States Leading a Pro-Growth Rebellion

Art Laffer

Tuesday, 14 Feb 2012 08:00 AM

By Julie Crawshaw

Economist and Ronald Reagan adviser Arthur Laffer says that states are sending Washington a message: Aligning yourself too closely to unions is a losing strategy.

“States are now starting to change the playing field,” Laffer writes in The Wall Street Journal. “The latest shock to the Democratic agenda is Indiana's adoption of a right-to-work law that bans contracts that require private-sector employees to pay union dues.”

That's progress, and part of a growing trend at the state level, says Laffer.

Indiana is now the 23rd state to adopt a right-to-work law.

“The benefits to states having right-to-work legislation are overwhelming,” Laffer says.

Economies in states with right-to-work laws grow significantly faster than those in forced-union states, have higher employment growth, attract more residents, and have more rapid growth in state and local tax revenues than forced-union states.

Laffer observes that it wasn’t easy for Indiana Governor Mitch Daniels to get the bill passed. Not only did every Democrat in Indiana's House and Senate vote against the bill, but five Republicans in the House and nine in the Senate also voted against it, testament to the influence of union power in Washington and state capitals across America.

Most high-school civics students, Laffer notes, would agree that no American worker should either be prohibited from joining a union or required to join one as a condition of employment.

“And no union member—or anyone else for that matter—should be required to contribute to political causes they oppose,” he says.

“Yet in 27 states, if more than 50 percent of workers agree to create a union shop, workers are still required to join the union and pay dues even if those dues are used for political causes of which they disapprove.”

Democrats, for better or worse, have staked their future on tight partnership with the unions, Laffer points out.

“Unfortunately for them, not only is union membership a fraction of what it once was, but half of all union members today are public-sector employees—teachers, nurses, police officers, firemen, prison guards,” he says.

“In 1983, when President Reagan fired the air-traffic controllers for walking out on their jobs, two-thirds of all union members were in the private sector.”

According to a report from the U.S. Bureau of Labor, 2011 figures show that public-sector workers had a union membership rate more than five times higher than that of private-sector workers.