Economy

The Kentucky General Assembly is on track to approve legislation to make Kentucky a so-called right-to-work state by Saturday night. For Republicans, this is the culmination of years of championing the issue.

The bill passed the House Thursday, and assuming it passes the GOP-controlled Senate and is signed into law by Republican Gov. Matt Bevin, Kentucky will become the 27th so-called right-to-work state in the nation.

Twenty-six states already have similar laws, and many of them have been around for decades. But now, with the proliferation of Republican-led legislatures around the country, more states are poised to pass similar regulations.

According to Louisville union organizer Richard Becker, the phrase “right-to-work” is a misnomer.

“This is a complex set of issues,” he says, “that cannot be summed up in three single-syllable words.”

So, what does becoming a right-to-work state mean for Kentucky?

The “right to work” seems awesome. What’s the problem?

Sorry to disappoint you, but you should continue your job hunt, silly rabbit. The phrase does not mean entitlement to a nine-to-five.

So, what does becoming a right-to-work state really mean?

Short answer: It means unions can’t require people to pay dues as a condition of employment. So in any given place, there could be two classes of workers — union and non-union — working under the same union agreement.

Seems legit. Why should a worker be forced to join a union?

Unions are obligated under federal law to represent all workers in a unionized workplace, whether workers are part of the union or not. If a shop has 300 workers, and only 100 are union members, the union is still required to represent all 300 workers.

In a right-to-work state, a worker would not be required to pay any membership dues to the union. But whether they join and pay the dues or not, they would still get the benefit of being represented by the union. Becker, the Kentucky union organizer, likens this to getting a service you didn’t pay for.

Kentucky’s new Republican leadership — Senate President Robert Stivers, House Speaker Jeff Hoover and Gov. Matt Bevin — celebrating their Election Day landslide last year.

Oh. That doesn’t sound fair. Why would Kentucky want to be a right-to-work state?

“It’s like putting a sign in your window to say you’re open for business,” said Dave Adkisson, president and CEO of the Kentucky Chamber of Commerce.

“It’s estimated that a third of companies don’t even look at non-right-to-work states,” he said of companies that are looking to relocate. “I’m convinced we’re losing thousands of jobs per year in Kentucky by not being a right-to-work state.”

Though Adkisson did not name a company who has chosen another state over the commonwealth, he said he knows businesses that have chosen to relocate to nearby right-to-work states such as Tennessee, Alabama and South Carolina.

Those are all Southern states. Why?

Kentucky is the only state in the South that doesn’t have right-to-work laws, which makes it an outlier in the region, Adkisson said. And whether Kentucky is considered the Midwest or the South, he said Southern states are the commonwealth’s main competition.

So why right-to-work now in Kentucky?

The business community and the Kentucky Chamber of Commerce have supported right-to-work for at least three decades. “Clearly the political environment is Frankfort has changed,” Adkisson said. Republicans now control the House and Senate under the Republican governor, Matt Bevin. “And they are very favorable to right-to-work,” he said.

Will it kill labor unions?

No, but it could weaken them. Or, maybe not.

John Beck is a professor at Michigan State University’s School of Human Resources and Labor Relations. He said strong unions — like the UAW — haven’t seen a significant drop in membership even after states pass right-to-work legislation. But typically, unions that support public sector workers — like teachers — do take hits.

He added that the states that have had right-to-work laws for decades rank among those with the smallest number of union workers.

But: “In those states that had high unionization rates before the onset of right-to-work, they still were able to keep a good amount of people in the union,” he said.

Mike Elk is senior labor reporter at the Payday Report in Chattanooga, Tennessee, which covers labor issues. He said union membership has been decreasing in the Midwest but not in the South.

“The South right now is the fastest-growing region in the United States for union membership,” Elk said.

Last year, 150,000 workers chose to join unions in the region, and union membership in the region is close to 3 million. This suggests an opportunity for unions to still grow in Kentucky.

“What it means is that unions are going to have to work really hard to get every single member to sign up and to expand,” Elk said. “And in some states, some unions say right-to-work causes them to be more competitive.” 

But Beck said over the long-term, unions and workers could both suffer if the number of dues-paying union members drops in Kentucky.

“If the union weakens because it has less and less dues dollars and less and less members, then it has a harder time bargaining subsequent contracts and getting the kind of good wages, benefits or contract provisions that they’ve had in the past,” Beck said.

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Ford has two major union facilities in Louisville.

When will the right-to-work bill go into effect?

Technically, it’ll go into effect whenever Bevin signs it. Practically, it’ll go into effect when union contracts are up and due to be renegotiated. For UAW Local 862, for example, which represents workers at Ford’s two large Louisville auto plants, they’ll be covered until 2019, which is when the current collective bargaining agreement expires.

Do right-to-work laws work?

It’s hard to tell. And it depends on what you mean by “work.”

A 2015 study by the Economic Policy Institute — a nonprofit, nonpartisan think tank that gets just over a quarter of its funding from labor unions — found wages and benefits in right-to-work states were lower than those in non-right-to-work states.

The study controlled for variables across states (like demographics, jobs, economic conditions and cost-of-living differences) and still found that wages in right-to-work states were 3.1 percent lower than those in non-right-to-work states. There were disparities in employer-sponsored health insurance and pensions, too.

Anna Baumann is a research and policy associate for the Kentucky Center for Economic Policy. She testified this week at the statehouse on the economic impacts of the right-to-work bill.

“There’s definitely a wage advantage to being employed by a unionized organization,” she said. “Wages for workers in right-to-work states are about $1,500 lower a year.”

There are many factors that affect wages — not just right-to-work laws. And it’s not just about lower wages. Baumann said work fatalities are higher in right-to-work states as well.

Mike Elk of Payday Report speculated a far bigger threat to unions is President-elect Donald Trump. Elk said unions have been able to grow in the South because of the National Labor Relations Board.

“If Donald Trump defunds the National Labor Relations Board, then there’s not going to be much prosecution of union-busting nationwide,” Elk said.

And when the board doesn’t go after employers, it makes it harder for unions to organize.

“In my opinion, that’s going to be a very big threat, in some ways bigger than right-to-work,” Elk said. “And it’s going to force unions to adapt and become more militant and seek innovative ways to organize — or die.”

Erica Peterson contributed to this story.

Roxanne Scott covers the economy for WFPL News.