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Indiana Adopts Anti-Union “Right to Work” Bill. What about Canada?

If you could receive all of the government’s services–health care, education, roads, garbage collection–without  paying taxes, would you voluntarily pay taxes?

If you could receive all the benefits of collective bargaining–higher wages, better health and pension benefits, free legal representation if you are disciplined or dismissed–without having to pay any union dues, would you voluntarily pay union dues?

This is the question involved in Indiana this week, where the government seems poised to pass a package of legal reforms the Americans like to call “Right to Work” laws.  That’s a nice name, but the laws have nothing to do with a “right to work”.  The laws prohibit collective agreement clauses that require every employee who receives the benefit of a collective agreement and receives union representation to pay union dues.  The result is that paying union dues becomes a voluntary measure, which makes it very difficult for unions to collect the funds they need to hire lawyers, organizers, economists, pension experts, et cetera.

Here is an earlier draft of the Indiana legislation.  I’m not sure if revisions were made to the final version.  The key operative sections say this:

Sec. 8. A person may not require an individual to:
(1) become or remain a member of a labor organization;
(2) pay dues, fees, assessments, or other charges of any kind or amount to a labor organization; or
(3) pay to a charity or third party an amount that is equivalent to or a pro rata part of dues, fees, assessments, or other charges required of members of a labor organization;
as a condition of employment or continuation of employment.

Sec. 9. A contract, agreement, understanding, or practice, written or oral, express or implied, between:
(1) a labor organization; and
(2) an employer;
that violates section 8 of this chapter is unlawful and void.

Indiana becomes the first state in over a decade to introduce this anti-union law.  Here is a chart of the states that have the laws, and the date they introduced them:

The entire point of this type of legislation is to cut off resources from unions so that they become weak and ineffective.  Proponents argue that it creates jobs, on the theory that there are a bunch of antiunion employers who will flock to whatever state passes the law.  That is what Indiana Republicans are promising.  Opponents dispute that claim, and argue that all it does it allow employers in those states to pay workers less and give them fewer health and pension benefits.  They claim it is part of the race to the bottom that corporations encourage and that Republicans politicians are more than happy to implement in exchange for the huge political contributions to their campaigns.

In fact, there is no persuasive evidence to prove either side correct.  As is often the case when stats are used in workplace law debates, you can find “evidence” to support whatever position you feel like supporting.  There are dozens of studies “showing” that “right to work” laws decrease wages and benefits and have no positive effect on employment levels (e.g. Economic Policy Institute) , and dozens showing the exact opposite (see the corporate-funded National Right to Work studies).   You can usually predict what the outcome of the ‘independent’ study will be by looking at the ideological bent of the authors.

Thus, it should surprise nobody that Canada’s own corporate lobby voice, The Fraser Institute does its own studies that “prove”–Surprise!-that a Right to Work law in Canada would solve Canada’s economic ills.  It’s all utterly incompressible, value-laden, voodoo statistics, in my opinion.  I can’t make any sense of it, and I can guarantee you that no politician can. Just ask yourself why the right to work states don’t all have booming manufacturing sectors and extremely low unemployment if simply making it harder for unions to collect dues attracts investment like a moth to a flame.  Some of these states are among the most depressed in the U.S.   But the fact that the evidence confirms nothing about the effects of these antiunion laws doesn’t stop politicians (and other advocates of laws that undermine collective bargaining) from making grandiose claims about how the studies support this position or that.

If you don’t like collective bargaining, you will like a law that makes it difficult for unions to collect dues; if you think collective bargaining benefits society, you will be against the law.  It is a completely ideological argument, not an economic one.

In Canada, we have followed the Rand Formula for decades, which says that a union can bargain a clause requiring everyone covered by a collective agreement to pay an equal share of the dues that pay for the union’s services.  In Ontario, the law that permits this is found in Section 47 of the Labour Relations Act. In exchange for paying dues, the law imposes a duty of fair representation on unions to represent everyone that is paying dues, even those people who hate the union and have not become members (Section 74).  The U.S. laws turn this basic tradeoff on its head:  workers don’t have to pay dues, but the union still has a legal duty to represent everyone the same.

