[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
COMPULSORY UNIONIZATION THROUGH GRIEVANCE FEES:
THE NLRB'S ASSAULT ON RIGHT TO WORK
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON EDUCATION
AND THE WORKFORCE
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD IN WASHINGTON, DC, JUNE 3, 2015
__________
Serial No. 114-17
__________
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COMMITTEE ON EDUCATION AND THE WORKFORCE
JOHN KLINE, Minnesota, Chairman
Joe Wilson, South Carolina Robert C. ``Bobby'' Scott,
Virginia Foxx, North Carolina Virginia
Duncan Hunter, California Ranking Member
David P. Roe, Tennessee Ruben Hinojosa, Texas
Glenn Thompson, Pennsylvania Susan A. Davis, California
Tim Walberg, Michigan Raul M. Grijalva, Arizona
Matt Salmon, Arizona Joe Courtney, Connecticut
Brett Guthrie, Kentucky Marcia L. Fudge, Ohio
Todd Rokita, Indiana Jared Polis, Colorado
Lou Barletta, Pennsylvania Gregorio Kilili Camacho Sablan,
Joseph J. Heck, Nevada Northern Mariana Islands
Luke Messer, Indiana Frederica S. Wilson, Florida
Bradley Byrne, Alabama Suzanne Bonamici, Oregon
David Brat, Virginia Mark Pocan, Wisconsin
Buddy Carter, Georgia Mark Takano, California
Michael D. Bishop, Michigan Hakeem S. Jeffries, New York
Glenn Grothman, Wisconsin Katherine M. Clark, Massachusetts
Steve Russell, Oklahoma Alma S. Adams, North Carolina
Carlos Curbelo, Florida Mark DeSaulnier, California
Elise Stefanik, New York
Rick Allen, Georgia
Juliane Sullivan, Staff Director
Denise Forte, Minority Staff Director
C O N T E N T S
----------
Page
Hearing held on June 3, 2015..................................... 1
Statement of Members:
Kline, Hon. John, Chairman, Committee on Education and the
Workforce.................................................. 1
Prepared statement of.................................... 3
Scott, Hon. Robert C. ``Bobby,'' Ranking Member, Committee on
Education and the Workforce................................ 4
Prepared statement of.................................... 9
Statement of Witnesses:
Bruno, Robert, Dr., Professor, School of Labor and Employment
Relations, University of Chicago Illinois, Chicago, IL..... 25
Prepared statement of.................................... 27
Gould, Elise, Dr., Senior Economist and Director of Health
Policy Research, Economic Policy Institute, Washington, DC. 42
Prepared statement of.................................... 44
Hewitt, Walter, Mr., Management Information Systems Director,
United Way of Southeastern Connecticut, Uncasville, CN..... 18
Prepared statement of.................................... 20
Mix, Mark, Mr., President, National Right to Work Committee,
Springfield, VA............................................ 65
Prepared statement of.................................... 67
Ricketts, Hon. Pete, Governor, State of Nebraska, Lincoln, NE 11
Prepared statement of.................................... 14
Additional Submissions:
Mr. Bruno:
Research Report: Free-Rider States dated September 2,
2014................................................... 132
Mr. Hewitt:
Addenda to Testimony..................................... 164
Tally of Ballots - UD Election........................... 166
Letter of Concern from the Southeastern Connecticut
Central Labor Council.................................. 164
Jeffries, Hon. Hakeem S., a Representative in Congress from
the State of New York:
Table 709, Individuals and Families Below Poverty Level
and by Rate to State................................... 120
Pocan, Hon. Mark, a Representative in Congress from the State
of Wisconsin:
Wisconsin Contractors Coalition, Business Members........ 86
Mr. Scott:
Dimished Collective Bargaining Coverage Means Higher Wage
Inequality Across 32 Countries......................... 8
Workers Produced Much More, but Typical Workers' Pay
Lagged Far Behind...................................... 6
COMPULSORY UNIONIZATION THROUGH GRIEVANCE FEES:
THE NLRB'S ASSAULT ON RIGHT-TO-WORK
----------
Wednesday, June 3, 2015
House of Representatives
Committee on Education and the Workforce
Washington, D.C.
----------
The Committee met, pursuant to call, at 10:02 a.m., in room
2175, Rayburn House Office Building, Hon. John Kline [chairman
of the committee] presiding.
Present: Representatives Kline, Wilson, Foxx, Thompson,
Walberg, Salmon, Rokita, Messer, Byrne, Brat, Carter, Bishop,
Grothman, Curbelo, Stefanik, Allen, Scott, Hinojosa, Grijalva,
Courtney, Fudge, Polis, Sablan, Wilson, Bonamici, Pocan,
Takano, Jeffries, Clark, and DeSaulnier.
Staff present: Lauren Aronson, Press Secretary; Janelle
Belland, Coalitions and Members Services Coordinator; Ed
Gilroy, Director of Workforce Policy; Callie Harman, Staff
Assistant; Tyler Hernandez, Press Secretary; Marvin Kaplan,
Workforce Policy Counsel; Nancy Locke, Chief Clerk; John
Martin, Professional Staff Member; Zachary McHenry, Legislative
Assistant; Daniel Murner, Deputy Press Secretary; Brian Newell,
Communications Director; Krisann Pearce, General Counsel;
Alissa Strawcutter, Deputy Clerk; Juliane Sullivan, Staff
Director; Alexa Turner, Legislative Assistant; Tylease Alli,
Minority Clerk/Intern and Fellow Coordinator; Austin Barbera,
Minority Staff Assistant; Amy Cocuzza, Minority Labor Detailee;
Denise Forte, Minority Staff Director; Christine Godinez,
Minority Staff Assistant; Carolyn Hughes, Minority Senior Labor
Policy Advisor; Kendra Isaacson, Minority Labor Policy
Detailee; Brian Kennedy, Minority General Counsel; Kevin
McDermott, Minority Senior Labor Policy Advisor; Richard
Miller, Minority Senior Labor Policy Advisor; Amy Peake,
Minority Labor Policy Advisor; Veronique Pluviose, Minority
Civil Rights Counsel; Dillon Taylor, Minority Labor Policy
Fellow.
Chairman Kline. A quorum being present, the Committee on
Education and the Workforce will come to order.
Good morning. I would like to begin by extending a special
welcome to Governor Pete Ricketts. Governor, we are grateful to
you for taking time out of your schedule to join us as a
testament to the importance of this issue, and your dedication
to the people of your state.
We are here to discuss the latest in a series of actions by
the National Labor Relations Board, designed to empower big
labor at the expense of America's workers.
In recent years, the President's appointees at the NLRB
have undermined employee free choice through an ambush election
scheme, stifled employee freedom through micro unions, and
restricted employee access to secret ballot elections.
Now, the board is setting its sight on the freedom of
choice provided to employees under the state right-to-work
laws. In 1947, Congress passed a number of amendments to the
National Labor Relations Act. One of those amendments allowed
states to prohibit compulsory union membership. This important
policy, known as right-to-work, simply means union membership
cannot be a condition of employment and employees cannot be
required to pay union dues or fees.
Today, 25 states have enacted right-to-work laws, with
Indiana, Michigan, and Wisconsin recently joining the ranks.
Union leaders vigorously oppose right-to-work because it leads
to less control over workers and fewer dollars flowing to union
coffers. But this isn't about what is best for unions, it is
about what is best for workers.
Every worker has a fundamental right to decide whether or
not to join a union. Those who decide not to join a union
shouldn't be punished for that decision, especially when the
punishment denies a worker the chance to provide for his or her
family. That is why it is deeply troubling the Obama Labor
Board is trying to undermine a policy embraced by workers and
state leaders across the country.
In April, the Board requested public comment on whether it
should adopt a new rule permitting unions to charge nonunion
members grievance fees in right-to-work states. We have long
heard complaints from labor leaders about so-called ``free
riders''--the idea that workers who opt out of union
representation and associated fees still avail themselves of
the provisions laid out in the collective bargaining agreement.
When it comes to the grievance process, this argument is
deeply flawed for a simple reason: workers have no choice. The
grievance process is outlined in the collective bargaining
agreement, and even nonunion members are bound by its
requirements. There is no other recourse for nonunion members
to resolve grievances aside from the process stipulated in the
labor contract.
If we adopted Big Labor's logic, workers would be stuck
between a rock and a hard place. They would either have to pay
the union fee or forfeit any opportunity to resolve grievances
with their employers. That is not what Congress intended nearly
70 years ago, and it is not what Congress intends today.
Despite the complaints of labor leaders, current policies
governing grievance fees have been board precedent for decades
and have been upheld in federal court. These policies shouldn't
be discarded by an unelected and unaccountable board of
bureaucrats.
For those who would argue we are getting ahead of
ourselves, I would simply note that we have been down this road
before. The board has a track record of seizing routine cases
as a means to impose sweeping changes on our nation's
workplaces. We have no reason to believe this case will be any
different, and America's workers are once again expected to pay
the price.
Right-to-work is an important tool for state leaders trying
to attract new businesses and good-paying jobs. Employers at
home and abroad are increasingly drawn to right-to-work states.
No doubt, Governor Ricketts will explain for us why that
continues to be true. Working families win when companies like
Volvo, BMW, and Volkswagen build factories here in the United
States. With millions of Americans searching for full-time
work, why would we discourage that kind of investment in our
nation's workers?
Just as importantly, why would we accept a policy that
undermines the right of workers to decide whether or not they
want to join a union? The board needs to pull back and leave
employees in right-to-work states alone.
Before closing, I want to make a brief comment about our
witness panel. Staff received word late last night that one of
our intended witnesses had expressed publicly a number of
offensive views. The views expressed by this individual do not
reflect the views of this committee or its members, and that is
why the committee withdrew the invitation for this individual
to testify. It is regrettable this occurred, and we look
forward to a productive hearing on the important issue at hand.
With that, I will now recognize Ranking Member Scott for
his opening remarks.
[The statement of Chairman Kline follows:]
Prepared Statement of Hon. John Kline, Chairman
Committee on Education and the Workforce
Good morning. I'd like to begin by extending a special welcome to
Governor Pete Ricketts. Governor, we are grateful to you for taking
time out of your busy schedule to join us; it is a testament to the
importance of this issue and your dedication to the people of your
state.
We are here to discuss the latest in a series of actions by the
National Labor Relations Board designed to empower Big Labor at the
expense of America's workers. In recent years, the president's
appointees at the NLRB have undermined employee free choice through an
ambush election scheme, stifled employee freedom through micro-unions,
and restricted employee access to secret ballot union elections. Now
the board is setting its sights on the freedom and choice provided to
employees under state right to work laws.
In 1947, Congress passed a number of amendments to the National
Labor Relations Act. One of those amendments allowed states to prohibit
compulsory union membership. This important policy, known as ``right to
work,'' simply means union membership cannot be a condition of
employment and employees cannot be required to pay union dues or fees.
Today, twenty-five states have enacted right to work laws, with
Indiana, Michigan, and Wisconsin recently joining the ranks.
Union leaders vigorously oppose right to work because it leads to
less control over workers and fewer dollars flowing to union coffers.
But this isn't about what's best for unions; it's about what's best for
workers. Every worker has a fundamental right to decide whether or not
to join a union. Those who decide not to join a union shouldn't be
punished for that decision, especially when the punishment denies a
worker the chance to provide for his or her family. That is why it is
deeply troubling the Obama labor board is trying to undermine a policy
embraced by workers and state leaders across the country.
In April, the board requested public comment on whether it should
adopt a new rule permitting unions to charge nonunion members grievance
fees in right to work states. We have long heard complaints from labor
leaders about so-called ``free riders,'' the idea that workers who opt
out of union representation and associated fees still avail themselves
of the provisions laid out in the collective bargaining agreement.
When it comes to the grievance process, this argument is deeply
flawed for a simple reason: workers have no choice. The grievance
process is outlined in the collective bargaining agreement and, even
nonunion members are bound by its requirements. There is no other
recourse for nonunion members to resolve grievances aside from the
process stipulated in the labor contract.
If we adopted Big Labor's logic, workers would be stuck between a
rock and a hard place; they would either have to pay the union fee or
forfeit any opportunity to resolve grievances with their employers.
That is not what Congress intended nearly 70 years ago and it is not
what Congress intends today. Despite the complaints of labor leaders,
current policies governing grievance fees have been board precedent for
decades and have even been upheld in federal court. These policies
shouldn't be discarded by an unelected and unaccountable board of
bureaucrats.
For those who would argue we are getting ahead of ourselves, I
would simply note that we have been down this road before. The board
has a track record of seizing routine cases as a means to impose
sweeping changes on our nation's workplaces. We have no reason to
believe this case will be any different, and America's workers are once
again expected to pay the price.
Right to work is an important tool for state leaders trying to
attract new businesses and good-paying jobs. Employers at home and
abroad are increasingly drawn to right to work states. No doubt
Governor Ricketts will explain for us why that continues to be true.
Working families win when companies like Volvo, BMW, and Volkswagen
build factories here in the United States. With millions of Americans
searching for full-time work, why would we discourage that kind of
investment in our nation's workers?
Just as importantly, why would we accept a policy that undermines
the right of workers to decide whether or not they want to join a
union? The board needs to pull back and leave employees in right to
work states alone.
Before closing, I want to make a brief comment about our witness
panel. Staff received word late last night that one of our intended
witnesses has expressed publicly a number of offensive views. The views
expressed by this individual do not reflect the views of this committee
or its members, and that is why the committee withdrew the invitation
for this individual to testify. It is regrettable this occurred, and we
look forward to a productive hearing on the important issue at hand.
With that, I will now recognize Ranking Member Scott for his
opening remarks.
______
Mr. Scott. Thank you, Mr. Chairman. And Mr. Chairman, on
that last remark, I appreciate that could happen to anyone. And
I am delighted that you took the action you took.
Mr. Chairman, the title of today's hearing, ``Compulsory
Unionization through Grievance Fees: The NLRB's Assault on
Right-to-Work'' fundamentally distorts the legal issues in a
pending appeal before the NLRB. That appeal has to do with
whether a union may charge a nonmember a fee to process a
grievance when they request the union's assistance. The NLRB
has solicited amicus briefs, but has not acted. Regardless, the
case doesn't have anything to do with the right-to-work laws. I
think we ought to let the NLRB process go forward, in any case.
I represent a district in Virginia, which is a right-to-
work state and has been since 1947. That means that workers who
are employed at a unionized workplace in Virginia cannot be
required to pay union fees as a ``condition of employment.''
However, this hearing does give us an opportunity to
highlight serious policy questions beyond the narrow issue of
grievance fees, such as whether the vast majority of workers
are better off with stronger or weaker union representation.
Congress passed the Taft-Hartley Act in 1947 that allows
states to pass these right-to-work laws that allow workers to
get all of the benefits of union representation without the
responsibility of paying anything for it.
Over the last 58 years, state legislators have passed so-
called right-to-work laws in 25 states. Since unions have the
duty of fair representation to represent members and nonmembers
alike, they are obligated to incur the costs of representing
free riders, who are not paying union dues, and it forces
actual members to pay higher dues to cover the expenses of the
free riders, which creates a further disincentive to be a union
member.
When a grievance goes to arbitration, the cost to the union
can often exceed $5,000 a case, an expense that dues-paying
members must shoulder if the grievance is brought by a
nonmember.
