Occam's Razor and Right-to-Work

EPI paper tries to bury benefits of right-to-work under a mound of rationalizations

Last week, the pro-union Economic Policy Institute released a report on right-to-work by Gordon Lafer, an associate professor at the University of Oregon's Labor Education and Research Center. Dr. Lafer raised a lot of objections, most of which were trivial, to our claim that right-to-work would benefit Michigan's economy.

First, Dr. Lafer sneers that earlier Mackinac Center research is insufficiently scientific, and says that my paper on the economic effects of right-to-work laws would fail if it were presented as a college thesis paper, mainly, it would appear, because the arithmetic is insufficiently advanced. I used basic, well known economic statistics, and looked at average performance of right-to-work versus non-RTW states. In doing so I followed the practice used by Ph.D. economist Bill Wilson. Dr. Lafer seems to think we should have done a more complex analysis. What he has in mind he doesn't bother to say.

But that doesn't matter, because we are not in one of Dr. Lafer's labor studies courses. Our papers were written for a lay audience, not an academic one, so we used statistics that a layman should be familiar with. Those statistics showed that right-to-work states had a substantial advantage over non-RTW states in both job creation and wage growth going back more than 30 years. Just because the math is relatively simple doesn't mean it's wrong.

Dr. Lafer says he has explanations for our results, but his rationalizations only open up more questions. He argues that economic growth correlates with climate — warmer states seem to be faring better —  but cannot explain how Michigan, which has had been prone to cold winters for millennia, ever prospered. Nor can he explain the current relative prosperity of North Dakota, South Dakota and Nebraska, right-to-work states with the lowest unemployment in the nation according to his own figures. Nor can he explain the suffering of balmy California, a non-right-to-work state with the second-highest unemployment rate in the country. He points to oil reserves in right-to-work Texas, which undeniably have helped that state, but oil is not especially plentiful in Nebraska; nor is it found in great quantities in Iowa or Virginia, RTW states with well-below-average unemployment.

Dr. Lafer can wallow in all the complexities of the modern economy, all the variables that can come into play, and to be fair the economy is complicated and right-to-work states still struggle at times; we've never said otherwise. But over 30 years, right-to-work states have added jobs and seen faster rises in wages. Dr. Lafer can try to bury those facts under an avalanche of rationalizations, but he cannot make them go away. He can call for more rigor, but there's more to rigor than saying "it's complicated" and throwing up your hands and walking away. You need an alternative explanation, something Lafer never really gets around to providing.

In science there is a principle called "Occam's Razor," which says that given a wide range of possible explanations for an observed phenomenon, the simplest is probably the best. I humbly suggest to the esteemed professor that he apply the razor, and concede that maybe right-to-work really does help.