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Close Shop

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Submitted By Rocket60
Words 1669
Pages 7
Outline

Thesis:
Union Close Shops are economically depressing to the region that they exist in.

Evidence 1:
Retards economic growth of the region 1. Louisiana and Illinois study

Evidence 2:
Reduces company competiveness in the national and global market 1.

Evidence 3:
Reduces private investment 1.

Evidence 4:
Decreases worker’s earned income and raises the cost of living.

Thesis:
Union Close Shops are economically depressing to the region that they exist in.
The late Sen. Paul Tsongas once said, “You cannot redistribute wealth you never created. You can’t be pro-jobs and anti-business at the same time. You cannot love employment and hate employers.” Currently 22 states have right-to-work laws, which guarantee workers the right to determine individually whether or not they will join or otherwise support a labor union. The remaining states are

Evidence 1:
Retards economic growth of the region

Every States are ranked on their economic competitiveness in a report called "Rich States, Poor States" for the American Legislative Exchange Council. This ranking uses 15 fiscal, tax and regulatory variables to determine which states have policies that are most conducive to prosperity. One of these 15 policies, right to work laws, has consistently stood out as one of the most important in predicting where jobs will be created and incomes will rise.
States that have right-to-work laws grow faster than states with forced unionism. Over the past decade the right-to-work states grew faster in nearly every respect than their union-shop counterparts: 54.6% versus 41.1% in gross state product, 53.3% versus 40.6% in personal income, 11.9% versus 6.1% in population, and 4.1% versus -0.6% in payrolls.

In a separate study Prof. Vedder of ______ found that right to work states are getting richer over time. Prof. Vedder found a 23% higher per capita income growth rate in right-to-work states than in forced-union states, which over the period 1977-2007 amounted to a $2,760 larger increase in per-person income in those states.
Evidence 2:
Reduces job opportunity and raises unemployment.

Just by looking at the raw aggregate numbers from the U.S. Bureau of Labor Statistics it is quite clear that more jobs have been created in Right to Work states than in non-RTW states over the past twenty years. One reason why the Right to Work States is out pacing Union States is that companies are choosing to build their factories in states without union close shops. The auto industry is a prime example of this.
In the past 20 years all new auto plants built in the United States, 6 plants: Nissan in TN & MS, Mercedes-Benz in AL, BMW in SC, Honda in AL, Hyundai in AL, and Mercedes-Benz in GA, were built in Right to Work states. Given the fact that only 22 out of 50 states have Right to Work laws, it appears unlikely that all 6 plants were located in Right to Work states due to chance alone. Therefore, it appears as if foreign automakers may be using a state’s Right to Work law status as a factor in determining plant site selection. This trend is not isolated to foreign car manufactures. Boring has decided to produce its new 787 Dreamliner at a new assembly plant in South Carolina—a "right to-work" state with a law against compulsory union membership. Boeing officials have admitted that their decision to build the new Dreamliner plant in South Carolina was due in part to the fact that the company could not "afford a work stoppage every three years" as had happened in Washington State over that past decade. Boeing is merely making a business decision based on economic reality. In fact, the company chose South Carolina for the new plant even though Washington has no income tax and South Carolina does. The decision made by Boeing makes it clear that forced union membership hinders company competiveness in the national and global market.

Union supporters often accuse right to work states of being pro-business and not for workers while unions prevent workers’ from receiving unfair wages. But this argument is becoming less and less viable. Ironically, one of the most devastating blows against this indictment has been dealt by F. Howard Nelson, a veteran researcher for the 1.3 million-member American Federation of Teachers (AFT) union.
The AFT union is one of the largest and most powerful affiliates of the vast, 13 million-member AFL-CIO Empire. More than a dozen years ago, Dr. Nelson created a cost-of-living index. Drawing on data from both government and private sources, this index compares the cost of housing, food, clothing, transportation, medical care, and other necessities in the US. In this index, a state whose average cost of living is exactly equal to the U.S. average would score 1.00. What Dr. Nelson did not expect was that the index showed that when the average weekly earnings for full-time wage and salary employees in the US are adjusted for differences in living costs, the real earnings of employees in Right to Work states are shown to be higher.
In the index for 2000 the living expenses for employees in non-Right to Work states are overall 4.4% higher than the national average while living costs in Right to Work states are 7.1% more affordable than the national average. (See Table 1) It also showed that employees in Right to Work states earned an average of $638 a week, after adjusting for the cost of living, compared to $632 in non-Right to Work states.
But this comparison actually understates, in two ways, the advantage employees in Right to Work states have in real, spendable income. Firstly the prices incorporated by Dr. Nelson in his cost-of-living index exclude state income taxes, which are on average significantly lower in Right to Work states. Second, the Nelson index does not account for the disparities in the federal tax burden carried by employees in different states.
Progressive federal income tax rates are levied on nominal incomes. According to the Nelson index, the average employee in non-Right to Work California would have to earn nearly $65,000 a year to enjoy the same pre-tax purchasing power as an employee in Right to Work Florida who earns $50,000 a year. However, other things being equal, the California employee would have to fork out a significantly higher share of his or her nominally higher income in federal income taxes. As a result, the Californian’s real, after-tax living standards would actually be lower than the worker in Florida.
After subtracting state income taxes and all federal taxes, the 2000 cost-of-living-adjusted mean weekly earnings of employees in Right to Work states was $484, compared to just $468 in non-Right to Work states. Where forced dues are legal, union officials use their power to dislocate labor markets, jack up costs, and bankroll Tax-and-Spend, regulation-happy state legislators and governors.

