such laws.4
In their study of productivity and right to work laws in the United States, Hick, LaFaive, and Devaraj found non-right-to-work states performed at around 60% of right-to-work states in manufacturing productivity. Similarly, they found right-to-work states had a higher level of sales per employee than non-right-to-work states.5
Results of right-to-work legislation in New Zealand, United Kingdom, and the United States show overwhelmingly positive human rights and economic benefits. But current government-sponsored union arrangements in Canada is restrictive with adverse effects on aggregate productivity and unemployment. This arrangement is another way governments destroy wealth and abdicate their role to provide proper conditions for businesses to thrive and create productive jobs.
References:
1 Mihlar, Fazil, ed, Unions and Right-to-Work Laws: The Global Evidence of Their Impact on Employment, Vancouver: The Fraser Institute, 1997, 8
2 Ibid, 9
3 Ibid, 10
4 National Right to Work Legal Defense Foundation, Right to Work States,
accessed June 29, 2017. http://www.nrtw.org/right-to-work-states/
5 Michael Hicks, Michael Lafaive and Srikant Devaraj, New Evidence on the Effect of Right-to-Work Laws on Productivity and Population Growth CATO Journal (January 2016): 117
© 2018 Michel A Bell
Apart from paragraph one, text excerpted from Michel A Bell’s latest book, Business Simplified, serving people, becoming better stewards, creating value, pages 82-84
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Corporate Welfare Destroys Jobs
