US Chamber
US Chamber
Regulatory Reform

Promoting Economic Growth, One State Labor Law at a Time

In May, the U.S. economy added only 38,000 new jobs, the lowest amount added in the past five years. The release of this disappointing jobs report at the beginning of June leaves many wondering what can be done to promote much needed economic growth. The answer to this question lies in the U.S. Chamber of Commerce’s recently released “State Labor Law Reform; Tools for Growth,” a report that discusses policy proposals conducive to a better business environment. Each of the ten policies discussed are already implemented in at least one state and in some cases many different states, eliminating any chance of a successful federal preemption challenge. Some of the main policy points outlined are the following:

  • The right-to-work laws, which are already implemented in 26 different states across the county, give workers the option to opt out of mandatory union membership without losing their jobs.  In 2014, 17 of the top 20 states for businesses had right-to-work laws, highlighting the correlation between the law and a positive business climate.
  • State franchise law reform, a set of laws that have been implemented in eight different states to date. Originally implemented in response to lawsuits due to new collective bargaining requirements, the laws create a clear separation between franchiser and franchisee to prevent improper employment liability upon the franchiser.
  • State preemption of minimum wage and other city ordinances. With the race to increase the minimum wage, add mandatory sick days and additional overtime pay in full swing, states have the option to stop these burdensome regulations before they even start. By preventing a minimum wage increase, states will be able to ensure that entry-level jobs are available for those who need them, such as teenagers and others newly entering the workforce.  Implementing laws that prevent local jurisdictions from adopting these types of costly regulations can greatly help employers and employees alike.

The goal of any state is economic growth, and the key to a healthy growing economy is a positive climate for businesses. The 10 proposals outlined by the U.S. Chamber of commerce are a good start for state legislators. In addition to the information provided by the Chamber of Commerce, ALEC model policies such as the Right-to-Work Act provide states wishing to foster a climate conducive to business success ample resources to do so.


In Depth: Regulatory Reform

In his first inaugural address, Thomas Jefferson said that “the sum of good government” was one “which shall restrain men from injuring one another” and “shall leave them otherwise free to regulate their own pursuits of industry.” Sadly, governments – both federal and state – have ignored this axiom and …

+ Regulatory Reform In Depth