Braving the cold, more than 100 union members from all corners of the state swarmed the State House plaza this week to urge lawmakers to once again reject right-to-work legislation as they have done at least 30 times over the past four decades. “It’s Groundhog Day again,” was a recurrent refrain when the House Labor, Industrial and Rehabilitative Services Committee held a hearing on HB 238 this week.
All together, 27 states have enacted right-to-work statutes. New Hampshire is among the block of a dozen states east of Indiana and north of Virginia without right-to-work laws. The U.S. Bureau of Labor Statistics reported that in 2022 some 70,000 employees, or 10% of the workforce in New Hampshire, belonged to unions, with public sector employees representing about two-thirds the total.
Right-to-work laws originated with the Taft-Hartley Act of 1947, the federal law that prohibits requiring union membership as a condition of employment and put an end to “closed shops.” At the same time, the law left the choice of whether or not to permit so-called “agency shops ” to the discretion of the states.
In agency shops, employees are not required to join the union or pay membership dues as a condition of their employment. But, unions may collect “agency” or “fair share” fees from those employees who decline to join the union. The fee is confined to defraying the cost of negotiating the collective bargaining agreement, which applies to all employees, and cannot be used to fund political activity undertaken by the union. The fee ensures that employees who shun union membership not become “free riders,” reaping the benefits of the union contract without contributing to the cost of negotiating it.
Right-to-work laws prohibit unions from collecting agency fees. HB 238 stipulates that no person shall be required, as a condition or continuation of employment, to be a member of a union, pay any dues, fees or assessments to a union or make any payment to a third party in lieu of such payments. In 2018, the U.S. Supreme Court prohibited public sector unions from collecting agency fees, effectively limiting the right-to-work issue to the private sector.
Advocates of right-to-work laws present two major arguments, one contending that fees infringe on the rights of employees by charging those who choose not to join a union a fee as a condition of their employment. At the same time, they argue that right-to-work laws foster more business formation, increased employment opportunity, higher wage rates and more robust economic growth.
Much of the testimony in support of the bill was presented by lobbyists speaking for advocacy groups, including the National Right-to-Work Committee, New England Citizens for Right-to-Work, Americans for Prosperity and the Josiah Bartlett Center for Public Policy. As one union member remarked, “Most of the people appearing in favor of this bill are being paid to be here.”
Greg Moore of Americans for Prosperity, an organization funded by the Koch Brothers Foundation, told the committee that in 2011 a number of firms indicated they would relocate to New Hampshire if right-to-work legislation succeeded. For the first time, the Legislature passed the bill but failed to override Governor John Lynch’s veto.
John Kalb, vice-president of the National Right-to-Work Committee, said economic growth in states with right-to-work laws has outpaced that of states without them. Since the pandemic, he said right-to-work states have experienced job growth of 16% compared to the 5% in posted by New Hampshire.
McKayne Boedeker, executive director of New England Citizens for Right-to-Work, cited a report that claimed right-to-work led to increases of $2,900 per person per year, amounting to more than $10,000 per year.
Andrew Cline, president of the Josiah Bartlett Center for Public Policy, referred to a study by researchers at Harvard University, that compared the economic performance of several pairs of counties in neighboring states, one with and the other without right-to-work laws. He said the study found that the right-to-work states outperformed their neighbors by a number of economic indicators, including growth of population, employment, wages and tax revenue while poverty rates declined. He called right-to-work “an unequivocal economic win.”
Lisa Shapiro, chief economist at the law firm of Gallagher, Callahan & Gartrell speaking for the AFL-CIO, told the committee that the most thorough and credible research indicated that “right-to-work lowers wages.” She pointed a study in the Journal of Financial Economics in 2020 that followed 20,000 collective bargaining agreements over 25 years, which found that the pace of wage growth slowed while the pace of executive compensation increased. Likewise, in 2023 the Federal Reserve compared six right-to-work states before and after the adoption of right-to-work laws. The study found what Shapiro called “a slight uptick in employment, but a 4% decrease in median wages.”
John Reynolds, state director of the National Federation of Independent Businesses, representing small firms, said 82% of his members favored right-to-work, which would afford them greater discretion to manage their enterprises. Although the NH Business and Industry Association counts right-to-work among its legislative priorities, it was not represented at the hearing.
However, a number of other businesses openly opposed HB 238. Kim Hokanson, who handles contractor relations for the North Atlantic States Regional Council of Carpenters, read a letter from eight New Hampshire contractors stating that right-to-work would not only adversely impact the operations of their firms but also impair the apprentice and training programs the union provides. She was echoed by Kristen Gowan, her counterpart at the Electrical Contractors Business Association, who stressed the importance of the relationship between its members and the International Brotherhood of Electrical Workers. Both stressed the importance of their partnerships with the unions.
Union officials and members overwhelmingly opposed the bill as the latest in a long line of efforts to weaken the power of unions. Rep. Mark McKenzie (D-Manchester) longtime official and past president of the NH chapter of the AFL-CIO, said it was inappropriate for government to come between two private parties — employers and employees — as they bargain to set the terms of their relationship.
Rep. Thomas Oppel (D-Canaan) spoke even more frankly. “This bill is an attempt to divide and confuse,” he said. “It has nothing to do with real rights and nothing to do with real work. It would simply allow a few to benefit at the expense of others, and it undermines the competitive balance workers seek to achieve through free market collective action.”
The House electronic portal, which tallies votes cast for and against bills, counted 82 votes in favor of HB 238 and 1,415 against it. The Labor, Industrial and Rehabilitative Services Committee is scheduled to vote its recommendation on the bill when next it meets on Tuesday, January 28, at 10 a.m. in Room 307 in the Legislative office building.
