New Hampshire’s unemployment rate last month was 2.5 percent. The state sorely needs more workers, especially employees with skills that are in demand. But the cost of living here is high and wages relatively low. The state’s default minimum wage of $7.25 per hour, the federal minimum, is by far the lowest in New England. That doesn’t help.
The New Hampshire House is set to vote on legislation that would help keep wages low, a so-called right-to-work law. The Senate has approved it. Gov. Sununu supports it. But the House has rejected right-to-work many times before and it should do so again.
Corporate profits are at record highs, but wages, despite a slight recent uptick, have been stagnant for more than three decades. With income disparity, the gap between top earners and everyone else, at record levels, does it make sense to pass a law that means lower paychecks for low- and middle-income workers? Of course not. Enacting right-to-work would be bad for the state’s workers and, despite claims to the contrary, bad for the state’s economy.
Right-to-work laws were created to weaken unions because unions have historically been effective at increasing wages and benefits for employees. In the 1950s, 1 in 3 private sector employees were covered by unions. Today that figure is 1 in 20, according to CBS News.
Even the name “right-to-work” is a fraud. No worker, by law, can be forced to join a union as a condition of employment.
“At least for middle-wage men, the impact of the erosion of unions on the wages of both union and non-union workers is likely the largest single factor underlying wage stagnation and wage inequality,” according to a report from the liberal-leaning Economic Policy Institute cited by CBS. They are rightly referred to by opponents as right-to-freeload laws.
Federal law requires union negotiators to work on behalf of all workers, whether they are union members or not. The cost for lawyers, negotiators and staff, in a process that can sometimes take years, is considerable. In exchange for the better benefits, working conditions and wages workers generally receive, unions are allowed to charge non-union members an agency fee. None of that money, by law, may be used for political purposes.
Since they had to pay a big percentage of union dues anyway, most employees became union members. But right-to-work laws allow non-union workers to get the benefit of union membership without paying for it. As a result, unions lose members, revenue and bargaining power. Corporate profits increase and wages stagnate.
Wages in states with right-to-work laws are about 3 percent lower than other states, but that tells only part of the story. Unions say the loss, because benefits are smaller too, is many times that amount.
Passing a right-to-work law might draw employers looking to pay the lowest possible wages, but instead of attracting skilled workers and their families it will drive them away. The race to the bottom is not one New Hampshire should try to win.