President Joe Biden recently released his long-awaited American Jobs Plan to rebuild America’s infrastructure. While a small portion of Biden’s plan is focused on upgrading America’s roads and bridges, the plan also calls to enact the anti-worker PRO Act into law. The American Jobs Plan represents a trojan horse that will enhance union power, deny independent contractors the ability to participate in an employment structure they overwhelmingly approve of, and roll back right-to-work provisions that have enabled state economies to prosper.
During his recent speech in Pittsburgh, President Biden called on the U.S. Congress to “ensure all workers have a free and fair choice to join a union by passing the Protecting the Right to Organize (PRO) Act and guarantee union and bargaining rights for public service workers.” Biden’s overt call to pass the PRO Act signals that it will contain the provisions that roll back rights for independent contractors and right-to-work legislation when legislation is ultimately presented to Congress.
Given the likelihood that Biden’s infrastructure plan will go through budget reconciliation and democratic control of both houses of Congress, there is a real chance the harmful PRO Act could become law.
Under the PRO act, state-level right-to-work legislation, which allows workers to decide if they wish to join a union and financially support it, would be invalidated.
Additionally, the PRO act would impose an onerous ABC test that would make it almost impossible for anyone to be classified as an independent contractor.
Under the ABC test, independent contractors would have to show they are “free from control and direction and the service is performed outside of the course of business for the employer.” They would also have to demonstrate they are “engaged in an independently established trade, occupation, profession, or business of the same nature as that involved in the service performed.”
Both provisions of the PRO act would inflict significant harm to the broader U.S. economy at a time when the country's employment numbers are slowly recovering from the COVID-19 pandemic.
Studies have consistently shown that states that implemented right-to-work legislation saw higher private-sector job increases when compared to those that did not enforce right-to-work legislation. A 2018 study by NERA economic consulting found right-to-work states had an unemployment rate that was on average 0.4 percent lower than non-right-to-work states.
The study also found that between 2001 and 2016, these right-to-work states experienced a 26.7 percent increase in private sector employment while non-right-to-work states only saw a 15.4 percent increase. This job creation is caused by private sector companies “who are more inclined to open plants” in states with right-to-work statutes. NERA estimates if non-right-to-work states adopted right-to-work legislation, “approximately 249,000 more people would have been employed.”
For the American workers, the statistics are clear. Right-to-work legislation has provided more jobs for American workers and ensured economic security for millions who would otherwise have been excluded from participating in the labor force. By invalidating right-to-work legislation, the PRO Act would deflate job creation just as the economy is slowly recovering from an unemployment rate of 14.8 percent.
The job-creating powers of right-to-work legislation is reflected in their overall popularity. Opinion polls routinely show that “8-out-of-10 Americans believe it’s wrong to force people to pay” union dues. In February 2020, Americans For Prosperity found 68 percent of Virginia’s workforce supported the state’s right-to-work legislation. The same survey found that 60 percent opposed repealing Virginia’s right-to-work laws. In 2015, the University of Chicago found 62 percent of Wisconsinites supported the state’s right-to-work laws.
Passage of the PRO Act through Biden’s infrastructure proposals would also prevent independent contractors from achieving greater economic security and participating in an employment structure they overwhelmingly approve. Between September 2019 and September 2020, 59 million American’s worked as independent contractors, representing 36 percent of the labor force. Independent contractors also earned $1.2 trillion over the same period. Independent contracting has become so popular that 3 in 10 full-time workers are leaving traditional employment in favor of full-time independent contracting.
Were independent contractors forced to comply with the PRO Act’s ABC test, they would be unable to participate in an employment structure they overwhelmingly approve of and one that has generated additional income and economic security for millions of Americans.
While the Biden administration’s desire to upgrade America’s infrastructure deserves attention, any proposal that passes the PRO Act through the backdoor should be opposed. In its current form, Biden’s infrastructure plan is nothing more than a job trojan horse. To ensure the U.S. economy and American workers can recover from the damage inflicted by the coronavirus pandemic, Congress should work to ensure the PRO Act is stripped from any future infrastructure package.
Edward Longe is a research associate at the American Consumer Institute, a nonprofit educational and research organization. For more information about the Institute, visit www.TheAmericanConsumer.org or follow us on Twitter @ConsumerPal.