How Does the WSJ Define "Costly?"
Source Dean Baker
Date 08/05/19/07:18

READERS of the Wall Street Journal might be asking this question after seeing it describe several state-level initiatives being pushed by unions in Colorado as "costly." One of the initiatives would require that before carrying through with layoffs, employers demonstrate that there is "just cause" for the action.

Another initiative would require that firms employing more than 20 people provide workers with health care. The standard view in economics is that benefits like health care come out of wages, not profits.

The article also misrepresents the potential impact of a "right-to-work" initiative, saying that it "would let workers in union shops opt out of the union." Actually. no workers are ever compelled to join a union. Under the National Labor Relations Act, when a union is designated as the representing a specific group of workers, it is legally obligated to represent all the workers in the unit, whether or not they support the union. This means that if a worker is wrongfully fired or is the victim of some other breach of the contract or labor law, the union is obligated to represent the worker's interest, regardless of whether or not the worker supports the union.

In Colorado, as in many other states, unions may sign contracts with employers that require all the workers who it represents to pay a fee to the union for this representation. The initiative discussed in this article would make such contracts illegal, thereby giving workers the option of being represented by the union without paying for this representation. Since the initiative would allow people to benefit from union representation without paying for and does nothing about people's right to work, it can more accurately be described as a "right-to-freeload" initiative.

--Dean Baker

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