Earlier in March, West Virginia became the 26th state to enact right-to-work (RTW) legislation. RTW laws allow private sector employees to opt out of union membership. RTW laws have been around since the late 1940s, but interest in RTW legislation has been particularly high over the past four years in many union-dominated states, such as Michigan, Wisconsin, and West Virginia – all of which recently adopted right-to-work laws.
RTW opponents say right-to-work laws lower private sector wages, but research shows this claim isn’t true. James Sherk, a research fellow of labor economics at The Heritage Foundation wrote in a 2015 Backgrounder, “[W]hen living costs are fully taken into account, private-sector workers in RTW states enjoy real wages equivalent to those in non-RTW states. Policymakers considering RTW legislation may do so confident that it will have no negative impact on private-sector wages. RTW laws do appear to slightly reduce the pay of government employees, easing constraints on hard-pressed state budgets.”
On March 8, Jesse Hathaway, managing editor of Budget & Tax News, testified before the Maryland House Economic Matters Committee, where he explained the positive effects RTW laws have on economic growth: “Right-to-work laws create new jobs and foster economic and population growth. According to the Bureau of Labor Statistics, between 2002 and 2012, the economies of right-to-work states grew by 62 percent, which far outpaces the 46.5 percent growth in non-right-to-work states. Maryland should strongly consider implementing right-to-work legislation and reaping the economic benefits it will provide.”
In a recent Heartlander article, Jim Shaffer, president of the Public Policy Foundation of West Virginia, was quoted in support of RTW laws, which he says provide workers with economic freedoms that have many benefits: “Economic freedom [is] the ability to participate [in and the ability to negotiate with] the exchange of goods and services between consenting transparent individuals, unencumbered by the auspices of government … this is the very essence of a free market. By being forced to join a union as a condition of employment, individuals give up their right to free association [and are] forced to acquiesce to the agenda of a group that does not respect the right to voluntarily organize as a personal choice.”
Right-to-work laws provide liberty to workers, create new jobs, and foster economic and population growth. As additional state legislators and officials learn about the important advantages RTW laws provide states that choose to enact them, more states will implement right-to-work reform, providing additional freedoms and prosperity to millions of Americans.
What We’re Working On
Budget & Tax
Research & Commentary: Maryland Corporate Income Tax Reform
Research shows high corporate income taxes are a deterrent to economic development, discouraging new businesses and high-income earners from moving into a market and incentivizing current businesses to leave. To address these problems, legislators in Maryland are now considering a significant cut in the state’s corporate income tax, along with changes that would streamline the tax.
In this Research & Commentary, Senior Policy Analyst Matthew Glans argues, “The proposed corporate income tax cuts would be a step in the right direction, but lawmakers should go even further. Lowering income taxes dramatically improves a state’s economy and generates new jobs.” Read more
Heartland Daily Podcast – Kyle Maichle: Free Speech on College Campuses
In this edition of The Heartland Daily Podcast, Kyle Maichle, project manager for constitutional reform, joins HDP host Donald Kendal to discuss free-speech issues on college campuses. From free-speech codes to “safe spaces,” the rights of students and staff members at college campuses around the country are being hotly debated and have gained national media attention. In this interview, Maichle gives listeners some background information on the growing threats to free speech on college campuses and discusses a new report from the Foundation for Individual Rights in Education, which ranks colleges based on their free-speech restrictions. Listen here
Research & Commentary: Alabama Education Savings Accounts
On March 9, the Alabama House Education Policy Committee passed a bill that would establish an education savings account (ESA) program for children with special needs, children of active-duty Armed Forces members, children of those killed in combat, and foster children who have been adopted or have legal guardians. Under the proposed legislation, parents of these students would be able to use designated funds to attend a private school or to help pay for other education options that better suit their children’s needs. The proposal would limit new participants in the program to 1,000 each year. Just over 82,000 Alabama special-needs students qualified for an ESA in 2014, according to the Alabama Department of Education (ADE). Under the new proposal, each student would receive 90 percent of allocated per-student public funds; the student’s local school district would receive the other 10 percent.
In this Research & Commentary, Policy Analyst Tim Benson explains to readers although the plan is a step in the right direction, much more should be done: “While providing ESAs for students with special needs would be a great step forward for Alabama, the passage of a universal ESA bill would be ideal and go a long way toward remedying the state’s dismal record of failing to educate its children.” Read more
Energy & Environment
Research & Commentary: A Summary of the Impacts of Industrial Silica Sand (Frac Sand) Mining
Isaac Orr, research fellow at The Heartland Institute, and Mark Krumenacher, senior principal and senior vice president of GZA GeoEnvironmental, Inc., have written a series of four Policy Studies investigating the economic, environmental, social, and roadway impacts of industrial silica sand mining, also known as “frac sand” mining. These studies are intended to help local policymakers and the general public better understand the potential impacts, both positive and negative, of industrial sand operations on their communities. This mining, the authors conclude, “is an indispensable part of life. It is not a threat to tourism, scenic beauty, or property values.” While citizens will have their concerns about the silica sand mining process, “The way to address emotional reactions is to acknowledge them, understand them, and respond to them with scientific evidence and real-world data. … The [silica-sand mining] process has become a significant driver of economic growth in the Upper Midwest and, if done in a [safe and] environmentally responsible manner, it will be an important source employment and earnings for decades to come.” Read more
Research & Commentary: Health Care Price Transparency
Access to transparent health care prices remains elusive for most U.S. health care consumers, who are often insulated from price considerations by the standard third-party payment systems commonly used for medical billing. This leaves patients unaware of the cost of the treatments they receive. Patients are not given an incentive to shop around; they pay the same copay regardless of the services they choose and are not penalized for ineffective choices. Extra costs are passed on to the insurer, and premium prices increase as a result.
Several states are now considering health care price transparency legislation that would give patients greater access to price information. In this Research & Commentary, Senior Policy Analyst Matthew Glans examines price transparency laws and concludes they help to promote competition and helps to enhance product quality: “State legislators should work to promote health care price transparency in their states to help empower consumers and lower health care costs.” Read more
From Our Free-Market Friends
The Heritage Foundation Releases the 2016 Index of Economic Freedom
For over two decades, the Index of Economic Freedom (IEF) has measured the impact of liberty and free markets around the globe, and the 2016 IEF confirms the formidable positive relationship between economic freedom and progress. IEF covers 10 freedoms – from property rights to entrepreneurship – in 186 countries. Economic freedom is measured using 10 quantitative and qualitative factors, grouped into four broad categories, including, rule of law (property rights, freedom from corruption); limited government (fiscal freedom, government spending); regulatory efficiency (business freedom, labor freedom, monetary freedom); and open markets (trade freedom, investment freedom, financial freedom). Read more