Economy & Jobs

How Do Right-to-Work Laws Affect the Workforce?

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Bills targeting unions in the United States have recently multiplied. But is weakening unions a logical step for a capitalist society? Government intervention can be seen as an unwelcome force when it comes to organized labor, making it difficult for unions to protect employee rights. But others argue that union obligations are outdated and could hurt employees. When it comes to understanding unions, it is important to also understand right-to-work laws, an important concept that is shaping today’s American workforce.

What Are Right-to-Work Laws?

A right-to-work law removes obligatory union membership and with it, union dues and other associated fees. Essentially, it affirms the right of American workers to choose whether they want to belong to a union, removing the requirement to join one in order to work at a particular place of employment. By opting out of paid union membership, employees can receive any benefits that might result from collective bargaining—negotiation between employers and employees over working conditions—without having to regularly fork over dollars from their paycheck.

Most states in the southern U.S. have right-to-work laws, including Alabama, Georgia, Florida, Tennessee, and Texas. Most recently, Wisconsin became the 25th state in the nation to enact right-to-work laws. But states are not alone in their ability to make changes to organized labor. In December 2014, Warren County, Kentucky, passed America’s first local right-to-work ordinance. This ordinance most specifically affects a unionized Corvette plant located in the county. Now, employees have the option to pay union dues as an employee instead of being required to.

Effect on Millennials

Millennials are growing in the workforce. By 2025, the Brookings Institution states that Millennials will represent 75 percent of of workers. Any change that weakens organized labor could therefore directly affect working Millennials for years to come.

The Pew Research Center states that 61 percent of workers under age 30 view labor unions favorably. However, data from the Bureau of Labor Statistics (BLS) reveals that the Millennial generation is the least likely age group to join a union. Millennial union membership among 16- to 24-year-olds is at about 4.5 percent, while membership among those aged 25 to 34 is at about 9.5 percent. These low membership numbers could likely stem from an inability for Millennials to join due to a poor job outlook or union availability. And with more states passing right-to-work regulations, Millennials may increasingly be unable to enjoy the benefits that labor unions can provide.

The Bottom Line on Unions

Numbers from the AFL-CIO, the umbrella federation for American unions, suggest that unions are still pivotal for many workers: 56 unions under the AFL-CIO currently represent 12.5 million working Americans. While right-to-work regulations won’t necessarily decrease the number of unions, they could lead to a decrease in membership numbers and funding. That, in turn, might lessen their power when collectively bargaining with employers for better working conditions.

Right-to-work laws may be influencing your local workforce, but they may also be affecting your state’s population. According to The Wealth of States, right-to-work states grew in populations at an average of 12.6 percent between 2002 and 2012, while “forced union states” averaged about 6.5 percent population growth. On the flip side, the influence continues in the form of economic inequality. According to the New York Times, approximately 20 percent of the increase in economic inequality among American males is a result of the decline in unions over the past few decades.

At the end of the day, regardless of whether union membership should be required, there is no doubt that unions have had an immense impact on the history of American industrialization and continue to have tremendous effect on workers’ rights today. As you begin your professional career, ask yourself: Where does my state stand on right-to-work laws?

LaTisha Styles is a motivational speaker, millennial money expert, and spokesperson specializing in simple finance for millennials. LaTisha is the producer and host of Young Finances TV, a weekly series featuring funny, insightful videos on the basics of personal finance. LaTisha has been quoted in Forbes and Mainstreet, featured in The Economist, and mentioned in US News as a top personal finance expert to follow on Twitter. You can follow LaTisha on Twitter for daily millennial money tips to budget, invest and achieve success!