Again, this isn't a discussion about the right to work. It
is a question of whether one desires a stronger or weaker union
movement. The economic research is clear, stronger unions are
better than weaker unions for building and sustaining a strong
middle class. Stronger unions reduce wage inequality and help
ensure that the increased wealth generated by growing
productivity is fairly shared by the workers.
Falling union participation exacerbates the troubling
economic conditions we are seeing today: stagnant wages and
extreme levels of inequality in wealth and income. And this
chart shows part of the problem. It shows from 1948 to 1973, as
productivity grew 97 percent, wages went up 91 percent. But
since 1973, worker output has soared another 74 percent, but
income--but the hourly wages have gone up only 9 percent.
[Additional submission by Mr. Scott follows:]
[GRAPHIC] [TIFF OMITTED] T3704.028
Again, this sharp divergence can be seen on the chart. And,
coinciding with that divergence, there has been a reduction in
union participation.
Strong unions are needed to help close the gap between
wages and productivity growth and to reduce inequality. The
International Labor Organization recently evaluated wage
inequality in 32 countries. And this chart shows that those
with stronger union representation have less inequality; those
with less union participation, like the United States, have
extremely high levels of inequality.
[Additional submission by Mr. Scott follows:]
[GRAPHIC] [TIFF OMITTED] T4824.114
The ILO's data illustrates a remarkably consistent
relationship: low levels of collective bargaining coverage
associated with high levels of inequality.
So, Mr. Chairman, I don't expect us to agree today on the
value of strong labor unions. But, reconsideration of the case
law regarding grievance frees is not an overreach.
I would note that it was a Republican NLRB chairwoman,
Betty Murphy, who issued a concurring opinion in a 1976 case
declaring that non-discriminatory grievance fees may well be
permissible without running afoul of the National Labor
Relations Act. In an opinion involving a Virginia mechanical
parts manufacturer, she stated ``a bargaining representative
requiring a payment of a reasonable fee for all employees for
processing a grievance imposed on members and nonmembers alike
cannot be discriminatory treatment of either group, and such a
fee paid by nonmembers on the same basis cannot be unlawful.''
I would caution the committee that we should respect the
adjudicative process that is now underway before criticizing
the NLRB's decision to simply ask for more input by soliciting
amicus briefs. So rather than rushing into judgment on the
nuances of this case, we should allow the NLRB to deliberate
and render an opinion. Briefs are not even due until mid-July.
And if the NLRB issues a decision that the parties feel is
unlawful, they can obviously appeal.
I would like to thank the witnesses for being here today,
particularly those who had to travel a long way. And I look
forward to their testimony.
Yield back.
[The statement of Mr. Scott follows:]
Prepared Statement of Hon. Robert C. ``Bobby'' Scott, Ranking Member
Committee on Education and the Workforce
Mr. Chairman, the title of today's hearing ``Compulsory
Unionization through Grievance Fees: The NLRB's Assault on Right-to-
Work,'' fundamentally distorts the legal issues in a pending appeal
before the National Labor Relations Board. That appeal has to do with
whether a union may charge a non-member a fee to process a grievance
when they request the union's assistance. The NLRB has solicited amicus
briefs, but has not yet acted. Regardless, the case has nothing to do
with so-called right-to-work laws.
I represent a District in Virginia, which is a right-to-work state
and has been since 1947. That means that workers who are employed at a
unionized workplace in Virginia cannot be required to pay union fees as
a ``condition of employment.''
No matter how the NLRB rules in the grievance fee case, Virginia
will remain a right-to-work state. This case has nothing to do with
whether a worker must join a union or pay an agency fee as condition of
employment. It is misleading to suggest that the policy issues in this
case are in any way related to the inflammatory title of this hearing.
However, this hearing does highlight serious policy questions
beyond the narrow issue of grievance fees, such as whether the vast
majority of workers are better off with a stronger or weaker union
movement. Congress passed the Taft Hartley Act in 1947--over President
Truman's veto--with the intent to weaken the finances of labor unions.
It allowed states to pass these right-to-work laws that allow workers
to get union representation without paying for it. It authorized states
to create a class of workers who can get something of real value for
nothing. While some refer to these individuals as free-riders, I call
them free-loaders.
Over the past 58 years, state legislators have passed so-called
right-to-work laws in 25 states. Since unions have a duty of fair
representation to represent members and non-members alike, the costs of
representing free riders weakens unions by draining their treasury.
Alternatively, it forces members to pay higher dues to cover the
expenses of the free riders, which creates further disincentive to be a
union member. When a grievance goes to arbitration, the cost, even if
split with the employer, runs the union upwards of $5,000 a case, an
expense that dues-paying members must shoulder if the grievance is
brought by a non-member. Again, any discussion of right-to-work is
really about whether one desires a stronger or a weaker union movement.
The economic research is clear--stronger unions are better than
weaker unions for building and sustaining a middle class. Stronger
unions reduce wage inequality and help ensure that the increased wealth
generated by growing productivity is fairly shared with the workers.
Falling union density exacerbates the troubling economic conditions we
have today in this country: stagnant wages and extreme levels of
inequality in income and wealth.
Show Chart A (EPI).
Part of the reason for growing inequality in our country is due to
workers' limited bargaining power to secure a fair share of the
increase in productivity, which is a measure of output per worker-hour.
The hourly compensation of a typical worker grew in tandem with
productivity from 1948 to 1973 , as productivity grew 97 percent
matched by a 91 percent increase in real hourly wages. That can be seen
in the Chart on the screen.
However, since 1973 output per worker hour has soared 74 percent,
while hourly compensation for the typical worker has increased only
nine percent. Again, this sharp divergence can be seen on the chart.
Coinciding with this divergence has been a reduction in union density.
Strong unions are needed to help close the gap between wages and
productivity growth, and to reduce inequality. The International Labor
Organization recently evaluated wage inequality in 32 countries. See
the chart on the screen.
Show Chart B (ILO)
The ILO found that those countries with collective bargaining
coverage rates under 15 percent, such as the United States and South
Korea, have extremely high levels of inequality.
By contrast, countries with as much as 95 percent collective
bargaining coverage, such as Belgium, Austria and Sweden, have far
lower rates of inequality.
The ILO's data illustrates a remarkably consistent relationship:
low levels of collective bargaining coverage are associated with high
levels of inequality.
Mr. Chairman, I don't expect us to agree today on the value of
strong labor unions, but reconsideration of the case law regarding
grievance fees is not an overreach.
I would note that it was a Republican NLRB Chairwoman, Betty
Murphy, who issued a concurring opinion in a 1976 case declaring that
non-discriminatory grievance fees may well be permissible without
running afoul of the National Labor Relations Act. In an opinion
involving a Virginia mechanical parts manufacturer, she stated:
``A bargaining representative requiring payment of a reasonable fee
for all employees for processing a grievance, imposed on members and
non-members alike, cannot be discriminatory treatment of either group,
and such a fee paid by non-members on the same basis cannot be
unlawful.''
I would caution that this Committee should respect the adjudicative
process that is now underway before criticizing the NLRB's decision to
simply seek more input by soliciting amicus briefs.
Rather than rushing to judgment on the nuances of this case, we
should allow the NLRB to deliberate and render an opinion on the
merits. Briefs are not even due until mid-July. And if the NLRB issues
a decision that the parties feel is unlawful, they can seek judicial
review in the Court of Appeals.
I would like to thank our witnesses for being here today,
particularly those who had to travel a long way, and look forward to
their testimony.
______
Chairman Kline. I thank the gentleman, however much we may
disagree.
Pursuant to committee rule 7(c), all members will be
permitted to submit written statements to be included in the
permanent hearing record. And without objection, the hearing
record will remain open for 14 days to allow such statements
and other extraneous material referenced during the hearing to
be submitted for the official hearing record.
I will now introduce our distinguished witnesses. The
Honorable Pete Ricketts is the Governor of Nebraska. Governor
Ricketts was sworn in as Nebraska's 40th governor on January
8th, 2015. Prior to his election as Governor, he worked to
support Nebraska entrepreneurs and start-up companies. He has
also previously held various leadership roles in TD Ameritrade.
Mr. Walter Hewitt is a director of technology with the
United Way of Southeast Connecticut in Gales Ferry,
Connecticut, and is testifying on his own behalf. Mr. Hewitt is
responsible for all information technology initiatives at
United Way of Southeast Connecticut. Prior to joining United
Way in 2007, Mr. Hewitt worked at TriVIN, CCEH, and Pfizer.
Dr. Robert Bruno is a professor at the University of
Illinois in Urbana-Champaign. Dr. Bruno is the director of the
labor education program, and his research focuses broadly on
working-class and union studies issues.
Dr. Elise Gould is a senior economist at the Economic
Policy Institute here in Washington, D.C. Her research areas
include wages, poverty, inequality, economic mobility, and
health care.
Mr. Mark Mix is President of the National Right-to-Work
Committee in Springfield, Virginia. Prior to joining National
Right-to-Work Committee in 1990, Mr. Mix worked for several
state level right-to-work groups.
I will now ask our witnesses to stand and to raise your
right hand.
[Witnesses sworn.]
Let the record reflect the witnesses answered in the
affirmative. You may be seated. I can't imagine the day when a
witness doesn't answer in the affirmative. But there we are.
Before I recognize you to provide your testimony, let me
once again briefly explain our lighting system. It is a little
antiquated, but it is pretty straightforward. You have five
minutes to present your testimony. And by the way, I have yet
to gavel down any witness who ran over in presenting their
testimony. But I would encourage you, please try to stay within
that, because we want to give all members the chance to
participate.
When you begin, the light in front of you will turn green.
When one minute is left, the light will turn yellow. And when
your time is expired, the light will turn red.
I will point out that I will be less forgiving for members
of the committee, as we will adhere to the five-minute rule.
I would now like to recognize Governor Ricketts.
TESTIMONY OF HON. PETE RICKETTS, GOVERNOR, STATE OF NEBRASKA,
LINCOLN, NEBRASKA
Governor Ricketts. Chairman Kline, Ranking Member Scott,
and members of the committee, I thank you for examining the new
and serious threat to state right-to-work laws from the
National Labor Relations Board.
Should the NLRB's threat be carried out, the board's
actions would seriously impair employees' personal freedom, the
economies of 25 states that have the right-to-work laws, and
the U.S. economy.
According to the Bureau of Labor statistics, Nebraska has
the lowest unemployment rate, at 2.5 percent. We know our
right-to-work laws present a competitive advantage for us and
contribute to this because it sends the right message to
employers and employees.
When I was president of Accutrade, a subsidiary of what is
now TD Ameritrade, we were looking to expand outside the state
and we were going to create several hundred jobs. One state,
Oklahoma, approached us. And when we found out they were not a
right-to-work state, we stopped the conversation. There wasn't
any point going further. We know that being a right-to-work
state is a competitive advantage in being able to attract
businesses and new jobs.
Last year, I was elected as governor of Nebraska. Nebraska
has a long history of defending freedom. In fact, in 1946,
Nebraska voted 60 percent to 40 percent to adopt a right-to-
work law prohibiting compulsory union membership. This was even
before Congress had passed the Taft-Hartley Act, reaffirming
the power of states to approve and enforce such laws.
Like the overwhelming majority of my constituents, I am a
strong supporter of the nearly seven decades of the right-to-
work provision in Nebraska's constitution. Along with other
like-minded Nebraskans, I will fight with determination against
any and all attempts by the Federal Government to undermine the
power of the states to protect employees within our borders and
forced union affiliation.
Now, the NLRB is threatening to undermine the power of the
states and impose fees on free people by board fiat. The board
would grant private sector union officials compulsory workplace
grievance privileges. The intended consequence will be to
undermine the right-to-work freedom currently granted by
Nebraska and 24 other states.
Requiring a nonmember to pay for a union's participation is
unreasonable and unfair. And it makes perfect sense that both
the courts and the NLRB have consistently barred organized
labor from charging nonmembers in right-to-work states to get
their grievances processed, when union members can have their
grievances processed for free.
But now the NLRB seems poised to do an about-face on its
own precedent going back to 1953. The NLRB's apparent eagerness
to suddenly give a green light to forced grievance fees is
especially disturbing to Nebraskans. Right-to-work supporters
in our state fought this battle over a decade ago and thought
we had won up until the spring when the NLRB made their
announcement.
Over 10 years ago, officers in the AFL-CIO had lobbied for
a bill called L.B. 230, which would be very similar to what the
NLRB is now proposing. L.B. 230 would have entitled organized
labor to charge agency fees to nonunion members and then
actually sue those workers who refused to pay it. Effectively,
you know, forcing them to accept the fees.
Supporters of this legislation managed to attach the
language of L.B. 230 into a high-priority workers' compensation
reform bill. But grassroots opponents, assisted by the National
Right-to-Work Committee, kept fighting back.
Finally, State Senator Adrian Smith, who I am happy to say
is a member of the U.S. House of Representatives today, vowed
he would lead a protracted fight to stop the workers' comp
reform bill if it came to the floor with the forced
unionization language still attached. In the end, the forced
grievance fees provision was not enacted.
Mr. Chairman, the battle that occurred in the early to mid-
2000s to defeat L.B. 230 in Nebraska was a classic example of
representative government in action. It is unfortunate and
would be a travesty if the NLRB would now choose to
bureaucratically override the will of the people. This is an
issue of precedence and State's rights. This is about the
people I represent, who respect the right to organize and
respect the right to decline.
Nebraska and 24 other states protect the rights of workers
to handle the grievances as they see fit. This is a proposal
that is a solution in search of a problem and would hurt
individual rights, employers, and continued economic growth.
Thank you very much for the opportunity to be here to
testify.
[The testimony of Governor Ricketts follows:]
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Chairman Kline. Thank you, Governor. And thank you for
staying within the five minutes. That is a good example.
Mr. Hewitt?
TESTIMONY OF MR. WALTER HEWITT, MANAGEMENT INFORMATION SYSTEMS
DIRECTOR, UNITED WAY OF SOUTHEASTERN CONNECTICUT, (TESTIFYING
ON OWN BEHALF), UNCASVILLE, CONNECTICUT
Mr. Hewitt. Chairman Kline, distinguished committee
members, thank you for providing me with this opportunity to
talk to you about the importance of right-to-work in the
workplace.
I want to start out by saying that I am not anti-union, in
spite of many of those assertions from various union members
after I agreed to come here today. Unfortunately, I do live in
a compulsory union state. By virtue of the fact that my
company, the United Way of Southeastern Connecticut has a
union, I am forced to be a union member, whether or not I wish
to be.
We have had certain issues recently which have convinced
us, the members, to do some research and determine what our
rights actually are. Luckily, we discovered that we do, in
fact, have the right to disassociate. Let me give you some
background about that.
Basically, during recent contract negotiations with the
OPEIU, our current union, our union officials, refused to bring
any issues to the table to talk to the employees at all about
what was presented to them, what issues were on the table, what
was being negotiated. Most infuriating to us was the fact that
the union representatives agreed to--and they claimed to--they
claimed that they agreed that management had encouraged them
and required them to keep a veil of secrecy and that no one
could present anything to the employees during this negotiating
process.
During this period, I stood up at a union meeting and noted
the employees' strong displeasure with the secret negotiating
process, which limited the union's ability to communicate with
membership. I stated my belief to the union officials that
failure to communicate with employees prevented them from
faithfully fulfilling their duty to represent us.
In addition, I asked that those officials would consider
signing a prospective document assuring that never again would
they agree to any such process that would limit their ability
to communicate with membership. The union, unfortunately,
declined to make any such pledge.
