Abstract
Recent empirical analysis of state right-to-work legislation indicates that a negative wage effect may result as a consequence of banning union shop contracts. It has been previously shown that industrial unionism tends to improve the relative wage position of black workers. Thus, it is hypothesized that if state right-to-work laws weaken the economic power of unions to raise wages, black workers will experience a disproportionate decline in their relative wage position. Black workers in right-to-work states would therefore experience a reduction in their relative economic position unless a strong positive relative employment effect occurs in response to the decline in wages. Using a cross-sectional regression model this article examines the relative employment effect due to right-to-work legislation. The results indicate that black workers experience a statistically significant decline in their relative employment rate within right-to-work states. When this finding is coupled with the hypothesized negative wage effect, it is concluded that right-to-work legislation results in a worsening of the net economic position of black workers.
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Notes
States with right-to-work laws in effect in 1984 include: Alabama, Arizona, Arkansas, Florida, Georgia, Iowa, Kansas, Louisiana, Mississippi, Nebraska, Nevada, North Carolina, North Dakota, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, and Wyoming.
See Keith Lumsden and Craig Petersen, “The Effect of Right to Work Laws on Unionism in the United States,”Journal of Political Economy, vol. 83 (December 1975), 1237–1248; David J. McCrone and Richard J. Hardy, “Civil Rights Policies and the Achievement of Racial Economic Equality, 1948–1975,”American Journal of Political Science, vol. 22 (February 1978), 138-150; Ronald S. Warren and Robert P. Strauss, “A Mixed Logit Model of the Relationship Between Unionization and Right to Work Legislation,”Journal of Political Economy, vol. 86 (June 1979), 648-654; Walter J. Wessels, “Economic Effects of Right to Work Laws,”Journal of Labor Research, vol. 2 (Spring 1981), 55–75; William Moore and Robert Newman, “The Effects of Right to Work Laws: A Review of the Literature,”Industrial and Labor Relations Review, vol. 38 (July 1985), 571–585; William Moore, James Dunlevey, and Robert Newman, “Do Right to Work Laws Matter?: Comment,”Southern Economic Journal, vol. 53 (October 1986), 515-524.
Thomas M. Carroll, “Right to Work Laws Do Matter,”Southern Economic Journal, vol. 50 (October 1983), 494–509 and Thomas M. Carroll, “Do Right to Work Laws Matter?: Reply,”Southern Economic Journal, vol. 53 (October 1986), 525–528.
Carroll, 1983, p. 508.
For example, George E. Johnson and Kenwood C. Youmans, “Union Relative Wage Effects by Age and Education,”Industrial and Labor Relations Review, vol. 24 (January 1971), 171–179; Michael J. Boskin, “Unions and Relative Real Wages,”American Economic Review, vol. 62 (June 1972), 466–472; Ronald L. Oaxaca, “Estimation of Union/Nonunion Wage Differentials Within Occupational/Regional Subgroups,”Journal of Human Resources, vol. 10 (Fall 1975), 529–537.
Orley Arshenfelter, “Racial Discrimination and Trade Unionism,”Journal of Political Economy, vol. 80 (May/June 1972), 435–464.
Duane E. Leigh, “Racial Discrimination and Labor Unions: Evidence From the NLS Sample of Middled Aged Men,”Journal of Human Resources, vol. 13 (Fall 1978), 568–577.
Carroll, 1983, p. 499.
Carroll, 1983.
Employment rates were constructed for each cohort as follows: Employed/Population. Population figures are used in the denominator instead of labor force participation statistics to control for individuals entering the work force in response to institutional variation. Refer to William A. Darity Jr., and Samuel L. Myers, Jr., “Changes in Black-White Income Inequality, 1968–1978: A Decade of Progress?”Review of Black Political Economy, vol. 10 (Summer 1980), 354–379.
McCrone, op. cit. and Lonnie K. Stevens, Charles Register, and Paul Grimes, “Civil Rights Legislation and Racial Employment Differentials,”Review of Black Political Economy, vol. 13 (Winter 1984–85), 49-59.
The employment rate ratios are constructed from data found inGeographic Employment and Unemployment, 1984, U.S. Department of Labor, Bureau of Labor Statistics, Bulletin 2234. TSW statistics come fromEmployment and Wages Annual Averages, 1984 U.S. Department of Labor, Bureau of Labor Statistics, Bulletin 2249. WEL figures are reported inStale Government Finances in 1984, U.S. Department of Commerce, Bureau of the Census, Report GF84N03. Education data are found inCurrent Population Reports, U.S. Department of Commerce, Bureau of the Census, Series P-20, various issues.
Due to the specification of the model’s dependent variable (ER = Employment/ Population) it would be econometrically incorrect to utilize a per capita measure of wages (Total Wages/Population) as an independent regressor. Thus, the total wage bill for each state was used to avoid regressing the dependent variable on a factor of itself.
Lonnie K. Stevans, Charles Register, and Paul Grimes, “Race and the Discouraged Female Worker: A Question of Labor Force Attachment,”Review of Black Political Economy, vol. 14 (Summer 1985), 89–97.
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Grimes, P.W. Right-to-work legislation and the economic position of black workers. Rev Black Polit Econ 15, 79–88 (1987). https://doi.org/10.1007/BF02903731
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DOI: https://doi.org/10.1007/BF02903731