Now that Congress is back at work, leadership should think about two excellent policy moves Kentucky just made and follow suit.
As I explain in my latest Forbes article, Governor Matt Bevin recently signed into law a Right to Work statute and signed out of law the state’s “prevailing wage” statute. Both are sound moves. Right to Work gives employees in unionized operations the freedom to stop paying dues if they no longer think the union is worth it, or because union leaders do things with their money they don’t approve of — and not be fired. In forced-unionism states, if a worker declines to pay the union the money it wants, he or she will usually be fired under the “union security” clause that you find in almost all collective-bargaining contracts. In short, it gives workers the same freedom that other Americans have when dealing with private organizations: Just stop paying. Right to Work seems to have some slight economic impact, since companies are somewhat more apt to invest or expand in RTW states, but I think that’s beside the main point that union membership ought to be a matter of choice, not compulsion.
As for prevailing wage, it’s a law (adopted in quite a few states) that amounts to a legal price-fixing conspiracy. The law fixes the price of labor in government construction contracts at the “prevailing” rate, which means union scale. It protects union construction from being underbid by non-union firms that don’t have to live with inefficient union rules. Now that the law is gone, taxpayers in Kentucky will benefit from lower costs on state construction projects.
Congress could follow Kentucky’s lead. It should pass a national RTW law, and it should repeal the federal prevailing-wage statute, the Davis-Bacon Act. Compulsory unionism, enshrined in the Wagner Act of 1935, and pro-union wage fixing, enshrined in the 1931 Davis-Bacon Act, are special-interest provisions that we should get rid of. The sooner the better.