Our members--many members stood up and agreed with me and
noted their own displeasure with the entire negotiating
process. Employees expressed frustration with the way the union
officials were treating employees and had treated us for many
years. Employees who dared to question the union were treated
extremely rudely at this and other meetings.
We were, quite frankly, amazed that it is possible that
this union tasked with representing this body of people would
speak to us in such a rude fashion and treat our collective
requests with such wanton disregard. It was the way that the
members were treated during those meetings that convinced me
and my associates to disassociate from the union's actions.
Long-standing members of our union were belittled and verbally
abused for simply speaking up.
The first impulse I and other members had was to drop the
union altogether and negotiate directly as individuals or find
another union, perhaps. But we learned--and a simple Google
search allowed me to determine that there is a way to
decertify. So we set about, we collected a petition with over
50 percent of our members agreeing. It was my belief, our
belief, that we could submit this to management prior to the
signing of the next contract and we could continue to move
forward without the union.
Unfortunately, there is a contract bar rule, which provides
only a small window of opportunity for that petition to be
submitted. I went to and did another Google search. I was lucky
to find Glenn Taubman at the National Right-to-Work, and he
explained that there was this other provision, a way to
disassociate and at least not be forced to pay another three
years of union dues and have no one listen to us.
The bottom line is we really do not want to have to sit
there and be ignored for another three years. There is
absolutely no other way for us to get their attention to get
them to work on our behalf and do as we ask, other than to have
a vote and be able to say look, enough is enough. We had that
vote; on April 30th 62 percent of the membership, in fact,
voted yes, we do want to disassociate with this union.
However, the union raised an objection and indicated that--
falsely, I might add--that I had some contact with the
management that encouraged me to do this process. It couldn't
be farther from the truth, and it should be immaterial.
Irregardless, we are still waiting for the NLRB to issue the
decision to certify the results of that election and allow us
to move on.
In closing, I would like to say that without right-to-work,
unions are all but guaranteed to become complacent and lazy in
responding to the wishes of their members. This behavior borne
of the ability to force dues from all employees or to get them
fired is guaranteed to cause a rift between the union members
and the union leadership, and will ultimately result in the
collapse of the unions themselves.
Without right-to-work freedom to chose, any claim of
solidarity is an obvious farce. The only way individual members
can have influence over union officials is through the power of
the pocketbook. Our ability to de-authorize the union dues
clauses from our contract, in essence, is a line item veto of
compulsory financial participation, and it has given us the
chance to encourage the OPEIU union to act in the employees'
best interest and to earn our voluntary support.
I think passage of a national right-to-work act would
strengthen every worker in the United States who works under a
monopoly bargaining arrangement. And I think that the NLRB must
be stopped as it tries to weaken and undermine these rights
with this parallel de-authorization process.
[The testimony of Mr. Hewitt follows:]
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Chairman Kline. Thank you, sir.
Dr. Bruno you are recognized.
TESTIMONY OF DR. ROBERT BRUNO, PH.D., PROFESSOR, SCHOOL OF
LABOR AND EMPLOYMENT RELATIONS, UNIVERSITY OF ILLINOIS,
CHICAGO, ILLINOIS
Mr. Bruno. Thank you. Good morning, Chairman Kline, Ranking
Member Scott, and members of the committee. My name is Robert
Bruno, and I am a professor of labor and employment relations
at the University of Illinois.
My testimony addresses four key points. First, I provide an
explanation of what is meant by right-to-work laws. Second, I
explain why the ostensible focus of the hearing today is
mislabeled. Third, I describe how right-to-work laws raise
fundamental equity issues. And fourth, I summarize findings
from a substantial body of evidence on the negative impacts of
right-to-work on workers, middle-class opportunities, and
societies at large.
A right-to-work law has nothing to do with the right of an
individual to seek and accept gainful employment. Instead, a
right-to-work law is a government regulation that bars
employers and labor unions from including union security
clauses in collective bargaining agreements.
Since 1947, workers have not been forced to join a union
anywhere in America. But labor unions must, by law,
unconditionally represent, at times at great cost, all
employees in a workplace.
In my opinion, it is premature to be commenting on the
elements that may be at play in the Buckeye, Florida case.
Consistent with decades of past practice, the board has simply
requested that interested parties submit briefs on a set of
questions.
Additionally, it is important to point out that whatever
the findings of the board turn out to be, the current case does
not revisit or affect in any way the standing of right-to-work
laws. Nothing in the Buckeye case affects the power of a state
to adopt such a law or affects any such laws currently on the
books.
While there is little value in speculating on the Buckeye
case, right-to-work raises serious equity issues. In right-to-
work settings, workers can choose to receive 100 percent of the
sizable benefits of a collective bargaining agreement, while
making no contribution to the cost of providing those benefits.
This arrangement violates one of the most cherished values of
American society: the fairness principle.
Right-to-work, contrary to basic social tenets of
individual autonomy and responsibility, celebrates--even
encourages--shifting the burden of sustaining an equitable
employment relationship onto others who have freely made a
decision to pay their fair share.
Now, as of June 2015, there are 25 states with right-to-
work laws and 25 states, plus the District of Columbia, where
fair share agreements are permitted. This difference in
statewide labor policy creates a natural laboratory in which
researchers have analyzed economic impacts. So let me now
briefly address six of those impacts of right-to-work laws.
First, there is no significant impact of right-to-work laws
on overall employment in a state economy. And corporate
decision makers repeatedly do not identify right-to-work laws
as a defining factor in business location decisions.
Number two, right-to-work policy causes a loss in worker
earnings and lowers both employer-provided health insurance and
pension coverage.
Number three, by lowering worker earnings, right-to-work is
associated with a drop in tax revenues and an increase in the
need for government assistance. Workers, for example, in right-
to-work states receive more in tax relief from the Earned
Income Tax Credit than workers in collective bargaining states.
By earning higher incomes, contributing more in tax revenues,
and receiving less in government assistance, workers in
collective bargaining states are subsidizing the low-wage model
of employment in right-to-work states.
Number four, right-to-work lowers union membership. And
paired with the previous impacts lends weight to claims that
the true intent of right-to-work is an antipathy towards
organized workers.
Number five, unions benefit individuals and society at
large, for example, by raising wages, increasing employment-
based health and retirement benefits, giving workers a voice at
work, and standardizing safety procedures to reduce workplace
fatalities and injuries.
In addition, people living in union households report
higher levels of well-being than those residing in nonunion
households. But, because right-to-work reduces union
membership, there is a corresponding loss of these goods for
individuals and society.
And number six, the United States has experienced a
prolonged period of income inequality. By far, the largest
institutional driver of that inequality has been the gradual
decline in union membership. The decline in unionization rates
explains a fifth to a third of the growth in inequality in
America.
And in conclusion, right-to-work is bad public policy.
Right-to-work laws have no discernible impact on job growth,
lower worker earnings and benefits, have a negative impact on
the public budget, while increasing reliance on government
assistance programs.
Finally, right-to-work laws reduce unionization rates and
the relative power of labor unions, thereby increasing societal
income inequality and, importantly, restraining the growth of
the middle class. Thank you.
[The testimony of Dr. Bruno follows:]
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Chairman Kline. Thank you. Dr. Gould, you are recognized.
TESTIMONY OF DR. ELISE GOULD, PH.D., SENIOR ECONOMIST AND
DIRECTOR OF HEALTH POLICY RESEARCH, ECONOMIC POLICY INSTITUTE,
WASHINGTON, DC
Ms. Gould. Thank you. Good morning. Chairman Kline, Ranking
Member Scott, and members of the committee, thank you for the
invitation to speak here today on the important issue of the
economics of unionization.
My name is Elise Gould, and I am a senior economist at the
Economic Policy Institute. I have three important points to
share with you today.
First, wage growth for typical workers has been sluggish
for a generation despite sizable increases in overall
productivity, incomes, and wealth.
Second, a key factor in the divergence between pay and
productivity is the widespread erosion of collective bargaining
that has diminished the wages of both union and nonunion
workers.
Third, because right-to-work laws weaken unions, it is no
surprise that wages are lower and benefits are less common in
right-to-work states compared to states without such laws.
Productivity is our nation's output of goods and services
per hour worked. In the three decades following World War II,
the hourly compensation of a typical worker grew in tandem with
productivity. Since the 1970s, however, pay and productivity
were driven apart. Between 1979 and 2013, productivity grew 64
percent, while hourly compensation only grew 8 percent.
This brings me to my second point. One key factor in the
divergence between pay and productivity is the widespread
erosion of collective bargaining that has diminished the wages
of both union and nonunion workers. In fact, the erosion of
collective bargaining has been a key factor undermining pay
growth for middle-wage workers over the last few decades.
When unions are able to set strong pay standards in
particular occupations or industries through collective
bargaining, the employers in those settings also raise the
wages and benefits of nonunion workers towards the standards
set through collective bargaining. Over the last 30 years, the
union coverage rate was cut in half. This weakening of the
collective bargaining system has had an adverse impact on the
compensation of both union and nonunion workers.
The decline of collective bargaining through its impact on
union and nonunion workers can explain one-third of the rise of
wage inequality among men since 1979 and one-fifth among women.
Furthermore, the states where collective bargaining eroded
the most since 1979 had the lowest growth in middle-class
wages. Specifically, the ten states that had the least erosion
of collective bargaining saw their inflation-adjusted median
hourly compensation grow by 23 percent from 1979 to 2012, far
faster than the 5 percent growth of the 10 states suffering the
largest erosion of collective bargaining. That is a gap in
compensation growth of 17.9 percentage points.
This same dynamic played out in the ability of typical
workers to share in productivity growth. The divergence between
the growth of median hourly compensation and productivity was
greater in the states that suffered the largest erosion of
collective bargaining. The greater the decline in collective
bargaining coverage, the lower was the return on productivity
obtained by the typical worker.
This takes me to my third point and the subject of my most
recent research in the area, which is attached to this
statement, the relationship between wages and right-to-work
status.
At their core, right-to-work laws hamstring unions' ability
to help employees bargain with their employers for better
wages, benefits, and working conditions. Given that
unionization raises wages for both individual union members as
well as for nonunion workers in unionized sectors, it is not
surprising that research shows that both union and nonunion
workers in right-to-work states have lower wages and fewer
benefits on average than comparable workers in other states.
Wages in right-to work states are 3.1 percent lower than
those in non-right-to-work states after controlling for a full
complement of individual, demographic, and socioeconomic
factors, as well as state macroeconomic indicators.
This translates into right-to-work status being associated
with $1,558 lower annual wages for a typical full-time, full-
year worker. Related research also finds that workers in right-
to-work states are less likely to have employer-sponsored
health insurance and pension coverage. And these results do not
just apply to union members, but to all employees in the state.
Where unions are strong, compensation increases even for
workers not covered by any union contract as nonunion employers
face competitive pressure to match union standards.
Likewise, when unions are weakened by right-to-work laws,
all the state's workers feel the impact. As unions are
weakened, workers' diminished bargaining power means lower
compensation and a continued divergence between pay and
productivity.
Thank you for the opportunity to speak with you about this
important issue.
[The testimony of Dr. Gould follows:]
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Chairman Kline. Thank you.
Mr. Mix, you are recognized.
TESTIMONY OF MR. MARK MIX, PRESIDENT, NATIONAL RIGHT TO WORK
COMMITTEE, SPRINGFIELD, VIRGINIA
Mr. Mix. Yes. Thank you for the opportunity, Mr. Chairman,
members of the committee. It is a pleasure to be here and talk
about right-to-work.
Let's just first of all get a better definition on the
table here about what right-to-work is. Right-to-work laws in
25 states do not stop any worker from joining a union. Right-
to-work laws in 25 states do not stop any worker from paying
union dues. Right-to-work laws in 25 states do not stop any
worker from supporting the political campaigns and political
actions of labor unions. They simply give workers the choice.
Fundamentally, at the bottom of the right-to-work fight is
a battle between union officials and the very workers they
claim to represent. This is not a battle between business and
labor. This is a battle between union officials and workers,
who, if given the choice, may decide they don't want to
associate with a labor union. Unfortunately, in 25 states, they
can be fired from their jobs for failure to tender dues or fees
to a union.
You know, we talk about the right to associate in this
country, the right of association. In order to have the right
to associate, it is fundamentally sound to believe that you
must have the right not to associate. Yet, labor policy throws
that associational privilege on its head by forcing workers to
associate with someone and some organization which they may not
want to associate with. That is the original injustice of what
we have in this regime of compulsory unions and for over 80
years in this country since 1935.
One solution, one minor solution, is to give workers the
choice. In 1947, as the Chairman mentioned, Taft-Hartley was
passed to basically address the issue that from 1935 from 1947,
forced workers not only to pay fees to them, but actually
forced them to join, to physically join a private organization.
In General Motors in 1963, the Supreme Court said we have gone
too far. We can't force them to join a private organization,
but we can force them to pay up to 100 percent of dues or fees
to keep their jobs.
The duty of monopoly representation is something that we
should be discussing here, and it is something that is relevant
to the discussion of the NLRB's action when it comes to
charging workers for representational fees. You know, this so-
called duty of fair representation was created by the U.S.
Supreme Court interpreting the National Labor Relations Act in
a case called Steele v. Louisville National Railroad, 1944.
And that case was a very interesting one. Because if you
look at it, what happened in that case is five black train
workers were not going to be represented by the union. They
were forced to join, but the white union officials said they
would not represent those workers. And those workers went to
the Supreme Court and they said we are forced to join this
organization, we are forced to accept them as our bargaining
agent, but yet they choose not to support us and not represent
us; in fact, won't let us even participate in a union.
And the Supreme Court said in that case, said that is a
pretty amazing power that we have given to organized labor
officials. And because we have given them that power to control
the livelihoods of these workers and to force ourselves in
between them and their opportunity to speak for themselves, we
believe that the statute also created a duty to represent those
workers. That is the duty of fair representation.
So you had this forced association and then you had the
union saying we are not going to represent you--in this
particular case because of the color of your skin--and we had
the court coming back saying we can't give you this monopoly
bargaining power without the right to have workers be able to
represent them as well, even though they don't want to be
associated with you.
The notion that we are now coming back after 60 years of
NLRB precedent, Supreme Court precedent, and U.S. District
Court and federal court precedent and considering the idea that
we are going to force workers to pay fees for grievance
representation is just another example of union officials
trying to get around the right-to-work protections.
I mean, I would be scared, too if I were union officials,
because three states have passed trying work laws in the last
three years. Eleven states had bills in their legislature.
Missouri, the House and Senate passed a right-to-work law. In
New Mexico, the House of Representatives passed a right-to-work
law. In Maine, there is a debate over right-to-work; in
Montana. The issue of worker freedom is spreading across the
country. And one of the things that you could do to stop that
was to give union officials new power to force nonmembers to
pay fees.
The court, in a case called Emporium v. Capwell, said that
individual employees cannot individually use the grievance
process. Union officials own the grievance process. That is a
fact. The Supreme Court has said that, District Courts have
said that, the NLRB has said that. And despite what Betty
Murphy, the Republican member of the NLRB, said in 1975, in
four instances since that time in NLRB proceedings, the NLRB
has upheld the notion that you can't force workers to pay
grievance fees.
The extant case here, the Buckeye case we are talking
about, is about the idea of forcing this worker to pay a fee.
Now, obviously, nothing has been happening yet on this. And we
expect the NLRB to ask. They have asked for briefs, as the
professor said. And we expect that the three members of that
board who have changed the rules as to union elections and are
looking to change the rules as to how strikes are operated are
interested in changing the rules on how right-to-work laws are
enforced. And I would be glad to talk to you more about that in
question-and-answer.
