By Charles Lammam
and Hugh MacIntyre
The Fraser Institute
The North American Free Trade Agreement negotiations have put the spotlight on a number of critical issues, including Canada’s wrong-headed insistence that the U.S. limit workers’ rights to choose to financially support labour unions.
The United States is Canada’s most important trade partner, with the livelihood of many Canadians depending on access to the U.S. market. In light of the prevailing protectionist mood in the U.S., striking a deal that minimizes hurdles to the flow of goods and services across the U.S.-Canadian border is critical.
Yet the Canadian government has made a key misstep in the negotiations by insisting that the U.S. roll back state laws that give workers a choice when it comes to financially supporting unions.
The Canadian delegation wants the U.S. government to pass legislation that would impose on the constitutional ability of states to extend federal labour laws, which allow state governments to pass “right-to-work” laws. These laws actually empower workers by allowing them to choose whether to join or financially support unions.
Rather than pushing the Americans to limit worker choice, Canada should emulate our southern neighbour. Worker choice laws encourage unions to be more accountable to their members. And these laws contribute to a stronger economy and labour market.
Canadian workers can now be required to join a union and pay full union dues as a condition of employment. This is despite the fact that union dues are often spent on activities unrelated to representing workers with their employers – such as political causes that workers may disagree with.
By contrast, the minimum standard in the U.S. is that workers aren’t required to join a union and can only be forced to pay dues related to representation with their employer. Unionized U.S. workers can opt out of dues allocated to political activities, including donations to political parties and causes.
A growing number of U.S. states have expanded on federal law, allowing workers to opt out of paying union dues altogether. Missouri recently became the 28th state to pass a right-to-work law, although implementation is on hold pending a referendum.
The U.S. experience suggests union leaders become more accountable and responsive to their members when workers have more choice. Union leaders must convince workers the union provides value that justifies the cost of dues. Union leaders can’t take the financial support of workers for granted and they have a stronger incentive to be more accountable and responsive to dues-paying workers.
A recent study found that union workers in right-to-work states pay dues that are, on average, 14 to 15 per cent less than union members in states with less worker choice. It also found that salaries of union executives tend to be lower in right-to-work states.
While opponents of worker choice laws argue that they undermine the ability of unions to represent workers, survey results show that unionized workers in right-to-work states are as satisfied with the effectiveness of representation as unionized workers in other states.
And a growing body of research shows worker choice laws lead to stronger labour markets and economies. According to a recent study, from 1977 to 2010, worker choice laws were associated with a 1.8 per cent spike in state-level economic growth and a 1.0 per cent jump in employment levels.
So instead of using NAFTA negotiations to pressure the U.S. into reducing worker choice, Canada should join the growing trend of North American jurisdictions that are giving workers choice.
Charles Lammam is director of fiscal studies and Hugh MacIntyre is a senior policy analyst at the Fraser Institute (www.fraserinstitute.org).
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