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.

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

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

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

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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.

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Arthur C.
Brooks
  • Arthur C. Brooks is president of the American Enterprise Institute (AEI). He is also the Beth and Ravenel Curry Scholar in Free Enterprise at AEI.

    Immediately before joining AEI, Brooks was the Louis A. Bantle Professor of Business and Government at Syracuse University, where he taught economics and social entrepreneurship.

    Brooks is the author of 10 books and hundreds of articles on topics including the role of government, fairness, economic opportunity, happiness, and the morality of free enterprise. His latest book, “The Road to Freedom: How to Win the Fight for Free Enterprise” (2012) was a New York Times bestseller. Among his earlier books are “Gross National Happiness” (2008), “Social Entrepreneurship” (2008), and “Who Really Cares” (2006). Before pursuing his work in public policy, Brooks spent 12 years as a classical musician in the United States and Spain.

    Brooks is a frequent guest on national television and radio talk shows and has been published widely in publications including The New York Times, The Wall Street Journal, and The Washington Post.

    Brooks has a Ph.D. and an M.Phil. in policy analysis from RAND Graduate School. He also holds an M.A. in economics from Florida Atlantic University and a B.A. in economics from Thomas Edison State College.


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