Vice President, Labor Policy, U.S. Chamber of Commerce
January 09, 2017
In what has become somewhat of a wave in recent years, the Commonwealth of Kentucky over the weekend became the 27th state to adopt a right-to-work law, just eleven months after neighboring West Virginia did the same thing. The measure will prevent workers from being forced to pay union fees as a condition of employment. The state House passed the law by a vote of 58-39 last week, the state Senate passed it on Saturday by a vote of 25-12, and Governor Matt Bevin signed the legislation shortly thereafter.
The passage of right-to-work in Kentucky had been a priority for Republican lawmakers, but they faced consistent opposition from their Democratic counterparts, who held a slim majority in the state House for nearly a century. However, following the November elections, Republicans hold the majority in both legislative bodies, and the governor has been clear that he intends to pursue policies more likely to improve the business climate, including right-to-work.
Predictably, organized labor slammed the prospect of right-to-work legislation, and union sympathizers protested the measure at the capitol building in Frankfort. On its blog, the Kentucky AFL-CIO accused the new Republican majority of engaging in a “swift assault on organized labor” and lamented the fact that the legislature and the governor were intent on passing right-to-work, saying that it would lower wages and hurt the middle class.
Despite that familiar rhetoric about right-to-work, the reality is that it has an overall positive economic impact. A 2015 report by NERA Economic Consulting evaluated numerous studies on right-to-work laws and examined the direct and indirect impact of those laws on economic growth, employment, investment, and innovation. That report presented data about economic performance in both right-to-work and non-right-to-work states and found that the evidence strongly suggests that right-to-work helps a state’s economy.
More specifically, the report made the following observations: private sector employment grew more in RTW [right-to-work] states between 2001-13; personal income in RTW states rose by nearly twice as much as in non-RTW states between 2001 and 2013; the annual unemployment rate in RTW states was 0.5 percent lower than in non-RTW states; output grew faster in RTW than in non-RTW states between 2001 and 2013, rising by more than 30 percent, compared to 20 percent in non-RTW states; and real manufacturing output rose by 35 percent in RTW states between 2001 and 2013, compared with 19 percent in non-RTW states.
In any event, one can be sure that labor unions will not give in easily despite such evidence, and they almost surely will wage a legal battle to try and block right-to-work, as they have done in every single state where it has passed, albeit unsuccessfully. If history is any guide, unions are unlikely to succeed in a similar court challenge in Kentucky, which would mean right-to-work is here to stay in the Bluegrass state, and that is good for business.