Idaho 30 Years After Anti-Union Law

Here’s a look at Idaho 30 years after a sweeping anti-union law passed.

Some new business showed up while working families endure low wages. This sentence jumps out of this Post-Register report:

“One reason why Idaho leads the nation in the percentage of workers earning minimum wage is because there is no significant lobbying force on behalf of workers.”

That’s not entirely true. Idaho workers have strong advocates in the Labor Movement. But they were hurt by the law–that was the point.

You know who does have a “significant lobbying force” in Idaho? Big businesses like the private prison industry, like big tobacco, big pharma, big for-profit education, big payday lenders … big whatever and most likely from some other state or country.

That same bunch made up the staff and the treasury of Gov. Butch Otter’s 2014 campaign. That’s the same bunch who has sucked millions of tax dollars out of Idaho’s schools and roads.

Remember just over a month ago when Gov. Otter was promising to make education and high-paying jobs his highest priority … for families? Well, his first move out of the chute was to declare his desire to pay back those lobbyist with a tax gift while hiking taxes on families … particularly in rural Idaho. That’s what all those school levies are in 94 out of 115 school districts; they are tax hikes on families to pay for gifts to the wealthy.

It’s big business and big smiles hiding big broken promises. 

Idaho Democrats stand for rewarding businesses that contribute their fair share to the communities that partner with them thrive and prosper. We stand for real, two-sided partnerships. We stand for fair, livable wages. We stand for families. Idaho Democrats believe that when families succeed, that’s good business for Idaho.

Unions in Idaho: Economic fallout of right-to-work easy to measure
The state’s anti-union bill led to lower wages and benefits, even as job creation was solid.

By BRYAN CLARK | Post Register | Dec. 14, 2014

When Idaho’s right-to-work law was passed 30 years ago, its backers promised it would bring a “great influx” of new businesses.

Unions said it would mean worse pay and benefits for workers.

Both predictions have proved at least partially correct.

The law bars making union membership a condition of employment. After right-to-work passed, wages in the state became more stagnant than before the law was enacted, and employer contributions to employee benefits grew at a fraction of the pace they had previously.

On the other hand, job creation picked up. In manufacturing, where unions took the biggest hit, total employment began increasing at a more rapid rate than it had before right-to-work.

Evidence is strong, however, that the law has held down wages in Idaho. Income in the state grew much more slowly after passage of the measure, according to Bureau of Economic Analysis data.

Between 1985 and 2013, per-capita personal income grew about 40 percent, adjusted for inflation. But in the 28 years before right-to-work, it grew 67 percent.

And in terms of benefits, the change was even more dramatic.

From 1957 to 1985, total employer contributions to private pensions, insurance, unemployment and other benefits grew by more than 400 percent, adjusted for inflation. Between 1985 and 2013, those contributions grew only 60 percent.

WAGE STRUGGLE

National comparisons have found the same pattern: right-to-work means lower wages and fewer benefits in states that have such a law.

A 2011 study by the Economic Policy Institute, after factoring in a broad range of variables, found that wages in right-to-work states were 3.2 percent lower than in those without the law. The study also found a 2.6 percent lower rate of employer-sponsored health insurance and a 4.8 percent lower rate of employer-sponsored pensions.

Unions are simply better able to get raises for their workers than workers can on their own, Idaho AFL-CIO President Aaron White said.

“When you have partners at the table, you don’t have a situation where one individual is trying to squeak out an increase,” he said.

It is naturally easier for an employer to shoot down individual employees than to oppose them en masse, White said.

The Economic Policy Institute study found that right-to-work pushed down wages and benefits for union and nonunion workers alike.

“Our results suggest that proposals to advance (right-to-work) laws likely come at the expense of workers’ wages and benefits, both within and outside of unions,” the authors wrote.

Constitutional scholar and political analyst David Adler, of Boise State University, said that’s because unions traditionally advocate policies that boost pay, protections and benefits for all workers, not just their members.

“One reason why Idaho leads the nation in the percentage of workers earning minimum wage is because there is no significant lobbying force on behalf of workers,” he said.

JOB GROWTH

Studies also have tended to find that unemployment is somewhat lower in states with right-to-work laws. The Economic Policy Institute’s study found that unemployment was on average 1 percent higher in states without any right-to-work laws.

In January 1985, when Idaho’s right-to-work law passed, the state had a slightly higher unemployment rate than the rest of the nation. By 1989, Idaho’s unemployment rate had fallen below the national average, and it has largely stayed there, except for a period between 1997 and 2001, when the tech bubble drove U.S. unemployment to its lowest point since the late 1960s.

And job growth did exist after passage of the law, according to Bureau of Economic Analysis data.

Between 1969, the first year for which data is available, and 1985, the total number of jobs in Idaho grew by an average of 3 percent per year. Between 1985 and 2001, the annual job growth rate increased to 4 percent.

Former Sen. Dane Watkins, of Idaho Falls, who sponsored the bill on the Senate floor, said that means the measure has been successful, regardless of what wages and benefits are.

“It was very beneficial to the state to have that legislation passed,” he said. “It has helped to get jobs to Idaho. We have to be competitive with other states, and I think it’s part of the package we had to have.

“This was part of the package we could offer our industries here in Idaho, plus any industries that want to come to Idaho.”

In particular, total employment in Idaho’s manufacturing sector appears to have grown more quickly after the law was passed. Between 1975 and 1986, the sector saw annual growth of less than 1 percent, according to a 2002 study by Federal Reserve Bank of St. Louis economists. But between 1987 and 1996, the number of manufacturing jobs grew by almost 4 percent annually.

That’s also the sector that saw the biggest drop in unionization. In 1985, 23 percent were covered by union contracts. In 2013, the number wasn’t even 6 percent.

At the time of the bill, legislators said many businesses wouldn’t consider moving to states without right-to-work laws, according to Post Register reports.

“It can help create jobs,” Watkins said. “We’ve got to stay competitive with our wages and salaries. … We’ve been able to attract businesses because of this. We wanted to stay competitive with other states.”

Proponents of right-to-work laws say more employers have chosen to locate to Idaho rather than to nearby states without right-to-work, where they would have to pay higher wages and provide more benefits.

SOCIAL COSTS

The fall of unions in Idaho has changed the political and economic makeup of the state, Adler said.

“In many ways the values and views of average, everyday Idahoans have lost a vocal champion, and you see this resulting in the policies that have been created in the Gem State,” he said. “The state as a whole has become more friendly to employers and less friendly as a whole to ordinary workers. That’s why you see so many Idahoans working two jobs. The wages they are making are not livable.”

There are considerable social costs that come with the prevalence of low-wage jobs in Idaho, Adler said.

“We are far beyond the days now when one parent might work and the other parent might stay home and raise the children,” Adler said. “From a family values viewpoint, the right-to-work law has undercut that possibility.”

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