[The testimony of Mr. Mix follows:]
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Ms. Foxx. [Presiding.] Thank you very much. Thanks to all
the panelists for doing such a great job of staying within
time. I now recognize myself for five minutes to ask questions.
The Chairman had to step away and will be back.
Mr. Mix, Mr. Bruno states that a right-to-work law is a
government regulation that bars employers and labor unions from
agreeing to ``union security clauses in collective bargaining
agreements.'' This is a substantially different explanation
than the one you have offered. And I know that Mr. Bruno's
explanation leaves out employees.
I have two questions. First, is a compulsory union
membership a government creation? And second, how can employees
object to a union security clause in a collective bargaining
agreement?
Mr. Mix. Yes. The notion of compulsory unionism was
developed in 1935 in the Wagner Act after President Roosevelt
came to office. And using New Deal powers and the energy of the
particular climate at the time, they passed a sweeping labor
relations law that now covers private sector workers across the
country. We are 80 years into that experiment.
So the idea of Section 7 rights under the National Labor
Relations Act is really kind of a very interesting preamble to
our labor law. It talks about the workers' rights to associate,
the workers' rights to bargain, the workers' rights to do all
of these things. And it says--believe it or not, it says ``has
the right to refrain--'' and if Congress would have put a
period there, we wouldn't be here today because unionism would
be voluntary. But they didn't. They said, except to the extent
that a worker can be compelled as a condition of employment, as
a contract matter, to formally join a labor union. If Congress
hadn't said that at the end, that little phrase at the end of
Section 7 of the Act, we would have voluntary unionism in
America. But Congress established this compulsory union saying
a worker could be fired if they did not tender dues or fees to
a union. Twenty-five states now protect that.
The idea of a union security clause, that is a mandatory
subject of bargaining. If an employer refuses to bargain over
whether or not his employees would be forced to pay dues or
fees or her employers are forced to pay dues or fees, the union
can file an unfair labor practice charge against them saying
they are not bargaining in good faith. They must bargain over
the union security clause.
And frankly, if you are an employer and you look at this
and you say okay, we are bargaining over wages, working
conditions, all kinds of things. The one thing the unions put
on the table is a union security clause, that doesn't cost me a
thing. It simply says I have to force all my employees to pay
38 bucks a month in order the work here. It doesn't hit my
bottom line, it doesn't hit the cost of the contract. It is
simply something that one, you have to bargain over. And two,
something that the union oftentimes goes on strike over if you
don't agree to it and will file unfair labor practices if you
won't bargain over it.
Ms. Foxx. When you were President of Accutrade, you
employed hundreds of people. How did you handle employee
grievances at Accutrade? In your opinion, is union
participation necessary to resolve a grievance to the
satisfaction of both the employer and the employee?
Governor Ricketts. Well, I don't believe that the union
participation was necessary. When we had issues with folks who
worked at Ameritrade, we tried to work them out. So, for
instance, if someone had an issue with the manager, they would
bring it to the manager, they would bring it to that manager's
manager, or they would talk with us.
I think what you are really seeing here is it is about the
employees' right to choose. How do they want to resolve those
issues? And the company that I was at, we tried to resolve
those because we knew that if we had somebody who was a
satisfied employee, that person would take care of our
customers, and that is how we were able to grow our business.
So we didn't need a union to be able to do that. We knew that
it was in our best interest to make sure that our employees
were happy so they would make sure our customers were happy.
Ms. Foxx. Thank you. Let me go back to Mr. Mix.
We hear a lot about the issue of fairness around here.
Unions have argued that fair share policies that require
nonmembers to pay grievance processing fees are fair. Is this a
fairness matter? And you alluded before about employees
pursuing their agreed grievances outside the procedures laid
out in the CBA. I wonder if you would talk a little bit more
about that.
Mr. Mix. Yes. Just to reiterate, the policy of the Supreme
Court, the NLRB, and federal courts has been that individual
workers cannot exercise the grievance process outside of union
control. The unions own the process. That is literally the
words the courts have used in talking about the grievance
process.
But let's talk a little bit more about the fairness to
nonmembers. In a right-to-work state, even in the 25 right-to-
work states, in order for a worker to exercise those rights,
they have to give up certain workplace rights in order to
exercise their personal rights or their political rights. You
have to resign to union membership in order to exercise your
privileges under the right-to-work laws.
What that means is you can't vote on the very contract that
governs your employment. It means you can't vote in union
elections. You can't run for union office. You can't
participate in union activities at all.
So on one hand, you have this Hobson's choice of having to
give up your workplace rights in order to protect your
philosophical, economic, political rights. That is not fair to
begin with. Because the union has the monopoly bargaining
privilege. They speak for you whether you want it or not. You
are forced to associate with them.
In the forced-unionism states, a worker has to go through
that same process and give up those same rights, but can be
compelled to pay fees in order to keep their job. That is not
fair.
Ms. Foxx. Thank you very much, Mr. Mix.
Mr. Scott, you are recognized for five minutes.
Mr. Scott. Thank you, Madam Chair.
Mr. Mix, you went to great lengths to talk about the
unfairness of union members not being fairly represented. Isn't
it true that even nonmembers get the benefit of salary
negotiations?
Mr. Mix. That is true. Under the exclusive monopoly of
bargaining power, those workers will receive those. But they
have to.
Mr. Scott. Okay. And if the union hires people to make sure
the workplace is safe, the nonmembers get benefit of that--of
those expenditures?
Mr. Mix. Congressman Scott, you are assuming that
everything is a benefit to everybody. I would disagree with
that contention, that premise. And we can discuss these. I
mean--
Mr. Scott. Okay, well--
Mr. Mix.--the idea that something benefits you, I may not
believe it to be a benefit. So you can talk about the equity of
that--
Mr. Scott. Well--
Mr. Mix.--compulsory agreement.
Mr. Scott. But you know that Virginia is an employment-at-
will state, where the employer can fire people without cause?
Mr. Mix. Yes, sir. And as a state legislator, you know they
are not the same code. The employment-at-will doctrine is
completely separate from the right-to-work doctrine.
Mr. Scott. That is true. But if you are not a union member
and the union contract says you can't be fired without cause,
you would benefit for that even though you are not paying dues,
is that true?
Mr. Mix. That is a burden that the union took upon
themselves, sir. They wanted to be the exclusive bargaining
agent. In fact, the United Steel Workers--
Mr. Scott. The employee nonmember gets the benefit of that
protection.
Mr. Mix. Under the monopoly bargaining agreement, they are.
The courts have recognized there is a duty of representation,
that is correct.
Mr. Scott. Dr. Bruno, the nonmembers get the benefit of all
of the benefits that members get. Is it a different question
when you talk about individualized representation that no one
benefits from except the free rider?
Mr. Bruno. Well, Member Scott, if I understand your
question, it really speaks to who benefits when the union
negotiates a collective bargaining agreement and whether those
benefits are equally accessible to all workers. And at
different times in a worker's career, one benefit may prove
more valuable than another. But they are all equally available.
They can all be equally accessed.
And clearly, a safer workplace will benefit all workers,
whether an individual worker conceptualizes a particular safety
procedure as helpful or not. Safety is something that affects
everyone. Wage increases, retirement benefits, having a voice
on the job, being able to have an opportunity to question a
form of managerial abuse. We recognize these generally as a way
to bring democracy into the workplace. And that is going to be
an equal benefit to all workers, whether individual workers
have a particular need for it at a particular time.
Mr. Scott. And what about--yes. But a grievance is an
individual representation that runs up cost. Is that a
different question whether a nonmember were to have access to
that individualized representation that doesn't benefit anybody
but that nonmember?
Mr. Bruno. Well, it is--actually, it is--most grievances
that occur in the workplace, whether they are happening to a
union member or to a nonmember have implications for the entire
bargaining unit. They set precedent. They help to shape what
the bargaining relationship is going to be.
So in effect, every worker is impacted by the way
particular disputes are addressed and handled in a workplace.
Mr. Scott. But that individual will benefit without paying
any of the costs?
Mr. Bruno. Absolutely. Absolutely.
Mr. Scott. We have heard that right-to-work states, Dr.
Bruno, have competitive advantages. What is the competitive
advantage that a right-to-work state has?
Mr. Bruno. Well, if you are a worker, I can't see any. In
you are an employer, there is some shifting of wealth shares
from workers to the employer. But in terms of the general
health of the economy or of workplaces, there is no clearly-
defined benefit that right-to-work isolated as a policy
generated.
What it ultimately does, it reduces voice. It reduces
choice on behalf of workers who collectively organize. And it
re-shifts power to management.
Mr. Scott. Dr. Gould, can you talk about the benefits of
union membership to nonmembers? To those areas where there are
not--people are not--do not belong to unions, what a strong
union movement does for them?
Ms. Gould. Yes, absolutely. A strong union membership sets
standards that raise the wages of nonunion members, as well as
union members so that the wages and benefits are higher and
wage bargaining is stronger in both union and nonunion benefit
in--for both union and nonunion members where unions are
strong.
Chairman Kline. [Presiding.] Gentleman yields back. I want
to apologize for stepping out for a minute. It is a crazy world
that we live in. And thank Dr. Foxx for taking the chair for a
few minutes.
Dr. Bruno stated in his testimony, roughly quoting here,
that nothing in the case before the board on grievance fees
affects the power of a state to adopt right-to-work laws or
affects any such law currently on the books. Roughly a direct
quote.
Governor Ricketts, do you agree with that?
Governor Ricketts. No, I would disagree with that. In fact,
as I mentioned in my testimony, we have actually fought this
battle over 10 years ago. And during the course of that
discussion, our attorney general ruled--and I think other
courts have found the same--that if you are compelling nonunion
members to pay grievance agency fees, whatever it is, you are
essentially compelling them to join the union, which is in
direct contradiction of our constitution in Nebraska and, in
general, the principle of the right-to-work states.
So this proposed rule would actually be a direct attack on
the 25 right-to-work states and the laws that they have passed,
in our case, our Constitution.
Chairman Kline. Thank you. Continuing with Dr. Bruno's
testimony. He says that right-to-work policy is a misguided
means to individual advancement at the expense of others.
Mr. Mix, your testimony highlights how compulsory
unionization advances certain individuals at the expense of
others. Could you briefly summarize that section of your
testimony? Let's get clear on this.
Mr. Mix. Yes, it is interesting. When you think about the
idea that a collective, no good worker can be rewarded above
any other worker, no bad worker can be disciplined as opposed
to other workers when it comes to a monopoly bargaining
contract. Basically, even union officials and union economists
have indicated this, that it is clear that union--compulsory
union agreements and monopoly bargaining agreements actually
hold back some of the most productive workers. And it stops
them from being rewarded for their good work, because all of
the raises or bonuses or anything have to be negotiated in the
contract.
So it is very clearly detrimental to some of the best
workers, and it is very beneficial to some of the worst
workers.
Chairman Kline. Yes, thank you. It is interesting to see
the steady decline in union membership in the private sector.
And I am always fascinated in these hearings and these
discussions. Everybody has got statistics, boy, they have got
research they are ready to quote. And it depends on what
baseline you start with and what you factor in and out.
I am looking at a little factsheet here that shows some
numbers derived from the Bureau of Labor Statistics and the
Department of Commerce, Bureau of Economic Analysis, and some
more stuff from the Bureau of Labor Statistics.
And it gets to--again, these are--depends on where you
start. But if you look, for example, according to this, at the
growth and the number of residents in the state, in right-to-
work states they are a growing by 5.4 percent between 2003 and
2013. And the other states are declining by 4.1 percent. So I
can understand why some governors would be pretty strong
proponents, as we have seen in recent months, for right-to-work
laws.
More statistics. Here again, if you look from 2004 to 2014,
the percentage of growth in nonfarm private sector payroll
employment in right-to-work states is 9.9 percent, in the other
states it is 5.1 percent. The percentage of growth and total
private sector nonfarm employment; right-to-work states 16.2
percent, other states, those are forced-union states, 9.3
percent. Percentage real growth in private sector employee
compensation; right-to-work states 15.3 percent, forced-union
states 8.4 percent.
So we have heard all kinds of other different statistics
here. Dr. Gould had a different starting point. If you start in
1970, you get a different number. I think they are important.
And it is important for us to understand where we are starting
when we are looking at these statistics.
So trying to--in my continuing futile effort to set the
standard here, I am going to yield back and recognize Ms.
Fudge. I think you are next.
Ms. Fudge. Thank you very much, Mr. Chairman. And thank you
all for being here and for your testimony.
Mr. Chairman, here we are again. We are here at the same
place we were before talking about states' rights. Here we are
again, moving back in time to a place where we want to ignore
established law, we want to once again put states in a position
to make a determination as to who should work and who should
not. We have come to a point where we are disproportionately
once again affecting populations who are poor and populations
of color.
I listen to the governor talk about what happened back in
1953. Mr. Mix talked about what happened in 1944. That was
before the Civil Rights Act of 1964. It was before the Voting
Rights Act of 1965. It was before nondiscrimination labor laws.
So let's not talk about the past. Let's deal with established
law.
Professor Bruno, you talked about, or gave us examples of
workers who are costing the government more money because they
are in right-to-work states. Could you expand upon that,
please?
Mr. Bruno. So if you take a look at the percentages of the
population within states that are collective bargaining states
and right-to-work states over a period of time and look at what
percentage of their population, for example, would be receiving
food stamps and the total dollar value of those food stamps, or
you were looking at the Earned Income Tax Credit, as two--just
two examples, and compare those to collective bargaining
states, which would obviously have a higher unionization rate,
what you find is that those right-to-work states are receiving
a larger percentage, if you will, value of government
assistance back to those states than they are contributing to
the Federal Government, as opposed to the collective bargaining
states.
Illinois being one as an example, which actually pays more
in federal taxes to the government than it gets back in federal
assistance. And we can look at--also look at poverty rates and
can see that in these three collective bargaining states,
poverty rates are lower. So that is the issue that I was--
Ms. Fudge. So basically then you are saying that you have
data to prove that people who are on government assistance are
not just lazy, just don't want to work? We are talking about
working people; correct?
Mr. Bruno. Oh, absolutely.
Ms. Fudge. Just wanted to make sure about that.
Mr. Bruno. No question about that.
Ms. Fudge. Thank you very much.
Ms. Gould, could you please elaborate on the institute's
findings that over the last 10 years, there has been a lost--it
has been a lost decade for American workers?
Ms. Gould. Sure. Great question. What we have seen over the
last 10 years, and unfortunately even longer than that, is very
sluggish wage growth for the vast majority of Americans in this
country. It is not just about the Great Recession and the
losses that we saw there in employment and in wages. But the
trends have been going much longer back than that.
Ms. Fudge. Professor--oh. Let me go back to Ms. Gould.
In a resent paper, the Economic Policy Institute states
that productivity grew by 74 percent since 1973 while hourly
compensation of a typical worker grew just 9.2 percent. How has
collective bargaining played in that, one way or another?
Ms. Gould. Yes, it is a great question. So collective
bargaining we have seen--again, over that 30-year period,
collective bargaining has been--the loss--the erosion of
collective bargaining has meant that half as many people were
covered by collective bargaining. We have cut the coverage
rate, the union coverage rate, in half over that period. And
that is the key reason why we have seen this disconnect between
pay and productivity in this country.
Ms. Fudge. Thank you.
