“Fairy tales are more than true; not because they tell us that dragons exist, but because they tell us that dragons can be beaten.” — G.K. Chesterton
The most recent national paroxysm seems to be the controversy over Michigan’s enacting a Right to Work law this week. The passage sparked demonstrations and counter demonstrations, and precipitated some fisticuffs between supporters and opponents. What on earth is all the fuss about?
First of all, in this context “right to work” does not mean that everyone is guaranteed a job. That is an unfulfilled utopian measure included in the constitutions of numerous totalitarian and chronically impoverished countries.
The term was popularized, if not coined, by journalist Ray Stannard Baker in a January 1903 article in McClure’s Magazine. Baker, a Progressive and later adviser to Woodrow Wilson, was known as a muckraker. He was nevertheless equally critical of abuses in all quarters. In the “Right to Work” article, he wrote about union intimidation of employees who were opposed to striking, specifically in a coal miners’ strike.
During the economic depression of the 1930s, Congress passed the National Labor Relations Act (the “NRLA” or the “Wagner Act”) that, defined “unfair labor practices” and among other things required employers to bargain collectively with unions for terms and conditions of employment, mainly wages and benefits, but also work rules. Without going in to details – which can fill several libraries and archives – the Wagner Act gave organized labor significant power. There is controversy over how much this inured to the benefit of employees, but it is clear that those who rose to the level of officialdom in many unions became wealthy and powerful, mainly because of contracts that required that employees belong to the union as a condition of employment.
The recognition that one of the Wagner Act’s unintended consequences resulted in legal protection for overreaching by union bosses and a threat to the nation’s postwar economy prompted the enactment of the Taft-Hartley Act in 1947 over President Truman’s veto. Taft-Hartley made the “unfair labor practices” prohibition cut both ways; it proscribed certain practices such as jurisdictional strikes, secondary boycotts, mass picketing, and closed shops. The last practice was the requirement that one had to join a union in order to be employed by a business that was party to a union contract. These closed shop arrangements essentially allowed a union to control the source of labor through the “union hall” practice, which kept anyone from even applying for a job unless they were a union member. The law allowed “union shop” contracts which require employees to join after a waiting period, or “agency shops” where employees do not have to join a union, but must pay a fee equivalent to the portion of union dues that defray the collective bargaining costs.
A number of states, Texas being one, in the late 1930s and early to mid-1940s enacted laws prohibiting the union shop, and styled them “right to work” measures. The “right” of the laws is that a contract between an employer and a union cannot force all employees to be members of the union as union and agency shop contracts do. In other words, one does not have to be a union member to obtain or keep their job.
The Constitutional authority for the Wagner Act was the interstate commerce clause, and since a law valid under that provision might pre-empt state law, it was unclear whether the state right to work statutes would be invalid. (Application of the preemption doctrine is not always cut and dried, and generally requires a case by case analysis of federal and state statutes which might be in conflict.)
Taft-Hartley’s allowing union and agency shops might have been construed as preempting state laws, but for section 14(b), which made it clear that the NRLA did not prohibit states from enacting their own statutes forbidding union or agency shops within their jurisdiction.
In the decade or so after Taft-Hartley, around 20 states enacted statutes proscribing the union shop, the agency shop, or both. The movement stalled in the latter third of the 20th Century as private sector unions began to decline, recently revived over the past decades, with Indiana, and now Michigan becoming the latest states to enact one. Not without controversy, as is apparent.
Are these laws good or bad? There are those that see a right-left division of opinion, and there is some validity to that, but not always.
Let’s analyze. Freedom of contract is an essential element of a free-market economy, and, indeed, one of the first freedoms. Thus, it might seem that a law abrogating the freedom of an employer to enter into a contract with a union to only hire its members (the closed shop), a contract to require the employees as a condition of employment to join the union after being hired, (the union shop), or a contact requiring non-union members to pay to the union a fee to defray the expense of bargaining for which all employees ostensibly benefit (the agency shop), violates this principle. Economist and free-market advocate Friedrich Hayek noted this situation. Hayek, however, while believing that this was theoretically desirable, recognized that the NRLA already tilted the playing field by requiring that employers bargain collectively solely with a union that was certified as the representative of the workers. Such certification could be decided by 50% plus one of the employees. This meant that, in the absence of a law banning one of the previously mention “shops” 49% of the workforce could be forced to belong to, or at least pay money to, unions they wanted no part of in order to keep their jobs.
Well, one might say, the non-union, non-paying employees become free-riders. That is, they have benefits obtained by the union for which they did not have to participate in the costs. That goes back to the prior existence of the law forcing the employer to bargain with one, and only one, union (for certain classifications or skill sets of employees, that is). If one union has a monopoly, dissenting employees have nowhere else to go.
Abstract considerations aside, mandatory unionized workforces, where only members of one union can be employed in a work or trade category is a bad idea. For one thing, a union contract requires that all employees, generally non-supervisory, be treated alike for wages and benefits. The one exception to this is seniority, and that is the Holy Grail. Seniority is everything. Well, what’s wrong with treating employees equally? Anyone who has made it through the first grade in school knows that functional equality in human beings is nonsense. The shibboleth that all employees contribute equally is flat wrong, and, really, ludicrous. Some work harder, smarter, and more efficiently than others. Union contracts generally do not provide for performance evaluation and pay. Union employees are not rewarded on the basis of their demonstrated competence, ability, and contribution to the business, but on longevity with the employer. What is wrong with this? All that seniority demonstrates is that an employee has been around for awhile. And that by itself means nothing. There are those who have 10 years’ experience; and there are those who have one month’s experience repeated 120 times. Seniority most begets laziness, as well as a sense – or reality – of entitlement, which generally is undeserved.
Unions do have their place, and the right of employees to associate in an effort to improve their bargaining power should be protected. The right of individual employees to get ahead, and improve their position by demonstrating competence and productivity should also be protected. These are often in tension, but the fairest and most efficient arbiter is the marketplace. Competent and loyal employees will be rewarded, while those who treat their employer as an adversary will be treated as such.
For more on the right to work phenomenon, see this link