As auto workers at General Motors, Ford, and Stellantis continue to strike for higher wages and shorter work weeks, the debate over unionization has emerged again.

President Biden has adopted a whole-of-government approach to bolster a shrinking union workforce. He has repeatedly touted legislation like the Protecting the Right to Organize (PRO) Act that, if passed, would make union membership conditional for employment under “fair share agreements.” Fair share agreements mandate that unionized employers fire non-unionized employees. 

Recently, the Treasury Department released its first-ever report touting the benefits of unions on the U.S. economy—one of 70 derivatives stemming from White House Task Force on Worker Organizing and Empowerment. Among its four primary findings, the report claims unionization has spillover effects extending to non-unionized workers: 

Workers at nonunion firms are rewarded from unionization efforts at other firms in two main ways. First, nonunion firms in competition with unionized firms may themselves raise wages, change hiring practices, or improve amenities to either attract workers to their firm or to avoid unionization. Second, some of the effects unions have on the labor market are felt by a broader group of firms, such as changing workplace safety norms or advocating for changes in minimum wage laws.
Labor Unions and the Middle Class Report, September 2023

Mostly false or misleading. Significant errors or omissions. Mostly make believe.

The Treasury Department is misleading the public about positive spillover effects of unionization on non-unionized entities. 

The opposite, actually, is true. 

Most notably, a 2021 Harvard University report found that right-to-work states boasted more positive spillover effects. Compared to unionized areas, right-to-work (RTW) states boast 1.6% higher employment, 1.4% higher labor participation, and 0.34% lower disability receipts. 

The study also found RTW laws are “associated with lower childhood poverty rates and greater upward mobility”—with “children at the 25th percentile of the parental income distribution during childhood have a 1.7 percentage point higher probability of reaching the top income quintile during adulthood if they grew up in a RTW location.” Greater upward mobility is also observed in states that give workers latitude over joining a union or not.

Moreover, right-to-work laws are shown to improve the well-being of both non-unionized and unionized workers. 

In a 2019 Journal of Law and Economics study, the author argues RTW laws have positive impacts on union workers by raising “the optimism that union workers have about their economic prospects.” Since these states don’t force workers to opt-into union dues, he adds RTW laws produce “competitive effects” that incentivize unions to improve and offer better services on par with their non-unionized counterparts.

Businesses also prefer right-to-work states. After a Virginia bill to repeal right-to-work was introduced in 2019, Virginia’s Economic Development Partnership (VEDP) warned the efforts would scare off future business deals in the Commonwealth as a majority of corporate executives and site-selection consultants said “it is ‘important’ or ‘very important’ for a state to have ‘right to work’ for location decisions.” 

The union workforce is at a historic low—10.1% in 2022—despite the push to unionize more businesses. This is down from 1983, when union jobs comprised 20.1% of the U.S. workforce.

As I noted at IWF last September, the decline in union membership coincides with the rise of non-unionized independent contractors choosing flexible work arrangements over traditional jobs: 

A single poll showing glowing approval for unionized work doesn’t paint the full picture of the U.S. workforce. It’s imperative to examine where workers are setting their sights on: high-paying, flexible work arrangements.

Workers are moving to right-to-work states like Florida, Texas, North Carolina, and South Carolina—the four states that enjoyed the largest in-migration growth in 2022—to enjoy greater upward mobility and not be forced into undesirable work arrangements. 

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