April 01, 2014

Weak Federal Standards and a Patchwork Map of Workers' Rights

by Karla Walter

Existing federal workplace laws are supposed to uphold the rights of Americans on the job. Taken together, these laws should create high standards governing all American workplaces—ensuring that workers enjoy fair wages and decent work standards and are able to join together in unions. But the truth is that a system of very weak federal workplace guarantees and a patchwork of state laws mean that workers’ rights vary considerably based on where they live.

In some areas of the country, states are treating federal workplace standards as a floor and using their power to help ensure that workers’ wages keep up with their increasing productivity and that they have access to collective voice and benefits to allow them to prosper. For example, some state governments are taking action to allow more workers to join together in labor unions to bargain for better wages and benefits, provide workers access to paid sick leave, and raise the state’s minimum wage.

Yet too often, lack of strong federal standards combined with state government inaction or abolition of existing labor standards jeopardize workers’ most basic rights. Only about half of the states have passed comprehensive enabling legislation that allows all state and local government workers the right to bargain collectively, according to Richard Hurd, professor of industrial and labor relations at Cornell University. And, in the 24 states that have taken no action to raise the minimum wage above the federally required level, low-wage workers earn $3.64 less per hour than they did in 1968, accounting for inflation.

Worse, nearly half of all state legislatures have enacted “right-to-work” laws that drive workplace standards lower than basic federal standards by crippling the ability of private-sector unions to effectively bargain on behalf of all the workers they represent.

State governments have tremendous power and responsibility in the American political system. Supreme Court Justice Louis Brandeis described states as laboratories of democracy, where state governments “may try novel social and economic experiments without risk to the rest of the country.”

Indeed, many states are functioning as proving grounds for a variety of progressive workplace policies that allow workers to respond to the changing American economy. In an era when most American children are being raised in either dual-earner families or by a single working parent, paid-leave policies can ensure that working families do not have to go without pay and even risk job loss in order to care for a sick child. And multiple studies have shown that states can raise minimum wages without killing job growth. The federal government should encourage state-level experimentation to raise labor standards and consider replicating what works best.

Just as important, however, the federal government must set and enforce high minimum standards below which no state or local government may fall. Without a floor that guarantees basic protections of workers’ on-the-job rights, far too many American workers are left to fend on their own in an increasingly unequal society.

What This Means for Working Families

Americans support strong workplace standards despite weak federal protections. Eighty percent of Americans would like to see the federal minimum wage raised to more than $10 per hour, according to recent polling from Hart Research Associates. Nearly three in four Americans believe that companies should be required to offer paid sick leave to their employees, according to a HuffPost/YouGov Poll conducted last summer. Finally, most Americans (64 percent), according to the Pew Center for People and the Press, believe that “labor unions are necessary to protect the working person.”

The popularity of strong workplace standards should come as no surprise given that workers do better in states where higher standards exist.

For example, state legislatures can boost millions of working families out of poverty by increasing a state’s minimum wage law above the federal minimum wage of $7.25 per hour. A full-time worker earning this wage would bring home $15,080 per year, roughly $4,700 below the federal poverty level for a family of three.

Currently, 22 states and the District of Columbia have implemented state minimum wages higher than the federal minimum. Washington State currently has the highest minimum wage of $9.32 an hour. Full-time workers earning Washington State’s minimum wage would make approximately $19,386, lifting their wages to just below the poverty threshold for a family of three and significantly boosting their ability to pay for life’s essentials.

These laws also boost wages for more solidly middle-class workers. After increasing wages for low-wage workers, employers feel the need to increase the wages of workers near the minimum wage in order to preserve their relative position. Research from the Political Economy Research Institute at the University of Massachusetts estimates that this spillover effect can increase the share of the workforce affected by the hike by 5 to 10 percentage points.

In a similar way, state policies that ensure more workers exercise their right to collectively bargain don’t just help those in unions, but help the middle class as a whole. Unions make the middle class strong by advocating for workers in the workplace and in the political arena.

The most direct way in which unions strengthen the middle class is by advocating on behalf of their members. Unionized workers are able to negotiate with their employers on a more even playing field. Being in a union substantially increases workers’ wages and significantly improves workers’ likelihood of having pensions and health care coverage, according to research from the Center for Economic and Policy Research. And when union density is sufficiently high, the benefits that unions bargain for can set standards for other employers, which can benefit nonunion workers as well.

Strong unions also provide significant benefits to nonunion workers by encouraging greater participation in politics and by advocating for economic programs that help all working families get ahead. Unions help increase voter participation by enlisting members in registration and “get-out-the-vote” efforts, and they fight to create and defend programs essential to the middle class, such as Social Security, the minimum wage, paid sick leave, and the Affordable Care Act.