Mr. Chairman, I yield back.
Chairman Kline. Thank the gentlelady. I am just noticing
here, looking at statistics again and listening to Dr. Bruno,
from the Bureau of the Census the welfare, the TANF recipients
per thousand residents in right-to-work states is five and in
forced union states is 15.6. So depends on where you measure.
Mr. Byrne?
Mr. Byrne. Thank you, Mr. Chairman. And I appreciate my
colleagues saying we should not ignore established laws.
Mr. Mix, isn't it a fact that the established law that is
at issue here is the Taft-Hartley Act? And the provision that
it has, it says that states can choose to enact their own
right-to-work laws and those right-to-work laws are
enforceable. Isn't that the established law that is in issue
today?
Mr. Mix. Yes, that is right. Section 14(b) is one of those
unique sections that allow a state to get out from under the
federal preemption as it relates to the National Labor
Relations Act and allow them to outlaw union security
agreements that require workers to pay dues or fees to get new
jobs.
Mr. Byrne. And in taking briefs in this case, as the Labor
Board is doing, seems to me to be an effort to go right in the
teeth of what that established law says by saying well, we are
not going to make you join the union. But since the union has
to represent you in the grievance process, whether you want
them to or not, we are going to make you, an individual citizen
of this country, we are going to force you to pay that union to
do that. Isn't that an end-run around the established Taft-
Hartley law?
Mr. Mix. Absolutely. I think the briefs in cases since that
time indicate that very fact.
Mr. Byrne. So isn't the real issue here today that we have
got this 800-ton gorilla, the big unions in America that want
to throw their weight around and take freedom and liberty away
from individual citizens like Mr. Hewitt and force them to pay
these unions money because the unions are losing membership and
they are losing money? Isn't that what this is really all
about?
Mr. Mix. I think so.
Mr. Byrne. So, Mr. Chairman, we come to these things and I
hear people say well, we don't know what the Labor Board is
gonna do. I know what the Labor Board is gonna do. Every time
we come in here we say we don't know what they are gonna do. We
all know what they are gonna do. They got three people on that
board and they are gonna do whatever the labor unions want them
to do.
Now, heretofore, what they have done, Mr. Mix, I think is
they have changed precedent as established by case law by the
Labor Board. This, however, would be going into the teeth of a
congressional statute. Isn't that the difference?
Mr. Mix. That is correct. I think that courts have ruled
and briefs have ruled that in order for this to be changed, you
have got to come to Congress.
Mr. Byrne. And instead what they are trying to do is go
around Congress, because they know that we are not going to do
what we want them to do.
I was listening to the testimony from Mr. Bruno. Mr. Bruno,
you said that businesses don't cite right-to-work laws as
reasons to locate a business. I have talked with dozens and
dozens and dozens of businesses who have considered coming to
the state of Alabama, a right-to-work state.
Every time they mention two things. They never talk to me
about incentives, by the way. They talk about the quality of
your workforce. And I am proud to say we have got great workers
in Alabama, as I know you do, Governor, in Nebraska. And the
second thing they say is your labor laws, particularly the fact
that you are a right-to-work state.
Where in the world are you getting your information that
business people don't take that into account?
Mr. Bruno. Well, thank you, Congressman. So there is a
business magazine referred to as Area Development Magazine. And
there is an annual survey that is done of corporations in which
CEOs are asked about decisions to relocate their businesses.
And there are up to 30, 40 different factors that are usually
mentioned. And according to the research that I have done
looking at--and others have--that labor policy, right-to-work,
rarely ranks higher than 16 or 17. What ranks much more--
Mr. Byrne. Then why are all these people--why are the
states--you just heard the Chairman give the data. Why are
these states that have right-to-work laws, why are they
growing? Why is employment growing in those statements and not
in states that don't have right-to-work laws?
Mr. Bruno. Well, actually, it is not completely true that
states that have collective bargaining agreements or that are
collective bargaining statements aren't growing. Just to use
Illinois again. Illinois actually created more jobs than its
neighbors did in the past fiscal year--
Mr. Byrne. Well, if you--we are running out of time. But
please send me those--
Mr. Bruno. There are lots of--
Mr. Byrne. I am going to go to the economic development
conference in my state in a few weeks here. And I am gonna show
them your research and I can't wait to see their reaction.
Last thing I want to go over with you. You said that wages
are going down for people in right-to-work states. Go look at
Alabama's data. Since we have shed unions, our workers' wages
have gone steadily up. And our workers are voting with their
feet by going to these employers that are nonunionized because
they are better places to work, where they get better wages,
wages that people in Alabama have never been able to dream of.
And when they keep bringing these union elections back to
people like Austal Shipyard in my district, the employees say
we don't want it.
And, Mr. Chairman, I don't think we should make those
people pay a dime to a union if they don't want to. Thank you,
sir, I yield back.
Chairman Kline. Gentleman yields back.
Mr. Pocan, you are recognized.
Mr. Pocan. Thank you, Mr. Chairman. And thank you to the
witnesses for being here today.
First of all, Mr. Chairman, I think, you know, the
Committee, the name we have for today's hearing is a little
misnamed and misguided. I think right-to-work laws prohibit
union fees as a condition of employment. But grievance fees, if
deemed lawful, are not a condition of employment. Grievance
fees are not an attack on right-to-work laws. So the hearing is
misnamed.
In fact, I would argue that we should be talking about
right to freeload, rather than right-to-work laws. Because that
is what I see out of this, is really a right to freeload. In
fact, Mr. Mix, in your written testimony you talk about this
idea of someone getting in a cab. Well, this morning I got on
the metro, all right? And I swiped my card to pay. If someone
else decided the metro's already going where they are going to,
why don't they just hop the fence and go in, I would consider
that freeloading.
And that is exactly what I see by people not paying their
fees; right? I mean, we know there are cheap people in society,
right? They don't want to pay to get the benefits like the
others. But really, it is more about freeloading more than
anything else. And I think that is what is behind these right-
to-work laws.
We just went through this fight in Wisconsin. So I am very
familiar with it. In fact, one of the other things that in
addition to the freeloading aspect of this, it is not just that
you make less money and you get less benefits, but also it
doesn't create jobs. And it is not just the anecdotal sort of
this is what happens in Alabama. But this is Bureau of Labor
Statistics.
And I am very sensitive to these because I got
PolitiFact'ed on this. And I got a mostly true because I said
Wisconsin was dead last in the Midwest for job creation.
Technically, we are tied for dead last. Nebraska was, in this
particular report, tied for second to last.
But right-to-work doesn't seem to be having that magical
formula of creating additional jobs, at least according to the
Bureau of Labor Statistics, who actually counts the jobs,
rather than anecdotes about individual states.
But the bottom line is people really do make less money. We
know that. We know according to some studies you make $6,000.
In other studies you make $7,000 less than states with right-
to-work. And then I believe you make $4,000 less than the
national average in right-to-work states.
So again, those are concrete numbers that show that you
have a right to work for less in these states. But it doesn't
necessarily benefit any people.
What I would like to do is that I would ask unanimous
consent to enter into the record, I have got a list of 468
businesses in Wisconsin that oppose the right-to-work law that
we just had.
[The information follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Kline. Without objection.
Mr. Pocan. And the reason I raise this is just the
conversation we just had. You know, we talked about the dozens
of businesses who are coming to Alabama because they didn't
have right-to-work laws. And yet, interestingly, in Wisconsin
when we had this fight, some of the leading opposition to the
right-to-work laws came from local business leaders, 468
businesses.
So Dr. Bruno, if I could just ask you that question
specifically. You know, we know you are gonna make less, we
know you are gonna get less benefits, we know you can freeload
by being not able to, you know, pay anything when you are gonna
benefit from something. But why would businesses be so strongly
opposed to putting a right-to-work law in place? Why would that
happen?
Mr. Bruno. Well, thank you, Congressman. For a number of
reasons. There are a number of studies that demonstrate that
union workers are highly productive. There has been a series of
meta analyses, which--or studies that look at other studies and
summarize those and find that productivity gain can be, you
know, 7, 10 percent. In the construction, the unionized
construction industry, 17 to 20 percent.
Look at the high percentage of union members actually that
have master's degrees or college degrees compared to similarly-
situated nonunion workers. And we know that education is
powerfully correlated with productivity. So it is a highly-
productive workforce. It is a safer workforce. Think about
workman's comp cost.
In fact, most employers, when they look at what really
drives where they are gonna go, they are looking at policies,
but it isn't that labor policy. It is not that labor management
policy. It is about regulations. It is about taxes. It is about
workman's comp. Those issues--
Mr. Pocan. I am glad you said that. Because, I mean,
anecdotally, you know, Ameritrade may not trust their workers
to collectively make some decisions. But a lot of these
businesses do. You know, and I have a union shop, just for the
record. And because I have people who stay long in the
business, I don't have to retrain them. And because we have
apprenticeship programs to make sure that people are highly
trained so that I can get more business because they know that
they are gonna get a better quality product. I just want to
hear the anecdotal--I didn't want it to just be an anecdotal. I
wanted to have it from your side.
Dr. Bruno, this freeloading argument. I mean, am I wrong to
say, essentially you are freeloading if you are not paying a
grievance fee and you are still getting a benefit? Isn't that
like the example of the metro hopping over the turnstile?
Mr. Bruno. It seems to be consistent with what we learned
in kindergarten, quite frankly.
Mr. Pocan. Yes.
Mr. Bruno. Right? Everybody should make a contribution.
Everyone should be treated fairly. It is about accountability.
You are receiving a benefit, a sizable benefit. That grievance
could lead to an arbitration that saves your jobs that over a
career could amount to thousands of dollars. You benefit not
just in the moment, but you benefit maybe over a lifetime. And
you have contributed nothing to it.
But you perceive that if you contribute nothing to it, the
strength of the union will always be there. Notice they are
saying that they are working for that unionized company.
Because they want that union to work for them. They are simply
looking at the options and saying if I can get it for nothing,
some people will do that.
Chairman Kline. Gentleman's time is expired.
Mr. Bishop.
Mr. Bishop. Thank you, Mr. Chairman. Thank you to our
distinguished guests today.
Is there anything to prohibit a person from voluntarily
paying a union fee?
Mr. Bruno. No.
Mr. Bishop. So if they wanted to join a union and get those
benefits, they could do that voluntarily?
Mr. Bruno. Yes.
Mr. Bishop. I am from Michigan, so all of this I take very
personally. We are a labor state. We are a proud labor state.
For many years, Detroit was the arsenal of democracy. And we
did very well back in the day. And then came about 2000 to 2010
where Michigan hit a significant downturn. Everything turned
upside down. Jobs fled, people fled. We were one of the only
states in the union that actually lost population. And we would
have lost more if the housing market wasn't so bad. People
couldn't sell their houses; locked in place. And we shed jobs,
especially in the manufacturing sector.
About 2010, the people of our state said enough is enough,
they kicked out our former governor, brought in a whole new
group of leaders who made some really tough decisions from 2010
until now. One of those decisions was right-to-work. And if you
had told me 10 years ago that Michigan would be a right-to-
work, I would have told you, you are crazy.
But everything you are telling me is completely contrary to
my experience. Michigan has completely turned around. It is not
just because of right-to-work. It is because of a lot of other
things. But our unemployment rate is now 5.4 percent. And all
those union workers that used to be involved in the union, who
can now voluntarily belong the that union, are working again.
And instead of being forced out of the state and being
displaced, they are now working again.
And to me, the decisions that were made, although tough and
contrary to our history in terms of the culture of the state,
made a difference. So my experience is different. So when you
tell me these statistics, I can't believe what I am hearing.
But I would like to know, Governor Ricketts, I hope if you
could just--and I would like to talk to Mr. Hewitt too and his
experience as well. And I appreciate your being here. Because
we need your testimony, as well.
Put your executive hat back on again. Help me out here.
Governor Snyder in the state of Michigan is trying to attract
new business. How does right-to-work help your state? Can you
give us some information? We just heard that it--there are
some--some businesses that want the right to--or want a union
environment. How does right-to-work help your state?
Governor Ricketts. Sure. I think fundamentally what right-
to-work does is it is about freedom. It is about the
opportunity to choose. And so when companies and employees are
thinking about that right, they want to have the most
optionality they can, or the greatest ability to choose.
Certainly, in my experience in the real world, it is a
competitive advantage. We made decisions about where we were
going to expand based upon that absolute fact. And so, you
know, that was kind of the first question. If you are not a
right-to-work state, none of the other things are gonna matter.
We are not even gonna check you.
You know, we are not gonna look to see what your workforce
is like, we are not gonna look the see what your roads and
infrastructure is like if you are not right-to-work. We have
got plenty of other states that are right-to-work that we can
go find those similar types of things. And that is where we are
gonna look to expand.
So that is a huge competitive advantage for any company
located in a state that is a right-to-work state to be able to
draw--you know, to have. And why it is an advantage with states
to draw those companies in or to look to get companies to
expand there. I think it allows people to have more freedom,
more flexibility.
And again, it gets back the choice. You know, again, my
experience in Nebraska is the people in Nebraska overwhelmingly
support this. They have for almost 70 years. And it is one of
the things that we certainly looked for when I had my executive
hat on. And now, as governor, I am looking to make sure that we
continue to retain that; that the NLRB doesn't do--undercut
that rule so that we can continue to try to attract jobs to our
state. And we do have the lowest unemployment rate in the
country and one of the highest--we do have an above national
average workforce participation rate, as well.
Mr. Bishop. Thank you, Governor.
And Mr. Chairman, I yield back.
Chairman Kline. I thank the gentleman.
Ms. Bonamici?
Ms. Bonamici. Thank you very much, Mr. Chairman.
And thank you to our panel of witnesses for their
testimony. This has been a very interesting discussion that has
obviously gone beyond the scope of what is suggested by the
title.
And I just wanted to make a big picture comment to start
about some of the language. There was an analogy about union
membership being analogized to kidnapping and extortion. And I
think that kind of message is not very productive in a
discussion about the benefits of union membership. And as some
might say, not benefits. But let's have a discussion that
doesn't inflame people.
And interesting that I am following on the member from
Michigan. I actually was born and raised near Detroit. So my
grandfather worked for Ford Motor Company before 1941, before
the UAW came to Ford Motor Company. And just looking at the
differences in his workplace over time from before the UAW was
there in terms of safe working conditions.
And when we talk about union members, you know, we
shouldn't make these stereotypes with the inflammatory
language. We are talking about teachers and firefighters and
people who take care of sick patients. You know, there is a
really broad range of people in unions. So let's make sure that
we are having a factual discussion.
So I represent a district in Oregon. We were the first
state to officially recognize Labor Day back in 1887, and
firmly believe that the workers in Oregon as well as across the
country should be able to collectively bargain for fair wages,
reasonable hours, safe workplace, health care, other hallmarks
of a democratic society.
And unions continue to do things like build the
infrastructure, help our economy grow, strengthen the
innovation of America's workforce has long been the key to our
success as a nation. And looking back over history, we cannot
understate the role of the labor movement in helping to create
and maintain a thriving middle class.
So in Oregon, I know we have had some discussions about the
disparity in wages between union members and people who aren't
in a union. But for example, the University of Oregon Labor
Education Research Center identified the median hourly wage for
a certified nursing assistant in an Oregon nursing facility.
And there was a difference--$12.15 but in a unionized facility
it was $14.29. With insurance and retirement benefits included,
a little more than $15 an hour.
So when you talk about those differences in wages--and
obviously, as we saw in--over history, when people have more
discretionary income, they spend more so--in the marketplace.
