REPORT: PRO Act Carries Significant Economic Impacts For 27 Right-to-Work States

Study shows PRO Act would lead to significant job loss and upend independent contracting and franchise businesses with Arizona, Florida, Georgia, Indiana, Louisiana, Nevada, North Carolina, South Carolina, Tennessee, Texas, and Virginia being impacted the most.

Click here to review the report

Washington, D.C. – A new research study by the American Action Forum (AAF), led by former Director of the Congressional Budget Office Douglas Holtz-Eaki, shows that the Protecting the Right to Organize (PRO) Act would cause significant economic impact for the 27 states currently with right-to-work laws by eliminating those state-enacted laws, forcing reclassification or layoffs of independent contractors and broadening the joint-employer standard.

The report also found that right-to-work states would see their competitive advantage in recruiting businesses eliminated. The 27 states with right-to-work (RTW) protections have nearly a double digit advantage over non-RTW states in recruiting businesses and large employers to their states.

Key findings from the report:

  • Three major PRO Act provisions – repealing right-to-work legislation, reclassifying independent workers as employees, and broadening the joint-employer standard – would bring significant economic costs in an effort to increase union power at the expense of worker freedom and small businesses.
  • Between 2000 and 2015, RTW states saw a 13.3 percent increase in the number of businesses in their states, while non-RTW states only saw 4.1 percent growth in businesses.
  • The PRO Act’s independent worker reclassification provision alone could cost as much as $57 billion nationwide.
  • The PRO Act’s joint-employer changes would cost franchises up to $33.3 billion a year, lead to over 350,000 job losses, and increase lawsuits by 93 percent.
  • State-by-state analysis of these provisions indicate that the right-to-work states that would be most negatively affected by the PRO Act are Arizona, Florida, Georgia, Indiana, Louisiana, Nevada, North Carolina, South Carolina, Tennessee, Texas, and Virginia.

Kristen Swearingen, Chair of the Coalition for a Democratic Workplace (CDW), composed of more than 600 major business and industry groups representing millions of businesses that employ tens of millions of workers nationwide, said the report illustrates the economic upheaval the PRO Act would have on states with right-to-work protections and small and local businesses if passed into law:

“This report shows the crushing economic impact the PRO Act would have on states with right-to-work laws, which have given them a competitive advantage in attracting small businesses, good paying jobs and emerging industries,” stated Swearingen. “Any member of Congress representing a right-to-work state should take a serious pause in supporting the PRO Act as their vote could literally put tens of thousands of their constituents out of work and force thousands of small businesses in their states to close their doors permanently.”

Swearingen went on to say the analysis only scratches the surface in terms of realizing the PRO Act’s full economic and social impact.

“The report doesn’t take into account other social and economic impacts of the PRO Act – from the microeconomic impacts on parents who may work from home as an independent contractor but would have to find a job away from their family and incur new expenses like daycare, travel costs and others to the macroeconomic impacts on state and local economies who will lose their advantage in attracting new businesses and jobs that spur economic growth in their state.”

Click here for more information on the negative impacts of the PRO Act.



About The Coalition for a Democratic Workplace

CDW is a broad-based coalition of hundreds of organizations representing hundreds of thousands of employers and millions of employees in various industries across the country concerned with a long-standing effort by some in the labor movement to make radical changes to the National Labor Relations Act without regard to the severely negative impact they would have on employees, employers, and the economy. CDW was originally formed in 2005 in opposition to the so-called Employee Free Choice Act (EFCA) – a bill similar to the PRO Act – that would have stripped employees of the right to secret ballots in union representation elections and allowed arbitrators to set contract terms regardless of the consequence to workers or businesses.