While there are always rapid antiunion groups like The Fraser Institute arguing that somehow this is unfair, no political party, not even the Conservatives, have to date seriously considered banning mandatory dues contract clauses.    However, watch carefully for that rhetoric to begin from folks like Tim Hudak (Ontario Conservatives) and maybe even Lisa Raitt (Federal MOL) if Caterpillar in London decides down the road to move the work from London to Indiana (which many think is the plan), where they already have a factory full of dirt cheap employees.  Wanna bet some politician will claim that the move was due to our “labour laws” and the Rand Formula in particular?

If the Tories take up the argument in favour of banning mandatory union dues, would you support them?  Why or why not?


10 Responses to Indiana Adopts Anti-Union “Right to Work” Bill. What about Canada?

  1. Don Jordan Reply

    January 26, 2012 at 3:59 pm

    The wisdom of the Rand Formula is beyond debate. There should not be “free riders” in a unionized workplace. However ,in Canada, we permit union’s to negotiate and rely on more stringent union security clauses, beyond the requirements of the Rand Formula. These clauses require mandatory union membership in order to maintain your employment. It’s one thing to say that fairness requires that all employees to contribute to the cost of negotiating terms they all benefit from. It’s quite another to say you must join the Union and assume obligations under its Constitution you do not agree with.I hope you have you students read Justice Rand’s Arbitration Award setting out the philosophical basis of his approach to union security clauses.

    • Doorey Reply

      January 26, 2012 at 4:11 pm

      Thanks Don. I don’t disagree with you on that. Do you still see a lot of closed shops in B.C.? I suspect they are not very common in Ontario, except perhaps in the construction industry.

  2. Bob Barnetson Reply

    January 26, 2012 at 7:02 pm

    In Alberta, construction would be the majority of closed-shop workplaces. In the 1990s, Alberta studied right to work but eventually decided against proceeding. I don’t image this is high on the list of government priorities at present given the labour movement is relatively weak and compliant.

  3. Don Jordan Reply

    January 26, 2012 at 9:46 pm

    “Closed Shops” (where you must be a Union member to apply for work) are still dominant in the Constructio,Film & Longshore industries in B.C. “Union Shops” (where you must join and maintain mebership after you are hired) are by far the more pervasive form of union security. In fact , in the direct provincial government public sectoe , all employees must ,by statute become and remain union members . So ,if you object to forced association , B.C. is not the place for you. You cannot even work for the govenment you pay taxes to if you object to forced association.

  4. Jason Reply

    January 27, 2012 at 9:30 am

    Living in Canada also forces you to be in an association as well. The association of Taxpayers. So if you object to that forced association you have two choices:

    1. Leave Canada
    2. Form a Corporation

  5. Elizabeth Reply

    January 30, 2012 at 2:51 am

    Approaching this issue from another angle, I have to say that if Unions in Canada were more open and transparent (a tired but appropriate term) with unionized employees on their activities and finances this wouldn’t be a danger to them in my opinion.

    I can only hope they take this into consideration as a positive solution.

    Employees, employers AND unions have lost sight of the reasons why unions exist, and what their core purpose is. That state has led to ‘right to work’ more than anything else, and that is where a solution lies.

  6. Paulo Ribeiro Reply

    February 15, 2012 at 6:30 pm

    This old argument about Union’s transparency is a bag full of nothing. One more myth invented by the stream media to undermine Unions. We also have full access to the Union’s fincances, all you have to do is attend the membership meeting or request access to financial statements and reports. The State of Indiana is shaefully attempting to destroy the Union and bring the standard of living of workers to a even lower level. Many times workers are they worse enemies for buying into this propaganda machine and shoothing themselves in the foot. Imagine a world without Unions, imagine Canada or the USA without Unions. Do you think that is pure conicidence the fact that the most developed world is also the part of the world with the strongest Unions?? Think about it!

  7. anon Reply

    February 15, 2012 at 7:41 pm

    The fact that Canadian factories no longer have to go all the way to Mexico or China when they shut down is a pretty scary sign about the state of the US economy. Unions preserve the middle class by forcing employers to pay higher wages and this is a trend we’ve watched decline steadily as union membership shrinks. I think blue collar poverty will be the norm in the next 20 years.

  8. Steve Jelly Reply

    September 3, 2013 at 11:55 pm

    Any idea when this was written – post says 9/03/2013, but cites @lraitt as Lab/Min when @KellieLeitchMP is the current Lab/Min. Kind of important given the commentary in the last para.

    • admin Reply

      September 4, 2013 at 3:51 pm

      Steve, the post was written in January 2012.

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