Chairman White and members of the committee,
My name is Mark MacKenzie and I am the President of the New Hampshire AFL-CIO. We represent over 40,000 union members in the state of New Hampshire in the private, public and federal sectors. We appear today in opposition to House Bill 323.
First of all, it is clear beyond any doubt that based on the economic data alone, this bill is bad policy for our state.
The Economic Policy Institute’s report, Right to Work: Wrong for New Hampshire, by University of Oregon economist Professor Gordon Lafer, found that the impact of adopting a RTW is to lower wages and benefits by about $1,500 per year – for both union and non-union workers – and to lower the odds of getting health insurance or a pension through one’s job, while having no impact at all on job growth.
Professor Lafer’s study was updated in 2012 and will be distributed to the committee today.
I would like to highlight some of the more compelling findings in the report that merits the committee’s attention.
To a large extent, globalization has rendered RTW impotent. In the globalized economy, companies looking for cheap labor are overwhelmingly looking to China or Mexico.
The most important case study for any state considering RTW in 2013 is that of Oklahoma, the only state to have newly adopted RTW in the post-NAFTA era (Indiana and Michigan have just recently implemented their new laws).
When Oklahoma was debating RTW in 2001, a series of corporate location consultants told legislators that the state was being “redlined” because up to 90% of relocating companies “won’t even consider” locating in a non-RTW location. If Oklahoma adopted RTW, these consultants promised, the state would see “eight to ten times as many prospects.”
But instead of growing, the number of new companies coming into Oklahoma has actually fallen by one-third in the eleven years since RTW was adopted. The state’s manufacturing employment has also decreased by 30%, and Oklahoma’s unemployment rate in 2010 was twice as high as when the law was passed. Every promise made by RTW boosters has proven false.
Employer surveys confirm that RTW is not a significant draw; in 2009 manufacturers ranked it fourteenth among factors affecting location decisions. It slipped even lower as a factor in 2011 to 16th.
In addition, the report found that New Hampshire’s economy is far superior to the right-to-work average. New Hampshire has seen significant growth in the number of new companies incorporating in the state, including both local startups and out-of-state companies opening locations in New Hampshire.
Partly due to its economic success, New Hampshire’s quality of life is far superior to that in RTW states. In 2010, New Hampshire ranked among the top 10 states in median household income; share of population with health insurance; share of population receiving dental care; number of primary care physicians; low violent crime rate; and low incidence of heart attacks, strokes, infectious disease, diabetes, low birth weight babies; and occupational fatalities. New Hampshire’s school system performs above national standards, with math and reading scores significantly above the national average in 2009. The median weekly earnings of New Hampshire employees are not only higher than the average of RTW states, but higher than every single one of the RTW states. So too, New Hampshire’s median household income is higher, and its poverty rate lower, than all of the 23 states with right-to-work laws passed before 2011.
For all these reasons, New Hampshire would do far better maintaining our existing system rather than imitating the RTW states.
Over the course of the last two years, significant new information has come to light, all of which confirms the negative impact of RTW legislation.
· A new study by independent economists from the University of Nevada and Claremont McKenna College confirms RTW results in lower wages for non-union workers.
· An Oklahoma corporate think-tank admitted RTW has failed to create jobs. The Oklahoma Council on Public Affairs – a think tank affiliated with the Heritage Foundation, that played a leading role in promoting that state’s 2001 RTW law – now admits that “manufacturing is lower today than it was before RTW.” Furthermore, the same organization reports that Oklahoma has become a net job exporter.
· RTW has been shown to increase construction fatalities. A new study shows that, in addition to its negative impact on wages and benefits, RTW also makes for less safe workplaces, including increased fatalities for construction workers.
· New Hampshire continues to outperform RTW states. As of December 2011, unemployment in New Hampshire was lower than in all but three of the 23 RTW states.
The South Carolina Model:
In the past year, South Carolina has frequently been promoted as a model of economic development due to its RTW law. But at the end of 2012, South Carolina’s unemployment rate was 8.4 percent; While New Hampshire’s was 5.4 percent. South Carolina’s poverty rate is also double that of New Hampshire; while its median income is $23,000 lower. The rate of new business openings was 25 percent faster in New Hampshire than in South Carolina. When it comes to “new economy” firms – the high-tech, high-wage employers that every state seeks – New Hampshire is ranked much higher than South Carolina. By any measure, South Carolina should be trying to figure out how to be more like New Hampshire — not the opposite.
The past two years have also produced evidence that shed light on some misleading claims that had been put forth on behalf of RTW.
Texas’ growth was entirely in the public sector, unrelated to RTW. For the last four years, job growth in Texas has come entirely through government jobs, while the private sector shrank—clearly a trend that cannot be credited to RTW.
Evidence presented as current was actually thirty-five years old. The National Right to Work Committee produced a Powerpoint presentation in 2011 that quotes an executive of Fantus, a site-location firm, warning that “approximately 50 percent of our clients … do not want to consider locations unless they are in right-to-work states”. The Committee neglected to mention that the quote is based on a report from 1975, and that by 1986, the firm’s executive vice president reported that the figure had fallen to 10 percent.
With all this evidence it would seem that those advocating in favor of this bill are actually driven by an Ideological belief system with no real regard for the true impact this bill will have on New Hampshire’s middle class working families and our state’s economic future.
I urge the committee to reject this legislation.
Thank you for your consideration.