Research from the Center for American Progress demonstrates that states with strong unions are more likely to have a strong middle class. To measure this strength, American Progress reviewed the share of total state income taken home by the middle 60 percent of households in 2012—that is, the portion of a state’s economic pie that went to middle-class families. Of the five states with the lowest union membership rates—North Carolina, Arkansas, South Carolina, Mississippi, and Georgia—all had middle classes of below-average strength in 2012. Compare this to the fact that four of the top five union states—Alaska, Hawaii, Washington, and Rhode Island—had middle classes of above-average strength.

Moreover, as labor union strength has diminished nationwide, so too has the relative prosperity of the middle class. The fall in union membership rates since the late 1960s is highly correlated with the decline in the share of the nation’s income going to middle-class families. The middle 60 percent of households took home only 45.7 percent of the nation’s income in 2012, well below the 53.2 percent it received in 1968. At the same time, nationwide union membership fell from 28.3 percent of all workers to a low of 11.3 percent.

Attacks on Public Sector Unions

Despite the fact that strong workplace laws are essential to all middle-class families, basic workplace rights are under attack even in states that have historically provided strong protections for workers.

When Wisconsin Governor Scott Walker effectively repealed collective bargaining rights for nearly all public sector workers in 2011, a state known as a national leader in fighting for workers’ rights rolled back the clock more than 50 years. The American Federation of State, County and Municipal Employees—the largest public sector employees union—was founded in Madison, Wisconsin, in 1936, and Wisconsin was the first state to pass a collective bargaining law for public employees in 1959.

Indeed, Wisconsin is the birthplace of the turn-of-the-century’s Progressive Movement. Innovative state leaders established one of the nation’s first workers’ compensation programs, regulated factory safety, and limited work hours for women and children.

Yet because federal laws do not establish the right of state and local public sector workers to collectively bargain with their employers, Wisconsin’s anti-union leadership was able to abolish protections that had covered these workers for more than half a century.

The right of public sector workers to collectively bargain for better wages and work conditions varies widely by state. According to Professor Hurd, about half of the states have comprehensive collective bargaining laws that cover all public employees, while another quarter have laws that cover a significant portion of the public sector. The rest either have no bargaining for public employees or limit it to a very small group.

Moreover, many other states are chipping away at public sector workers’ rights. Ohio voters were able to defeat a legislative attack on public sector workers’ collective bargaining rights in a referendum. But at least 11 other states were successful in enacting laws restricting government employees’ bargaining rights or ability to collect dues in the years following passage of the Wisconsin restrictions, according to a new report by Dr. Gordon Lafer, of the University of Oregon Labor Education and Research Center.

Worse yet, an imminent Supreme Court decision could cripple states’ ability to allow public employees a voice on the job. In Harris v. Quinn, three anti-union workers in Illinois are challenging a state law that recognizes home-care workers caring for the state’s neediest residents as public employees and establishes their right to form a union after a majority of workers vote to do so. Opponents of the law have also introduced arguments challenging the right of the public employee unions from collecting fees from all the workers that benefit from union representation. Without these requirements, ​ some workers could get a free ride—receiving higher wages and benefits without paying for the cost of negotiating on these matters.

The Supreme Court may affirm lower-court rulings upholding the rights of home-care workers to organize and bargain for fair wages and benefits. Or, it could offer a narrow opinion on whether these workers are indeed public employees, or whether it is appropriate for the state to bargain with these workers. Finally, in a move that could strike a blow to all unionized public employees, the Court could issue a ruling preventing public sector unions from collecting fair-share fees from all represented workers. ​​

These attacks on the collective bargaining rights of public employees pose a significant threat. Today public sector employees account for nearly half of all union members, so any declines in this sector’s ability to form unions and bargain will have a significant impact on total unionization rates. After Wisconsin repealed collective bargaining rights for nearly all public workers, union membership rates among public workers fell by 13 percentage points in just one year—from 50.3 percent to 37.4 percent between 2011 and 2012.

“Right-to-Work” for Less

Paralleling these attacks on public sector workers’ rights, there is renewed state-level activity to chip away at private sector collective bargaining rights. Today almost half of the states have enacted “right-to-work” legislation—one of the most destructive laws affecting private sector unions. Michigan became the 24th state to enact such a law in 2012.

Right-to-work has nothing to do with people being forced to be union members. In states with right-to-work laws, it is illegal for workers and employers to negotiate a contract requiring everyone who benefits from a union contract to pay their fair share of the costs of administering it. In this way, the laws allow some workers to receive the advantages of a union contract—such as higher wages and benefits—without paying any fee associated with negotiating on these matters.

