How Right-to-Work Works

There are currently 26 “right-to-work” states in the in the United States, which means just over half of the country has laws that directly address compulsory union membership. In most states like South Carolina – which has had its law on the books since 1954 – the statute has been in effect for decades. Now that a handful of states have added such laws in the past few years, the topic has risen back to the top of public discourse, often with some controversy.

The Meaning of Right to Work

Right-to-work commonly refers to an employee’s right to work without being required to join unions, thus preventing penalties for not doing so. It is essentially a restriction on such agreements (also known as “security clauses”) between employers and labor unions. In South Carolina, which has one of the lowest unionization rates in the country, specific tenets include:

• Union membership cannot be a condition of employment.
• Employers cannot bar workers from joining unions.
• Employers must have workers’ permission to deduct membership dues from paychecks.
• Public employees are barred from collective bargaining.

At Boeing South Carolina, the company advises employees that the law also means
that if employees form a new union at a previously non-union company, nobody can be required or otherwise compelled to join or pay dues. Unions would represent and negotiate on behalf of all employees, although only union members would vote on contracts and leadership.

On the other hand, proponents of unions argue that because unions represent all workers in the company – not just in negotiations, but also with legal defense for cases such as improper dismissal – all employees should pay some dues.

History of Right-to-Work

The right-to-work code was enacted in South Carolina in 1954. Several states had enacted such laws in 1947, and South Carolina was part of a second wave in the early 1950s. In the current decade, the past four years have seen a new wave of right-to-work laws enacted. These states include Indiana, Michigan, and Wisconsin. Most recently, West Virginia joined their ranks in 2016, bringing the total number to 26; right-to-work states are now in the majority.

The spate of 1947 laws came from the federal Labor-Management Relations Act, also known as the Taft-Hartley Act. That law made it illegal nationwide to make union membership compulsory. At the same time, it allowed each state to create its own laws to address the issue.

Interestingly, the term “right-to-work” originated from an entirely different matter, an 1889 West Virginia case where one side argued for people’s right to freely choose their occupations. It is said to have been co-opted in the 1940s by an anti-union newspaper editor.

Impact Today

Whatever the history, many of today’s largest employers are finding right-to-work states attractive. As we have previously noted in this blog, Area Development has even said it is a “top consideration” for many companies. Alongside workforce, logistics and low operating costs, right-to-work polices are often an important factor in the state’s competitiveness.

Because economic factors can vary so much from one state to another, researchers have found it difficult to give consistent answers on exactly how right-to-work status impacts states economies. The one definitive outcome, however, is significantly reduced union activity, which tends to allow employers to reap and retain a greater share of the benefits from gains they might make.  And while definitive data might be hard to come by, it is a bet many companies are willing to make.

Future Outlook

South Carolina’s low unionization rate of less than two percent has garnered attention beyond our borders. President-elect Donald Trump recently met with South Carolina’s former labor secretary Catherine Templeton, a woman who had been previously been recruited by Governor Nikki Haley to help maintain the state’s low union activity. Some observers have speculated that the nation will shift even more in favor of right-to-work, because the president-elect has expressed his support for the policy in the past.

As the South Carolina hones in on targeted areas for economic development, the backdrop of right-to-work policies will most likely continue to be an important selling point. From aerospace to manufacturing, employers have sought the benefits of right-to-work for years to come.