So I wanted to ask you, Dr. Gould, your testimony states
that wages in right-to-work states are lower than in states
without right-to-work. And there is obviously a difference in
states across the country. We have a very diverse country. So
can you explain whether and how this remains true, if there
are--differences in tax policy, demographics, education, other
types of industry.
And I know my state of Oregon is not a right-to-work state.
And we have businesses that love doing business there. It is a
place to live. There are a lot of other factors that go into
that consideration. So can you talk about that, whether there
is data to show, considering those variations to the whole.
Ms. Gould. Sure. Absolutely. That is a great question. And
I think the example that you gave is a great example. You are
talking about within your state where the policies and laws are
similar, the economic conditions are similar, and you are
comparing a CNA in a union shop with a CNA in a nonunion shop
and looking at those wage differences.
What we do when we look at right-to-work states and non-
right-to-work states is we are trying to do exactly the same
thing. We are trying to look at individuals that are all else
equal and see if their wages are any different.
So to do that properly, we use multi-varied regression
analysis, and we can control for the racial composition of that
state, we can control for the educational attainment of people
in that state, we can control for the occupations, the
industries, all the different factors that might be different.
The cost of living in one state versus another. And when we
control for all of those things, we still see that right-to-
work states have 3.1 percent lower wages.
Ms. Bonamici. Thank you. And I am gonna try to get one
quick question in.
Dr. Bruno, your testimony says that the right-to-work
states lead to a reduced state tax collection. In part because
of the Earned Income Tax Credit and increases in use of
programs like SNAP. So what studies have been done to quantify
these costs to government from right-to-work laws?
Mr. Bruno. The study that I am referencing is a study that
we did here at the University of Illinois. I believe it is
referenced in the written testimony that we submitted when we
actually took a look at essentially the way in which two
states--and we were looking at Illinois and other collective
bargaining states and Indiana as a neighboring state trying to
measure this.
So there is actually a report that we did at the university
that I could certainly make available to you that made this
comparison.
Ms. Bonamici. Thank you, Dr. Bruno.
My time is expired. I yield back. Thank you, Mr. Chairman.
Chairman Kline. Thank the gentlelady.
Mr. Allen?
Mr. Allen. Thank you, Mr. Chairman. And thank you,
distinguished panel, for your testimony here today. It has been
very enlightening.
As a business owner for the last 37 years in the state of
Georgia, I have experienced lots of activity, both with the
union and nonunion workers. Actually, the company I started
working with was union. And then when we formed our company, we
elected to go nonunion at that time because that was sort of
the trend. And that was in the mid-1970s.
One of the things that I value about our employee
relationship is the fact that, you know, we are--kind of turned
the hierarchy upside down. The workers actually have a good bit
to say about how we run our business. And we like it that way.
And I found that in my union involvement, it was always a
conflict. And it was very difficult to deal with.
But I will say that Georgia was selected by Site Selection
magazine as the number one state to locate a business in. And
we have been a right-to-work state for a long, long time. And
we too are very proud of our workers and our productivity, our
cost of living, which I don't think we have talked about cost
of living or the cost of products and things like that make a
big difference and competitiveness, makes a big difference, you
know, where we are.
And the fact that our workers love where they work. And I
have experienced that touring many of our manufacturers
throughout the district since I was just recently elected to
Congress. And what I have been amazed at is the attitude of the
workforce out there with these manufacturers. And it has been
quite enlightening to me as far as the labor front goes.
Mr. Hewitt, we haven't asked you a question. And I have
been involved in United Way. I love that organization because I
think it is like 90 percent of what we raise actually goes to
help the agencies and the folks we are trying to help. And that
is what community is all about.
And I am sure as a National United Way, you have talked to
others in the--around the--I don't--we are not union. Our
United Way is not union. They are in Augusta. But in your
talking with these other United Ways and your having to spend
apparently a lot of your time dealing with these union issues,
how are you doing that and still being able to serve the very
folks that need serving? Can you explain that?
Mr. Hewitt. I put in a lot of hours. Most of this behavior,
all of this effort is done off hours, individually, via
individual email. It is not done during company time.
Mr. Allen. Right.
Mr. Hewitt. And it is--we do--I am a little upset, because
we do have a lot of union involvement. And there have been
extreme threats of pulling back, pulling away and not
supporting to the degree that they have. There have been claims
that unions in our area support your organization. And because
you are doing this antiunion thing of disassociating, we are
going to pull our support.
Now, okay, you are affecting the community because we, as
the members, find that we are not represented; that we, in
fact, do not have a union that works for us, but work for
themselves. Because we are raising our hands and objecting to
that and trying to exercise our rights, you want to affect the
entire community?
Mr. Allen. Let me see if I heard you correctly. In other
words, the unions don't quite understand exactly what your
mission is here? I mean, your mission is to help folks who--
Mr. Hewitt. It seems not to matter. It seems not to matter.
Mr. Allen.--are unfortunate and can't help themselves.
Mr. Hewitt. Right.
Mr. Allen. So they don't care about that?
Mr. Hewitt. That is the message. I am hoping that it--
Mr. Allen. That is shocking.
Mr. Hewitt.--was just said in anger.
Mr. Allen. Yes.
Mr. Hewitt. It didn't prevent our membership from standing
up for our rights and for saying in spite of that, we don't
feel that we can continue. A number of our members did,
obviously. We had 100 percent participation, but we had 62
percent who said no, we cannot continue--
Mr. Allen. It is unconscionable that people in America
would have strings attached to the cause to help the--
Chairman Kline. The gentleman's time has expired.
Mr. Allen. I yield back.
Chairman Kline. Mr. DeSaulnier.
Mr. DeSaulnier. Thank you, Mr. Chairman. I really find this
conversation interesting. Having grown up in two states that
are not right-to-work states, Massachusetts, and have lived
most of my live in the Bay Area, both areas that I would argue
are cornerstones to innovation in this country but also have
strong historical labor movements.
So while I appreciate the details of Mr. Mix and the issues
about around what NLRB is about to do, I tend to believe that
NLRB will do as it is designed to, as it is designed to do in
the political context of who is appointed to that, depending on
the administration. And then the courts will opine one way or
the other.
So I am more interested in sort of the macro of--Mr.
Lincoln once said that in the United States, we should always
keep capital and labor roughly within balance. And he also said
if capital were to become out of balance and superior, we would
lose American democracy, which is my fear sitting here today.
And I say that as a former union member, but also as a
former business owner of nonunion restaurants. I tended to
think that if I treated my employees well, they wouldn't have a
reason to organize. Sort of similar to what I have heard from
the governor and previous comments.
So, Dr. Bruno, in the larger context, it seems irrefutable
that we are in a period where we are in an economy that
requires--is 70 percent consumer-driven. If you don't have
people who are making enough income--and this is one of our
challenges in the Bay Area where, by the way, we get a third of
the venture capital in the United States comes to the
innovative companies in the Bay Area. Our struggle is the cost
of housing and the cost of living there.
And it seems pretty irrefutable that we need to have higher
wages for people to buy tech products and be able to afford to
live there.
So Dr. Bruno, I'd just like to ask you in your last
comment, you said, ``the gradual decline in unionization has
been found to be a driving force in the increase in income
inequality both in the United States and across the world.''
In light of the comments that I made and the need to have a
strong consumer class as your research, Dr. Gould, led you to
believe at a larger level, we need to do some adjusting to the
imbalance of capital markets and what we compensate workers for
in America.
Mr. Bruno. Thank you. It is indisputable that consumer
society is driving our economy. And workers are going to
generate demand. They will generate that demand with the income
that they are able to spend. And as you noted, if 70 percent of
job growth is in a low-wage service sector, these are workers
who are not going to be able to save money, they are not gonna
be able to spend beyond a sort of basic sustenance level.
And you are gonna need some labor market institution that
can aggregate their interest and go into the employment
relationship roughly on an equal balance to negotiate, to
negotiate collectively. Let's not forget, that union is not an
isolated entity. It represents those workers who have freely
chosen that union. They are in that union. Their interests are
collectively brought together. They negotiate on behalf of
those workers.
That is the way in which in 1935, Congress understood that
you could save, if you will, you could protect, you could
promote capitalism, you could promote the free market by
putting money into the pockets of workers who would have a
little bit more negotiating capacity in the workplace.
And, quite frankly, I have looked at thousands of
collective bargaining agreements. They can be very nimble, they
can be very smart, they can address productivity in different
ways, they can problem-solve.
And if I could, in 2003 a study was done that looked at
this productivity question. And just to quote from it, ``the
evidence indicates that in the United States, workplaces with
both high-performance work systems''--and I think that is what
Congressman Allen was experiencing in Georgia, which is
wonderful, ``and union recognition have a higher union
productivity than other workplaces.''
But without the union or bad set of labor relations, keep
in mind that contract helps to settle disputes. You can keep
your most talented workers in that workplace. So I don't
understand how you can build a strong and middle class--and we
have never done it. We haven't built a strong middle class in
this country without an independent, strong robust labor union.
And it is hard to find a similar example in an
industrialized country that is a democracy anywhere in the
world which hasn't had a strong independent labor union.
Mr. DeSaulnier. Thank you, Doctor.
I yield back the remainder of my time.
Chairman Kline. Thank the gentleman.
Mr. Grothman, you are recognized.
Mr. Grothman. I have a couple questions for Dr. Bruno. We
have recently been through rather significant changes in our
labor laws in the state of Wisconsin. And both in the public
sector and private sector. The public sector--the private
sector change is fairly recent. Haven't had time to analyze it.
But at least in the public sector, I can think of a few
examples in which, because you don't have collective
bargaining, individual employees were able to make more. And,
of course, that is because under most labor union contracts,
everybody is treated the same. And if you have one employee who
is more productive than another employee, or you have one
employee whose job is different than another employee but the
labor union tries to put them all in the same box, people are
denied their ability to make what their job would.
How do you justify telling a very productive employee or
perhaps an employee whose job description is a little different
than another employee that they have to have their wages
artificially held down by a union contract that they are forced
to pay to negotiate?
Mr. Bruno. Well, thank you, Congressman. There are a number
of things in your statement and your question. I would note, of
course, that nothing's holding back the employer from offering
to pay people more. They could arrive at a negotiated
settlement in which they do pay people more.
And collective bargaining agreements can have a variety of
different job titles, job occupations that they are doing under
that collective bargaining agreement. That was true in the
steel industry for decades. And those titles had different--
they pay with different levels of pay. In the construction
industry on a large construction site, what that pay is going
to be for the painter or the glazier or for the electrician,
those rates are gonna be set at different levels. So there is
the ability to be nimble in that regard.
But, quite frankly, if, in fact, the union and the employer
are interested in finding ways to make their workers more
productive or benefiting/rewarding those workers because they
want to keep them in that workplace, there are ways that can be
done. The collective bargaining agreement is between the two
parties. And we should let the two parties figure that out.
Mr. Grothman. Well, certainly, Dr. Bruno, you must know
that in mostly every union contract the goal is to treat
everybody the same. I am not saying it is impossible that
someday there is going to be an enlightened union that treats
different employees differently. But, for example, in a school
system there are certainly jobs that are more demanding than
other jobs and in your standard contract both employees are
treated identically. You certainly must know that is the norm.
And as the result, you are holding back some employees who
would naturally make more--from making more because of the
union contract.
Mr. Bruno. What the contract is attempting to do is to make
sure that any employment decisions made are not random or
irrelevant so that people are treated fairly. So there is an
egalitarianism expressed throughout that agreement. I don't
think anybody would disagree that is an important--that is an
important component.
But there is nothing, quite frankly, that is demonstrable
that union contract has somehow withheld earnings from a worker
that could have earned more. The data is quite clear that when
you compare apples to apples, workers in a unionized setting
are earning more than workers in a nonunion setting.
Look at the UAW's contracts now with the big three. They
are actually--look at Ford. Particularly, a new book has just
been released by a colleague. And it is a pretty impressive
story of how to bring an industry back. It is a really good
model. We should look at it.
Mr. Grothman. Okay. I mean, I guess I find it hard to
believe that you don't realize a goal that--maybe it is a good
goal--is that whether you are a better or worse employee, you
are all treated the same. But I am gonna give you one more
question.
In your testimony, you said that corporate decision
makers--surveys of corporate decision makers of right-to-work
laws are not a defining factor in business location. Now, I
believe they are. I have been told that by some business
leaders. Usually, they qualify it by saying I am never gonna
say that publicly. Because of course the unions are very
powerful, and no person is publicly going to say I am putting
my factory in Kentucky rather than Illinois because of a union
situation.
Have you ever done studies of large businesses, maybe large
foreign-owned businesses as they have a chance to choose
whether they are gonna with be in one of the 25 right-to-work
states or 25 states that aren't and seen overall when these
companies, including--and I know there are a couple of
exceptions--including, for example, foreign auto markers, where
they decide to locate and whether or not that is an
overwhelming factor. Because I--
Chairman Kline. I am sorry. The gentleman's time has
expired.
Mr. Grijalva?
Mr. Grijalva. Thank you very much, Mr. Chairman.
And the state that I was born in, live in is a right-to-
work state, Arizona. And from what I have heard today of some
of the comments, I--you know, I guess right-to-work laws are
the panacea for citizen democracy, economic growth, individual
growth, economic growth, as well.
And the fact remains, though, that ongoing and not only in
my state but across this country, there is a very fundamental
economic problem that families are facing in this country. That
is stagnant wages and income inequality across the board.
And let me turn to Dr. Bruno, Dr. Gould. Right-to-work laws
as being promoted today, putting aside the fact that there is
nothing in law that prevents a rule that requires employees if
you are taking the benefit of a grievance representation, then
you should be able to kick in a little bit in terms of a fee
for that representation. There is nothing.
But having said that, income inequality and the right-to-
work law as the salve that is going to take care of this issue,
which continues to persist. One question.
Have either of you--has there ever been any study--because
when we talk about economic growth, I think it is always good
to put another ledger there in terms of the public subsidies
that go into bringing a company into a state--tax relief,
forgiving taxes for 10 years, building the infrastructure--as
an attraction to bring that in and what that public cost is, as
well.
With that, let me--that is the only question--
Mr. Bruno. Well, if I could, I--again, knowing Illinois
maybe a little bit better. At conservative estimate, there are
well over 400 very profitable corporations in Illinois. And
actually, many of them are international companies that pay
zero in taxes or a very, very small percentage. It is millions
of dollars that are not being paid into the public treasury.
And this was a decision made by the state's leaders to create
an incentive for folks to be there.
And this is a right-to-work state--I am sorry. Whoa. This
is a--retract that. This is a collective bargaining state. And
these businesses have been attracted there. And that is just
one of the tools that the state legislature has used.
So I know, particularly in this case, it is millions of
dollars that are not paid into the public treasury. And I
imagine the bet was that having those companies there--and the
vast majority of these companies are working with unionized
employees--that they are actually generating work, they are
generating dollars that is important to the state's overall
economy.
Now, I haven't looked particularly at what the net is
there. But it is considerable in terms of the tax exemption or
the tax expenditure that is happening in Illinois. And I
imagine it is true in most other states.
Mr. Grijalva. Dr. Gould, back to the wage, the income
inequality issue that is persistent and hasn't seemed to move
in a positive direction for quite a while.
Ms. Gould. Yes. Stagnant wages for the vast majority
explains the entirety of the rise of income inequality. Because
the pay productivity gap is clearly incomes going somewhere
else. They are going to wages at the top. They are going to
corporate profits. And so all of these things.