Table 1 Average Cost of
Living Index in 2000: Right to Work vs.
Non Right to Work | | | | | Non-Right to Work States | 2000 AFTCost of LivingIndex | Right to Work States | 2000 AFTCost of LivingIndex | | | | | Alaska | 1.230 | Alabama | 0.910 | California | 1.219 | Arizona | 0.959 | Colorado | 1.081 | Arkansas | 0.891 | Connecticut | 1.087 | Florida | 0.942 | Delaware | 0.970 | Georgia | 0.938 | Hawaii | 1.312 | Idaho | 0.938 | Illinois | 0.992 | Iowa | 0.921 | Indiana | 0.924 | Kansas | 0.921 | Kentucky | 0.910 | Louisiana | 0.936 | Maine | 0.992 | Mississippi | 0.896 | Maryland | 1.009 | Nebraska | 0.927 | Massachusetts | 1.144 | Nevada | 0.934 | Michigan | 0.974 | North Carolina | 0.931 | Minnesota | 0.989 | North Dakota | 0.924 | Missouri | 0.930 | South Carolina | 0.930 | Montana | 0.979 | South Dakota | 0.917 | New Hampshire | 1.062 | Tennessee | 0.915 | New Jersey | 1.057 | Texas | 0.904 | New Mexico | 0.962 | Utah | 1.017 | New York | 1.070 | Virginia | 0.954 | Ohio | 0.964 | Wyoming | 0.997 | Oklahoma* | 0.898 | | | Oregon | 1.036 | Average | 0.929 | Pennsylvania | 0.937 | | | Rhode Island | 0.987 | | | Vermont | 0.999 | | | Washington | 1.073 | | | West Virginia | 0.907 | Sources:
U.S. Census Bureau, Statistical Abstract of the U.S., 2001; U.S. Bureau of Labor Statistics, Employment
& Earnings, May 2001; AFT Survey & Analysis of Teacher Salary Trends, 2001. | Wisconsin | 0.964 | | | | | Average | 1.044 | | *
Oklahoma became a Right to Work state in September 2001. |

Table 1 Average Cost of
Living Index in 2000: Right to Work vs.
Non Right to Work | | | | | Non-Right to Work States | 2000 AFTCost of LivingIndex | Right to Work States | 2000 AFTCost of LivingIndex | | | | | Alaska | 1.230 | Alabama | 0.910 | California | 1.219 | Arizona | 0.959 | Colorado | 1.081 | Arkansas | 0.891 | Connecticut | 1.087 | Florida | 0.942 | Delaware | 0.970 | Georgia | 0.938 | Hawaii | 1.312 | Idaho | 0.938 | Illinois | 0.992 | Iowa | 0.921 | Indiana | 0.924 | Kansas | 0.921 | Kentucky | 0.910 | Louisiana | 0.936 | Maine | 0.992 | Mississippi | 0.896 | Maryland | 1.009 | Nebraska | 0.927 | Massachusetts | 1.144 | Nevada | 0.934 | Michigan | 0.974 | North Carolina | 0.931 | Minnesota | 0.989 | North Dakota | 0.924 | Missouri | 0.930 | South Carolina | 0.930 | Montana | 0.979 | South Dakota | 0.917 | New Hampshire | 1.062 | Tennessee | 0.915 | New Jersey | 1.057 | Texas | 0.904 | New Mexico | 0.962 | Utah | 1.017 | New York | 1.070 | Virginia | 0.954 | Ohio | 0.964 | Wyoming | 0.997 | Oklahoma* | 0.898 | | | Oregon | 1.036 | Average | 0.929 | Pennsylvania | 0.937 | | | Rhode Island | 0.987 | | | Vermont | 0.999 | | | Washington | 1.073 | | | West Virginia | 0.907 | Sources:
U.S. Census Bureau, Statistical Abstract of the U.S., 2001; U.S. Bureau of Labor Statistics, Employment
& Earnings, May 2001; AFT Survey & Analysis of Teacher Salary Trends, 2001. | Wisconsin | 0.964 | | | | | Average | 1.044 | | *
Oklahoma became a Right to Work state in September 2001. |

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