By Doug Bandow on 2.12.08 @ 12:05AM
Here's a handy new way to measure the freedom of American workers.
In their heyday, Unions accounted for more than one third of all
jobs in the American workforce. Today, organized labor plays a much
smaller role in our open, competitive economy. Only 12 percent of
workers, and seven percent of private employees, belong to unions.
Why? Because as economic opportunities have increased American
workers have preferred freedom to the regimentation that comes from
organized labor.
That's the big picture, but the details matter. The U.S. remains
a federal system, so the impact of organized labor varies greatly
by state. To measure worker freedom, the Alliance for Worker
Freedom recently released the Index of Worker Freedom (IWF).
The Index relies on ten variables which all measure economic
liberty. They are (1) right to work laws, (2) minimum wage level,
(3) union density, (4) paycheck protection for union members, (5)
prevailing wage legislation, (6) defined contribution public
employee pensions, (7) collective bargaining rights, (8) public
sector unionization levels, (9) entrepreneurial activity, (10) and
workers compensation.
Some of those indices deserve fuller explanation. Twenty-two
states bar mandatory union membership or dues payment, which helps
counteract the coercive aspects of federal labor law, and high
minimum wage levels can drive up unemployment for low skilled
workers.
Union density matters because, as the Alliance for Worker
Freedom's Brian Johnson explains, "Areas of high union density are
often prone to forced persuasion, violence toward non-union
members, intimidation, as well as numerous political and campaign
contributions on behalf of organized labor (often conflicting with
members' political views)."
Prevailing wage laws mean government wage-setting for public
contracts, which costs taxpayers and limits job creation, hurting
lower-skilled workers the most. Public sector bargaining rights for
government employees give unions a stranglehold over the monopoly
public sector. And defined contribution pensions for public
employees allow government to better control costs while providing
portable benefits for workers.
NO STATE SCORED a perfect ten but Utah led the way at nine.
Colorado, Idaho, Mississippi, and South Carolina followed at eight
and an A-. Johnson gave a B+ to Georgia, Indiana, North Dakota,
Virginia, and Wyoming, which all scored seven. A number of states,
mostly southern or midwestern, came in at six and five, winning a B
or B-, respectively.
At the other end of the spectrum, six states scored a perfect
zero, earning a F: Connecticut, Hawaii, Minnesota, New York,
Pennsylvania, and Rhode Island. There were five D's, with the
relevant states receiving just one point out of a possible ten:
California, Delaware, Illinois, Massachusetts, and New Jersey.
Another five states, primarily in the northeast or upper midwest,
came in with two points, and ten states ended up with a middling
three or four points.
The states at the bottom obviously have much to do to improve
their status, as well as the economic environment for their
citizens. But even the best states might improve. Utah could look
into defined contribution pensions for public workers, for
instance.
As one moves down the list the opportunity for improvement
obviously increases. Unfortunately, the political obstacles to
reform remain significant.
This index matters because it measures more than individual
liberty in the abstract. That liberty has practical consequences,
including increased prosperity and, interestingly, population
growth. Although it is hard to prove causation, there is clear and
suspicious correlation between higher IWF rating and increased
population. A fair assumption is that business creation and
entrepreneurial investment flow to freer states and increased
economic opportunity draws workers in its wake.
Labor unions claim to speak for workers, but workers most
prosper when they are free. States that respect the right of
workers to join unions but limit the ability of those unions to
strong arm people into joining are doing the right thing. It's also
the smart thing to do.
topics:
Business, Environment, Law, Unions