And if you look at states where collective bargaining has
eroded the most, they had the weakest growth in middle class
wages. So those two things are intertwined.
Mr. Grijalva. You know, I mentioned--I asked the question
about the subsidy and the income stagnation that we are seeing
in reference to Arizona. As we attempt to attract and promote
the idea that you can come here because we are a right-to-work
state, also on that same picture, in that same mirror is we are
second lowest in per-people expenditures for education in the
country, lowest for taking care of children in terms of health
care, and lowest in terms of great actual wage growth.
So, you know, when you look in the mirror, it is not always
the picture that has been painted today.
I yield back.
Chairman Kline. Gentleman yields back. Mr. Walberg.
Mr. Walberg. Thank you, Mr. Chairman. And thanks to the
panel for being here.
I would state, Professor Bruno, your slip on Illinois being
a right-to-work state. From your lips to God's ears, I hope.
As a proud son, proud son of Illinois and a former United
Steelworker working at U.S. Steel South Works. And if you know
anything about U.S. Steel South Works, it is no longer there.
The union could not save South Works. Electric furnace where I
worked the, the bop shop, the blast furnaces, the rolling
mills. Now, there are other problems with that, as well. It is
not only the United Auto Workers fault. I understand that.
But in our setting, in Michigan where I live now--and I can
proudly say we are a right-to-work state. And I have colleagues
often ask me, did I remember accurately that Michigan is a
right-to-work--yes, it is. But it is more than that. It is an
employee free-choice state. It is also an employer free-choice
state.
Because like my friend and colleague, Mr. Pocan from
Wisconsin who is a business owner and has union at his
business. Has that choice, as well. My father helped organize
U.S. Steel United Workers there. Proud union member. Until
later years when he said wait a second, we got the things we
needed; working standards, safety, benefits and other things
that are important. But now, let's make sure we keep the jobs,
as well.
And so let me ask you, Governor Ricketts, and thank you for
being here. Why do entrepreneurs and start-up companies value
right-to-work legislation?
Governor Ricketts. One of the things that start up
companies and entrepreneurs are looking for are making sure
they have access to the best talent. And people who, you know,
they are looking to attract are looking to have choice.
And so I think that, again, when you are talking about
undermining the right-to-work laws, such as the NLRB is talking
about doing right now for Nebraska which, again, in our
constitution. You are making it harder for us to keep those
young people here in Nebraska that would be attracted to these
companies and are start-up companies to be able to create those
jobs.
So to me it gets back to choice and attracting the best
talent available.
Mr. Walberg. Mr. Mix, you know Michigan well from your
efforts on right-to-work legislation for many years there, as
well. The unions weren't able to save General Motors or
Chrysler and the jobs, specifically, of their employees.
But more importantly, in my district where not only do we
have auto plants, but we also have the suppliers. Those little
businesses, some that were unionized, some that weren't, have
had a much more traumatic impact, and they are gone. Some went
to the southern states where they had better opportunity, as
well.
It is frequently stated that employees in right-to-work
states are paid less and receive fewer benefits than similar
employees in states that are not right-to-work. Is that
accurate, Mr. Mix?
Mr. Mix. Absolutely not. In fact, we have evidence from the
AFL-CIO that indicates otherwise. They did a study called the
Interstate Study of Cost of Living Wages. And when they
adjusted for cost of living, what they found was that workers
in right-to-work states had about $1,250 more a year in mean
disposable income than workers in forced unionism states.
It is just not. I mean, these studies don't adjust for cost
of living. In fact, a new study is out about California having
the highest poverty rate of any state in the country when you
adjust for cost of living. There are meaningful comparisons
that need to be made between wages from Utah and New York. If
you do that and you adjust for wages, you find that workers in
right-to-work states are actually better off, with more
disposable income.
Mr. Walberg. Is security of jobs also a part of that
factor?
Mr. Mix. Well, absolutely. Absolutely. You know, it is
interesting. I wish that Congressman Pocan was still here.
Because, you know, he says Wisconsin has been last in job
growth--or tied for last for the last couple years. They have
only been a right-to-work state for two months. I would ask him
to be patient.
On the other front, the idea the metro rider, that guy who
jumps over the fence does it illegally. The worker that is
forced into a cab does it by force. But, the idea of having a
job is important. I mean, 78 percent of all automotive
manufacturing activity in the United States of America now
occurs in right-to-work states. I mean, there is a reason for
that.
Volvo just announced growth in South Carolina; BMW;
Volkswagen in the right-to-work state of Tennessee. Good things
are happening in those states. And good things are happening in
other states, too.
But the idea of allowing individual workers to choose is
really the fundamental issue here. I mean, let's get back to
the basics. Will we as a country force a private organization
to force a worker to pay dues or fees to work?
Mr. Walberg. Can employees pursue their grievances outside
of the procedures in the CBA?
Chairman Kline. The gentleman's time--
Mr. Mix. They cannot. They cannot.
Chairman Kline.--has expired.
Mr. Jeffries.
Mr. Mix.--they can't.
Mr. Jeffries. Thank you, Mr. Chair.
Let me start with Mr. Mix. To the extent that a union in a
right-to-work state collectively bargains a higher wage, the
nonunion employee benefits from that higher wage; correct?
Mr. Mix. That is correct. They are forced to accept that
union as their bargaining agent. That is correct.
Mr. Jeffries. They are forced to accept a higher wage.
To the extent that a union in a right-to-work state
collectively bargains a more robust health care plan, the
nonunion employee benefits from that more robust health care
plan; correct?
Mr. Mix. In your question, the answer is, yes. They are
required to accept that, yes.
Mr. Jeffries. Okay. So and to the extent that a union in a
right-to-work state collectively bargains a strong pension
plan, for instance, the nonunion employee gets the benefit of
that stronger pension plan; correct?
Mr. Mix. The answer to your question is correct because of
the union's monopoly bargaining power that they asked for. They
requested to be the exclusive bargaining agent. And, you know,
they recognize that they can represent only their members.
Mr. Jeffries. Okay. So--
Mr. Mix. In fact, I hold a United Steelworkers brief to the
NLRB in 2007 where they clearly recognize the ability under
federal law to represent their members only. And if you were
union, Congressman, if you could negotiate these benefits,
don't you think workers would want to join you voluntarily?
Absolutely yes.
Mr. Jeffries. Mr. Mix, I have got limited time. So it just
seems to me to be fundamentally unfair if you are concerned
about unfairness that you have a situation where you have
workers make a voluntary decision not to participate in union
membership, not to pay dues, but nonetheless get the benefit of
that union membership. And in the grievance context, all that
is being asked is that a reasonable fee be paid. But let me
move on.
The productivity of the American worker has increased
exponentially over the last 40-plus years; correct?
Mr. Mix. According to the EPI study, that is what I saw--
Mr. Jeffries. In fact, in studies that I have seen, it has
increased since the early 1970s in excess of 275 percent. But
at that same period of time, the wages of the American worker
has largely remained stagnant; correct?
Mr. Mix. I can't really comment. I think that is the
information that was--
Mr. Jeffries. Dr. Gould, is that correct?
Ms. Gould. Yes, that is correct.
Mr. Jeffries. Okay. So Americans are working more
productively, but earning less, correct, Mr. Mix?
Ms. Mix. According to her statistics.
Mr. Jeffries. Okay. No one disagrees with those numbers, by
the way, that I have seen in this institution during the two-
plus years that I have been here.
Now, in America, do you think that there is a right-to-work
for a fair wage and good benefits?
Mr. Mix. I think in a country that is founded on the basic
principle of individual freedom, I think that workers have the
right to negotiate a fair wage for a day's work, for sure. It
is a fundamental piece--it is actually the fertilizer of who we
are as a country; that somebody controls their ability to work.
Mr. Jeffries. And the better-paid workers are actually in
fair share collective bargaining states; correct?
Mr. Mix. I would disagree with that vehemently.
Mr. Jeffries. Dr. Gould, is that correct?
Ms. Gould. Yes, that is correct.
Mr. Jeffries. Okay. Now, you made a statement, Mr. Mix, in
my limited time, that is kind of extraordinary. So I think, let
me just check that I got this correct; that workers in right-
to-work states are better off. Is that your view?
Mr. Mix. That is my statement. Yes, sir.
Mr. Jeffries. Okay. Now, is Tennessee a right-to-work
state?
Mr. Mix. Yes, sir.
Mr. Jeffries. And Tennessee is one of the poorest states in
the union, true?
Mr. Mix. I don't know that to be fact. I can't testify to
that fact.
Mr. Jeffries. Okay. Let me introduce into the record a
table, Table 709, Individuals and Families Below Poverty Level
Number and Rate by State. This is between 2000 and 2009.
According to this document, Tennessee is the tenth-poorest
state in the union.
[The information follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Mix. It is not the poorest state.
Mr. Jeffries. We are gonna get to that.
Mr. Mix. Okay.
Mr. Jeffries. Louisiana is a right-to-work state; correct?
Mr. Mix. Yes, sir.
Mr. Jeffries. And is Louisiana one of the poorest states in
the country?
Mr. Mix. I do not know that.
Mr. Jeffries. It is the eighth poorest state in the
country, according to this document. Is Alabama a right-to-work
state, Mr. Mix?
Mr. Mix. Yes, sir.
Mr. Jeffries. And is Alabama one of the poorest states in
the country?
Mr. Mix. Yes. But it is important to note that Alabama has
a union density higher than many states that do not have right-
to-work laws, sir.
Mr. Jeffries. Okay. And is Arkansas a right-to-work state?
Mr. Mix. Yes, sir.
Mr. Jeffries. Is Arkansas one of the poorest states in the
country?
Mr. Mix. I do not know that to be true.
Mr. Jeffries. It is actually number two. And let's get to
the penultimate question that you anticipated. Is Mississippi a
right-to-work state, sir?
Mr. Mix. Yes, sir.
Mr. Jeffries. And is Mississippi the poorest state in the
union?
Mr. Mix. I believe that your table would indicate that.
Mr. Jeffries. Thank you. I yield back.
Chairman Kline. The gentleman yields back. Mr. Thompson?
Mr. Thompson. Thank you, Chairman.
Mr. Hewitt, what were the factors that led you to believe
your union officers had become unresponsive to your concerns?
And under what circumstances would you financially support a
union?
Mr. Hewitt. In what circumstances would I financially
support? Basically, they were unresponsive because they failed
to communicate with us during the union negotiating process.
They absolutely refused to tell us what was under
consideration. They refused to listen to us as we went forward,
in spite of repeated attempts to request that they do so. So
they were entirely unresponsive and refused to change their
ways in any way, shape, or form. What was the second part of
the question?
Mr. Thompson. My follow-up question was under what
circumstances would you financially support a union?
Mr. Hewitt. I started this by saying that I am not anti-
union. And just because we have the right to not be members, I
am personally going to remain a member and try to work with our
union and to convince them that they need to listen to us; that
if they want to ensure their future, the future of unions in
general, they need to listen to us.
This is the only thing at my disposal to force our card to
force them to, in fact, listen to us. It is not that I don't
want to pay my dues. That has--that couldn't be further from
the truth. The fact is I will happily pay my dues if they, in
fact, are willing to listen to me, to do as we ask them to do,
to consider our perspective and not go off on a tangent and do
whatever it is they want to do for themselves, individually or
for a very small portion of the union membership.
It is not that I would not pay. In fact, the issue at
concern isn't really right-to-work. It is this one little
clause that says if I have a grievance, I want to charge you
for representation during that grievance. Well, all of my
grievances are with the union itself. So you mean to tell me
that I am going to have the pay the union to represent me in my
grievance against themselves? That is just incredibly insane.
Why would I want to do that?
You know, I have pledged to remain a union member. I have
pledged to continue on this fight and to continue to have these
grievances. But my grievances are not with management. My
grievances are with the union itself in their failure to listen
to me, the member and the rest of our members. Those are my
grievances.
And to assume that their representation is valuable or to
assume that it is desired, that is just false. I could pay to
have them stay away. If I had to pay, I would pay someone else
to represent me. But no way would I ever think that it would be
reasonable for you to charge me for them to represent me
against themselves. That is just insane.
Mr. Thompson. Sounds like there may be a little bit of a
bias there if the representation you had to hire was those you
had a grievance with. Thank you, sir.
Mr. Mix, in your testimony you described how the NLRB has
deviated from its original intent; to protect workers against
unfair labor practices and determine whether or not they wish
to be represented by a union.
And aside from the fee-for-grievance method that we have
just illustrated, can you outline some of the intimidation
tactics that are being used in the workplace to pressure
individuals into joining unions? And what can the Federal
Government do to address this problem?
Mr. Mix. Yes, there is lots there. You know, I think this
debate has actually kind of migrated into the debate between
unions and management. And, you know, when we wrote the Labor
Code back in 1935, it was designed to be for employees.
And unfortunately, we are no longer in that mode where the
employees are a party. And even, in fact, all of us tend to
slip into that context of saying this is a battle with union
and management. It is not. The act was designed to protect
individual employees.
And let me just give you a quick example of the NLRB and a
case we just got done with and at a company called NTB Bauer in
Alabama. The workers there decided they wanted to decertify the
union using the rules under the NLRB procedures to do that. In
over two years, they had five different votes to do that. Four
of those votes were won by the employees but challenged by
organized labor. During that whole process, these workers were
still compelled to be represented by that union that they had
thrown out not once, not twice, not three times, but four
times.
This is an act that is being stacked against individual
workers' rights. And that, fundamentally, is where we need to
go back to determine whether or not these issues and these
policies that they are gonna promulgate are favorable to
workers. And I would suggest forcing workers to pay fees to an
organization they did not ask for, did not vote for, did not
want is coercive by nature, and it is clearly violative of the
25 state right-to-work laws.
Chairman Kline. Gentleman's time has expired.
Mr. Takano?
Mr. Takano. Thank you, Mr. Chairman.
My question, Dr. Bruno or Dr. Gould, are either of you
familiar with the role of training, the amount of training that
unions provide to workers, especially in the building trades? I
myself have visited the carpenter's union training facilities,
and they are quite impressive.
Is there any other entity that--for workers, especially in
the construction trades, that finances that level of training?
Mr. Bruno. Absolutely not.
Mr. Takano. I have seen that some nonunion organizations
who oppose, say, project labor agreements at a local level have
said that, you know, that they provide that training as well,
or that these local agreements discriminate against their
workers in terms of their training. I find that to be kind of a
specious claim.
Mr. Bruno. Well, I think you are right to conclude that.
When research has been done that looks at spending that is done
in the joint apprenticeship training programs--again, keep in
mind, these are union and employer-negotiated agreements and
plans, as opposed to plans that are apprenticeship programs
that are set up simply by employers unilaterally in the
nonunion sector.
And you do a dollar-for-dollar value, it isn't even close.
The union sector spends almost the equivalent, if you were to
just measure it, as if it were a university. They would have
actually I believe the sixth largest number of students
involved. And the contribution is in the billions of dollars.
And when you look at the number of workers, when you
compare apprentices in nonunion programs versus union programs,
again, it is light years. Statistically, I am not even sure
what the number would be. There are so many more unionized
apprentices. So it is an embarrassing comparison, actually, for
the non-union construction industry.
Mr. Takano. So at least within this industry that I am--
Mr. Bruno. Correct.
Mr. Takano.--bringing up, and I could speak about other
industries, a tremendous amount of their union resources that--
a lot of it is coming from the dues--is spent on training the
skilled workers through levels of apprenticeships and a greater
mastery.
