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Right-to-Work Laws and Venture Capital Investment
Following the enactment of the National Labor Relations Act in 1935, labor unions in the United States gained enormous authority. Unions began negotiating agreements with employers that required all workers to pay union dues even when some workers did not wish to be covered by a union. In 1947, the Taft？Hartley Act reaffirmed states’ constitutional right to establish right-to-work (RTW) laws. Employees in unionized workplaces in RTW states are protected by union-negotiated collective bargaining agreements but are not required to join the union or pay dues. Currently, 26 states have passed RTW laws. Prior research has found that RTW laws increase the attractiveness of a state’s labor force to emerging industries and encourage economic growth. Research has also shown that RTW laws increase employment, innovation, and economic efficiency and reduce corporate borrowing and unions’ bargaining power.
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