Federal law already guarantees that no one can be forced to be a member of a union or to pay any amount of dues to a political or social cause they don’t support. In states without right-to-work laws, workers covered by a union contract can refuse union membership and pay the costs associated with workplace bargaining rather than the full cost of dues.

Federal labor law did not always permit states to pass right-to-work laws. But a 1947 amendment to private sector bargaining laws essentially relegated federal standards to functioning as a ceiling on workers’ rights and enabled states to pass these laws that prevent workers from enjoying the full benefits of union membership.

These laws weaken unions and thereby hurt workers, the middle class, and local economies. The effect on the average worker—unionized or not—of working in a right-to-work state is to earn approximately $1,500 less per year than a similar worker in a state without such a law, according to a 2011 study by the Economic Policy Institute.

Workers in right-to-work states are also significantly less likely to receive employer-provided health insurance or pensions. Again according to the Economic Policy Institute report—conducted just before Indiana and Michigan enacted right-to-work laws in 2012—if benefits coverage in non-right-to-work states were lowered to the levels of states with these laws, 2 million fewer workers would receive health insurance and 3.8 million fewer workers would receive pensions nationwide.

The Other 93 Percent

Government has a responsibility to protect the rights of nonunion workers to decent pay and work conditions. Union membership rates are at record lows—today about 93 percent of private sector workers are not members of a union. And federal efforts to improve workplace standards for all workers—including minimum wage increases, antidiscrimination reforms, and supports for working families caring for young children and aging parents—are being slowed significantly due to congressional gridlock.

The lack of meaningful federal standards has left a policy void. While some state legislatures are filling this gap with innovative policies that can serve as models for other states and the federal government, others have been chipping away at existing state-level workplace protections. As a result, there is also an increasing divide among nonunion workers in the states when it comes to workplace rights.

State governments in some areas of the country are using their considerable power to institute reforms to ensure that all employers respect the rights of workers. For example, in order to help ensure workers in the state a decent standard of living now and in retirement, California not only enacted legislation to raise the state’s minimum wage to $10 per hour by 2016 but also passed a law to ensure private sector workers have access to a safe retirement savings option at work. At least seven states—Connecticut, Delaware, Hawaii, Maryland, Michigan, Minnesota, and West Virginia—and the District of Columbia have approved legislation to boost the minimum wage this year. And the Vermont legislature has also passed legislation to raise the minimum wage to $10.50 over the next four years, which is expected to be signed into law by Governor Peter Shumlin.

In order to ensure that working families are able to care for young children and aging relatives, New Jersey, California, and Rhode Island have enacted paid family and medical leave programs, while Connecticut provides service workers access to paid sick leave. And 21 states and the District of Columbia have passed legislation to ensure that gay workers cannot be fired based on their sexual orientation.

Some states are even taking steps to allow workers traditionally barred from union membership a collective voice. California and a handful of other states have extended collective bargaining rights to agricultural workers who are not covered by the National Labor Relations Act. Also, Rhode Island is the latest state to allow child-care workers that serve the state’s neediest populations the right to collectively bargain for better wages and benefits.

Unfortunately, many state legislatures are adopting laws that weaken workplace standards for nonunion workers. According to Dr. Gordon Lafer, states passed laws during 2011 and 2012 legislative sessions to restrict the minimum wage, lift child labor restrictions, repeal or restrict rights to sick leave, and make it harder for workers who were discriminated against by their employer to sue.

For example, Maine’s state legislature made it easier for employers to pay workers a subminimum wage by classifying them as disabled, Idaho enacted a law to allow children as young as 12 to work up to 10 hours per week cleaning their schools, and Florida established a statewide ban on cities and counties establishing a local right to paid sick leave.

While bold experimentation by state policymakers has long led to innovations that have propelled our nation forward, it is essential that the federal government adopt high minimum standards that apply to all workers regardless of union status.

Conclusion

In the American federalist system, state governments have significant power. They are empowered to innovate and experiment—hopefully leading to successful policy models that can be replicated by other states and the federal government. This system can work well: State governments are often culturally more accepting of new and untested ideas and are less prone to the gridlock that has currently engulfed our federal system, allowing them to enact and implement new ideas more quickly.

However, workers in California, New York, and Minnesota should not have effectively more rights and a stronger voice at work than workers in Wisconsin, Florida, and Maine. It is the job of the federal government to protect the basic rights of all citizens. In the workplace, this means the right to decent wages, benefits, and work conditions and the right to join together with other workers to collectively bargain.

All Americans deserve a muscular federal system of workplace laws that uphold and enforce their rights on the job. Without a floor that guarantees basic protections of workers’ on-the-job rights, far too many American workers are left to fend on their own in an increasingly unequal society.

Karla Walter

Karla Walter is associate director of the American Worker Project at the Center for American Progress Action Fund.