And something that I don't think people fully fathom or
realize--and I think the American public would really benefit
by actually going to a training center, seeing what happens. I
have seen an entire ramp of a freeway; I had no idea how much
carpentry went into that. And that ramp, the apprentices build
that ramp, tear it down. And I was just amazed at the scale of
the training programs we have.
I also want to talk about, you know, it has been suggested
here that unions were to blame for the demise of the auto
industry in the Midwest. Can you comment on that? I mean, I
recall that period of time of decline, that there were also
some strategic blunders made by some of the executives. During
the time when oil prices were rising, oil shock was happening,
the Japanese introduced a lot smaller cars that the markets
seemed to favor. Mr. Bruno, do you want to respond to that
question?
Mr. Bruno. Yes, thank you. I was hoping for an opportunity.
And I should say, I grew up in a steelworking family in
Youngstown, Ohio. My dad was a steelworker for over three
decades, as were members of my extended family and my
neighbors. And I have written a bit about the steel industry,
for example. And I, you know, am really sensitive to the one
Congressman's experience of having worked in the South Works. I
worked in a steel mill in the summer. It is a much bigger
picture.
Let's talk about trade policy and how the degree in which
policy has impacted and protected industries here, as opposed
to the way European and Asian countries have treated their
industries. Let's talk about currency exchange. Let's talk
about decisions that the big three made, that they have readily
admitted. You don't have to take my word for it. You can look
at people--you can read people who have written about the auto
industry and can talk about how tone deaf they were about the
products that they were constructing.
Mr. Takano. So my time is--so it is a bit hollow to sort of
lay the blame at labor, I would say.
Mr. Bruno. It is incredibly hollow.
Mr. Takano. And Mr. Chairman, I yield back.
Chairman Kline. Gentleman yields back.
Mr. Rokita?
Mr. Rokita. I thank the chairman. I thank the witnesses for
their testimony this morning. I am learning a lot. My first
question is I think is to the governor. Thank you for being
here, especially.
It seemed to me Mr. Bruno's testimony was mostly commenting
on the negative economic effects of right-to-work. And I just
to make sure that if you wanted to respond to any of that with
any of your personal experience or from your state or anywhere
else, I would like to hear it.
Governor Ricketts. Sure. It is just not my experience in
the real world, the practical world, that being a right-to-work
state is a disadvantage. In fact, just the opposite; that being
a right-to-work state was certainly one of the things that--
particularly when I was an executive, as I mentioned before,
that was an important factor about where we were looking to
expand. I think as companies look to see what their options
are, it is an important tool to make sure they have
flexibility. And frankly, that the people that work for them
have flexibility. So I think it is an important thing there.
And if you look at Nebraska, for instance, we have got the
lowest unemployment rate in the country, 2.5 percent. As I
mentioned, we have got a high workforce participation rate. We
see a lot of economic things going on in our state that are
very, very good.
Mr. Rokita. Okay. Thank you, Governor.
And switching across the row there to Mr. Mix. Is it safe
to say you are fairly familiar with the construct of the
generic CBA agreement, collective bargaining agreement?
Mr. Mix. Yes. Yes.
Mr. Rokita. Okay. There was some testimony in response to
Congressman Grothman's questioning that I thought indicated
that an employer could give a raise to individual employees
under a collective bargaining agreement. Is that your
understanding, or does that go against the whole nature of a
collective bargaining agreement?
Mr. Mix. Generally, under a collective bargaining
agreement, a monopoly bargaining agreement, an employer would--
it could be an unfair labor practice if you decided to
adjudicate some kind of a pay raise or any kind of a bonus to
an individual employee. That is pretty well known. Yes.
Mr. Rokita. Okay. Thank you. And following along with you,
Mr. Mix, if I understand this right, under the collective
bargaining agreement, the union likes to have sort of a
monopoly over all the employees, whether they are unionized or
in a right-to-work state, for example, nonunionized. And so
they offer this grievance procedure. In fact, you have to go
through this grievance procedure.
And now, of course, the NLRB is saying well, there ought to
be a charge to the nonunion employees for this grievance
procedure. Isn't it possible at least from a legal standpoint
that a union could just decide not to offer the grievance
procedure to a nonunionized employee in the collective
bargaining agreement?
Mr. Mix. I am sorry. The question again? I didn't quite
hear that question.
Mr. Rokita. Yes.
Mr. Mix. Is it--
Mr. Rokita. Yes. So the collective bargaining agreement
structure as I understand it covers all employees for the--
Mr. Mix. Yes, sir.
Mr. Rokita.--union or not.
Mr. Mix. Yes.
Mr. Rokita.--right?
And then now the issue, of course, is the NLRB wants to
charge a fee to the nonunion employees for the grievance
procedure that the CBA covers--
Mr. Mix. That is correct.
Mr. Rokita.--right?
Well, isn't it just as legally possible to have a CBA that
excludes the union employee from the grievance procedure? Isn't
that a way to resolve this?
Mr. Mix. Yes. Yes. In fact, you know, union officials and
actually the former chairman of the National Labor Relations
Board, Bill Gould, he indicated and he understood that federal
law allows union officials to represent members only. And we
are beginning to have that debate in Chattanooga at the
Volkswagen plant down there.
The bottom line is the grievance process is part and
parcel, it is wholly encapsulated by the bargaining agreement.
In fact, it is simply the interpretation of the bargaining
agreement that it is. If you are a nonmember, you didn't vote
on the agreement, you didn't get a chance to because of your
nonmember status--
Mr. Rokita. Right. Right.
Mr. Mix.--in a right-to-work state, but you have to accept
it because of the exclusive bargaining monopoly privilege of
the union.
And so if you have a Venn diagram, you know, where the two
circles intersect, the collective--the grievance process is
entirely within the bargaining circle. It is not outside. It is
not independent. It can't be adjudicated in a way that violates
the contract.
And it is the union that is the final arbitrator of whether
or not it violates the contract. In fact, a worker can't go to
a second step of appeal without the union's permission. And the
union has the right to appeal any adjudication of a grievance
and actually have it voided because it violates the contract.
Those are the facts.
Mr. Rokita. But that doesn't have to be.
Mr. Mix. It doesn't have to be. They could represent their
members only.
Mr. Rokita. In the 30 seconds or so I can't--I don't have
the clock right in front of me, but I see the yellow light.
Tell me more about Chattanooga, what is going on down
there.
Mr. Mix. Yes, in Chattanooga the UAW announced that they
had a majority of workers there and they wanted the company to
accept a card check unionization, meaning we hand you these
cards, you agree that these workers have said they want the
union.
And so they announced publicly that they had a majority.
They couldn't prove it. No one saw them. We actually ended up
representing several employees down there in Tennessee. They
had a secret ballet election. The employees won the election
voting against recognition by the UAW.
The UAW has come back now with what is a member-only
bargaining unit, Local 42. And they want to talk to the
company, they want to talk to the company on behalf of their
members, only their members. Now, ultimately, they are gonna
ask for exclusive bargaining privileges. That is pretty clear
that is where they want to end up. But they recognize the fact
that they can have member-only bargaining there and speak for
them.
Chairman Kline. The gentleman's time has expired.
Ms. Clark?
Ms. Clark. Thank you, Mr. Chairman. And thank you to all
the witnesses who are here today.
My oldest son graduated from high school last Friday. And
as I looked out on that stage with incredible pride as a mom,
but also wondering about the future for these high school grads
and the college graduations that I attended in my district, as
well.
I would describe my home state of Massachusetts as a right-
to-a-fair-shot state. We are a proud union state. We protect
collective bargaining. And I looked at these high school
seniors graduating, going off to make their world in the
workplace or at college. And I thought about what they are
facing; rise of income inequality, a rise of child poverty, and
also a rise of corporate influence and power. Not only in the
board rooms, but in the political process, as well. And I have
to say that I believe this right-to-work is an incredible
misnomer.
But my question is for Dr. Bruno and Dr. Gould, what do you
see the impact for these young people, for the people that we
are trying to attract? And, by the way, I have never talked to
a business that is thinking of leaving Massachusetts who has
ever cited unions as a problem. High cost of housing, high cost
of electricity, those are issues that we need to address. It is
not unionization--that is making us a better and wealthier
communities--that is ever cited as an issue.
But how do you see these issues around health insurance
coverage, pensions, and wages affecting our most recent
graduates?
Ms. Gould. Unfortunately, the class of 2015, the people you
are talking about, those young high school graduates, those
young college graduates, are entering a labor market that has
still had many problems because of the Great Recession and its
aftermath. And so that the wages of those workers are gonna be
probably no higher than the class of 2000. So we have seen
stagnant wages over the last decade and more.
And I think that what we have seen overall over the last 30
years is this decline in unionization, this decline in
collective bargaining, has led to this great divergence between
pay and productivity where young workers starting out, like
workers across the economy, are not getting the wage increases
that they would get if their wages rose with productivity.
Ms. Clark. Thank you.
I yield back.
Chairman Kline. Gentlewoman yields back.
Mr. Hinojosa?
Mr. Hinojosa. Thank you, Chairman Kline and Ranking Member
Scott for holding this important hearing today. And thanks to
all the panelists for your testimony.
In these current economic challenges, I believe that it is
vitally important that our nation protect the rights of
American workers; to achieve this goal, and to be effective, we
must get through the demagoguery and allow the National Labor
Relations Board to do its job.
In many of the questions that have been asked, I can
identify with the concerns that have been asked by my
colleagues on both sides of the aisle. My first question is
going to be to Dr. Elise Gould.
What is the relationship between the rising inequality and
stagnant wages? And what role does the decline in union density
play in the wage stagnation and decline of the middle class?
Ms. Gould. Right. So as I mentioned, unionization declined
precipitously over the last 30 years. We saw the unionization
rate overall go from about 26 percent down to about 13 percent
in the economy. And stagnant wages for the vast majority
explain the entirety of the rise of income inequality because
of that pay productivity gap, that divergence between pay and
productivity.
That means that incomes are going somewhere. They are not
going into wages for typical workers. They are going into the
wages of the top 1 percent, into wages, into corporate profits.
And a lot of this is the result of policy decisions. And for
the most part, the abandonment of full employment policy, both
monetary policy and fiscal policy and efforts that make it
harder to form unions have meant that workers are not getting
higher wages, even though we have a far more productive
economy.
Mr. Hinojosa. My next question would be to Professor Robert
Bruno. Your testimony says that right-to-work can increase the
poverty rate. What is the evidence for this?
Mr. Bruno. A study that we did at the University of
Illinois, and I think one of the congressmen also put into the
record another report that was done.
We took a good look at poverty rates across the country and
correlated those with unionization rates and whether a state
was a right-to-work state or a collective bargaining state. And
what we found when we looked at all of those was that on
average, poverty rates were lower in states that had free
collective bargaining. And that if, in fact, you were to
implement right-to-work in these collective bargaining states,
for example, you would see an increase in poverty.
And we projected that if it were to ever happen--and let's
hope it doesn't in Illinois--that poverty rates would go up by
at least 1 percent, which is actually quite sizable.
Mr. Hinojosa. Next question to Mr. Mark Mix. Mr. Mix, in
your testimony, you state your views of right-to-work. The
question is whether you have provided an imprecise
characterization of that term. Here is what your testimony
says. ``Right-to-work is the simple freedom to choose whether
or not to financially support the labor union that has imposed
its monopoly power over you.''
But section 14(b) of NLRA says something very different;
and I quote, it says, ``Nothing authorizes the execution or
application of agreements requiring membership in a labor
organization as condition of employment in any state or
territory where the state or territory prohibits such
agreement.''
So your description of right-to-work seems to overlook what
we think is a key qualifier; mainly, section 14(b) of the NLRA,
which allows states to pass laws that bar union dues as a
condition of employment.
Mr. Mix, isn't it the case that the first condition of
employment is, indeed, a key qualifier?
Mr. Mix. Congressman, if I understand the question, what I
would say is that section 14(b) allows states to authorize
right-to-work laws and control union security agreements. And
it has been the history for the last 60 years, both at the
Supreme Court level, the federal court level, and since 1953 at
the National Labor Relations Board, to say that the forced
payment of a grievance fee in a right-to-work state is--you
can't do it under section 14(b) of the Taft-Hartley Act. The
Supreme Court has said that, the federal courts have said that.
And that is what the NLRB has said.
And that is why we are here today, because ultimately, what
we are gonna find is that when this rule comes out, we fully
expect that the National Labor Relations Board position will be
that they will not deem it a violation if a union decides to
file--to charge a worker fees for a grievance. And I think that
is the record in the courts going back to the Emporium case
where, in the plumbers case from the D.C. circuit that said,
you know, you can't do this. I think the litigation record and
the record of the court is pretty clear. And I don't think that
has been really in dispute here today.
Chairman Kline. The gentleman's time has expired. I see
that we have crossed the magic 12:00 timeframe, so we are
drawing to a close. I would like to recognize Mr. Scott for any
of his closing comments.
Mr. Scott. Thank you, Mr. Chairman. And I thank the
witnesses for their testimony.
It is clear that everybody benefits when you have strong
unions, higher wages, less inequality. It is better for the
economy. And under right-to-work, those who are not members,
not contributing anything to the dues get the same union
representation without paying that those who have actually paid
for the benefits; that is in higher wages, job security,
pension, safe workplace. They get all the benefits that--paid
for by members. They get to be freeloaders.
This extends to the individual representation at a
grievance. And the question before the NLRB is whether it
should be illegal to require any payment from a nonmember for
the individual representation they get at a grievance. Not the
total cost of the grievance. Just any payment at all, whether
or not that ought to be legal. That case is pending before the
NLRB. They have asked for briefs, and whatever the decision--
whatever decision is made is subject to appeal. So we don't
know what the decision will be or what the final outcome will
be.
But it is clear that some payment ought to be available to
help offset the individualized costs to the union. But we will
have to see.
I yield back.
Chairman Kline. Gentleman yields back. I want to thank the
witnesses. Really good testimony. Thank you for traveling.
Particularly you, Governor. Governor of a state, you are a
very, very busy man. We appreciate you taking the time.
And once again, we had the battle of statistics going on
here. It tells me we have got to look at a lot more--listen to
the testimony of Dr. Bruno and Dr. Gould about the cost to the
state. And then I look at these statistics from the Bureau of
the Census. Again, it says that the rate of welfare recipients
in forced union states is over three times that what it is in
right-to-work states. So it is a study that we are gonna look
at, and it is incumbent upon us to take a look at these things.
It seems clear to me, as I said in my opening remarks, that
the National Labor Relations Board has got a clear agenda of
growing private sector union membership at sort of any cost.
And I disagree with my colleague who said that was kind of
their job, because that is the way this sets up under the
partisan nature of the NLRB, depending upon who is in the White
House. And I dispute that. That is not what the NLRB is for,
that is not what the National Labor Relations Act is for. It
was to make sure that people have a fair say in whether or not
they want to be in a union, whether those elections are
conducted fairly.
That is what the National Labor Relations Board is for. It
is not to push an agenda. It is not to push regulations to
bypass the actions of Congress. So we have some work to do
here.
Again, I want to thank you very, very much for joining us
today. We are very, very grateful. There being no further
business, we are adjourned.
[Additional submissions by Mr. Bruno follow:]
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[Additional submissions by Mr. Hewitt follow:]
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[Whereupon, at 12:18 p.m., the Committee was adjourned.]
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