Unions hinder economic growth and the free market

Reuters

Anti right-to-work protester Susan Laurin (C) of Michigan State Employees Union Local 6000 yells with fellow protesters outside of Michigan's state capitol building in Lansing December 11, 2012.

Article Highlights

  • Union shop laws, which right-to-work laws repeal, are a means of circumventing a competitive labor market.

    Tweet This

  • States should seek to pass right-to-work laws as part of reforms to strengthen their economies and enhance growth.

    Tweet This

  • State & local governments often seem to do more to promote entrenched interests than a true culture of competition.

    Tweet This

  • Legal preferences are anticompetitive, and state lawmakers should be rooting them out.

    Tweet This

Editor's Note: This article originally appeared in US News & World Report's 'Debate Club' in response to the question: Are 'right-to-work' laws good for states?

Union shop laws, which right-to-work laws repeal, are a means of circumventing a competitive labor market. They treat workers as interchangeable parts rather than individuals, force them to join organizations with strong political preferences that they may not share, and have historically been a means of privileging certain groups at the expense of others. They may be effective at shifting economic resources, but they are a hindrance to growing the economy and creating new opportunity.

So it is right that states should seek to pass right-to-work laws as part of reforms to strengthen their economies and enhance economic growth. This is not about ideological opposition to unions; it's about increasing the economic freedom of Americans in an increasingly globalized, competitive economy.

But labor unions are far from the only threat to free markets and a competitive economy that state lawmakers should address. In the name of being "pro-business," states hand out over $80 billion a year in business incentives, according to a recent analysis by the New York Times. The vast majority of these do little or nothing to promote economic growth; they are merely giveaways to the well-connected. This doesn't begin to count nonfinancial regulatory preferences that benefit some firms over others, the abuse of eminent domain policies for private gain, or the almost $100 billion in federal business incentives.

Indeed, in all too many instances, state and local governments seem to do more to promote entrenched interests than promote a true culture of competition. Lawmakers should be thinking about how to remove barriers to entry rather than which firms they should subsidize; they should be simplifying tax codes and regulatory burdens rather than carving out loopholes and making it harder for entrepreneurs to start or expand businesses.

Legal preferences—whether they are for unions, specific firms, politically-connected operators, or whole economic sectors—are anticompetitive, and state lawmakers should be rooting them out.

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Arthur C.
Brooks

What's new on AEI

Love people, not pleasure
image Oval Office lacks resolve on Ukraine
image Middle East Morass: A public opinion rundown of Iraq, Iran, and more
image Verizon's Inspire Her Mind ad and the facts they didn't tell you
AEI on Facebook
Events Calendar
  • 21
    MON
  • 22
    TUE
  • 23
    WED
  • 24
    THU
  • 25
    FRI
Monday, July 21, 2014 | 9:15 a.m. – 11:30 a.m.
Closing the gaps in health outcomes: Alternative paths forward

Please join us for a broader exploration of targeted interventions that provide real promise for reducing health disparities, limiting or delaying the onset of chronic health conditions, and improving the performance of the US health care system.

Monday, July 21, 2014 | 4:00 p.m. – 5:30 p.m.
Comprehending comprehensive universities

Join us for a panel discussion that seeks to comprehend the comprehensives and to determine the role these schools play in the nation’s college completion agenda.

Event Registration is Closed
Tuesday, July 22, 2014 | 8:50 a.m. – 12:00 p.m.
Who governs the Internet? A conversation on securing the multistakeholder process

Please join AEI’s Center for Internet, Communications, and Technology Policy for a conference to address key steps we can take, as members of the global community, to maintain a free Internet.

Event Registration is Closed
Thursday, July 24, 2014 | 9:00 a.m. – 10:00 a.m.
Expanding opportunity in America: A conversation with House Budget Committee Chairman Paul Ryan

Please join us as House Budget Committee Chairman Paul Ryan (R-WI) unveils a new set of policy reforms aimed at reducing poverty and increasing upward mobility throughout America.

Thursday, July 24, 2014 | 6:00 p.m. – 7:15 p.m.
Is it time to end the Export-Import Bank?

We welcome you to join us at AEI as POLITICO’s Ben White moderates a lively debate between Tim Carney, one of the bank’s fiercest critics, and Tony Fratto, one of the agency’s staunchest defenders.

No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.