Last week, Delaware Business Times Founding Publisher Sam Waltz in his editorial opined on the need to enact a Delaware right-to-work law to serve as a catalyst for economic growth.
Quantifying the impacts of right-to-work laws on workers’ earnings and on state economic development is inherently perilous. These outcomes are affected by many hard-to-measure factors other than a state’s right-to-work law.
The nonpartisan Congressional Research Service concluded that: “It comes as little surprise that the literature related to the laws’ effects on outcomes, such as employment and wages, is inconclusive. Studies have yielded a variety of conclusions, largely dependent on how researchers conduct their analyses.”
Studies of economic development showing substantial benefits of right-to-work laws primarily reflect the impacts of factors other than right-to-work. This is seen by the huge disparities in economic development across right-to-work and non-right-to-work states.
Oklahoma is the only state with a relatively recent change in right-to-work status and enough elapsed time for a right-to-work law to potentially have an impact. A rigorous research study concluded that it did not have a positive effect.
From 2000 through 2015, total employment in Delaware increased by more than 12 percent – more than the average in right-to-work states. The increase occurred even with the loss of jobs in automobile production and other substantial economic challenges. The recent success in retaining two Dow-DuPont spin-offs shows that Delaware can remain an attractive economic location even without a right-to-work law. Based on the research evidence, it seems clear that right-to-work has a modest negative effect on the earnings of full-time workers and a highly variable and uncertain effect on state economic development.
Instead of a race to the bottom, let’s look for proven ways to lift Delaware’s middle class.
An August 2017 Economic Policy Institute study found that, when organized labor is strong, wages for both union and nonunion workers rise. The reason: when an economic sector becomes more unionized, nonunion employers pay more to retain qualified workers, and norms of higher pay and better conditions become standard.
Also in August, Gallup released a poll showing the American public’s support for labor unions has risen to 61 percent. Gallup also found that more Americans would like to see labor unions have greater influence. It is clear that the American people are waking up and realizing that the path to restoring the middle class is through a strong organized-labor movement.
And, the Economic Policy Institute reports that organized labor is expanding. It found about two-thirds of workers covered by a union contract are women or people of color, 42 percent have a bachelor’s degree or higher, and they are thriving in diverse workplaces, including new-economy workplaces.
Organized labor provides veterans and people for whom college was not an option an opportunity for paths to the middle class. In Delaware, a 2016 VoteVets.org report found veterans comprise more than 12 percent of Delaware’s construction workforce.
So, instead of ideology, let’s help the middle class.
First, recognize the proven, positive impact organized labor can have on the economy and individuals — whether union or nonunion. Unions are not looking to take anything away to benefit a few; unions exist to help everyone share in economic prosperity through rising wages, improved benefits and retirement security.
Second, there needs to be a shift away in thinking that what is good for business is good for the worker. Too often, government policies that only focus on business goals fuel a race to the bottom. There needs to be reset to focus on what is good for workers — in all professions. Then, we will see Delaware’s middle class begin to re-emerge.