Read the full report (CAP)
The Michigan state legislature last week rushed through a bill to institute a so-called “right-to-work” law, which will make it illegal for workers and employers to negotiate a contract requiring everyone who benefits from a union contract to pay their fair share of the costs of union representation. If Michigan Gov. Rick Snyder signs this legislation it will not only weaken unions, but also hurt workers, the middle class, and local economies in general.
The preponderance of economic evidence on the effect of labor unions on productivity and economic growth show that unions foster high-productivity, high-profit firms. Bottom line: Strong unions are good for jobs and “right-to-work” laws are not, as the evidence in this brief shows. Unions support a strong middle class and play a critical role in supporting our nation’s economic competitiveness by:
- Supporting high-productivity workplaces where information can flow from the bottom-up to improve business performance
- Supporting higher wages and benefits, not just for union members but across the board. High union density in a region tends to support higher wages across the region regardless of union representation, especially for workers at the lower end of the distribution
- Contributing to macroeconomic stability by giving certainty to consumption, saving, and investment in the economy
- Advocating for broader worker protections needed for families to make human-capital investments—strong public education, social safety nets, minimum wages, paid leave, and even civil rights and efficient regulation