This paper is an update to Dr. William T. Wilson’s 2002 study, "The Effect of Right to Work Laws on Economic Development."
In that report, Wilson compared right-to-work and non-right-to-work states on basic measurements of economic performance, such as gross state product growth, job creation and per-capita disposable income between 1970 and 2000. Wilson found that right-to-work states had significant advantages in economic growth and job creation. While incomes were still somewhat lower in right-to-work states, incomes were also growing faster in those states. Michigan, on nearly every economic measurement, had lagged behind.
This paper picks up where Wilson’s study left off, tracking the same measurements from 2001 to 2006. We find that little has changed — if anything the apparent advantages of right-to-work states have grown larger. The economies of right-to-work states grew by an average of 3.4 percent compared to 2.6 percent for non-right-to-work states and 0.7 percent for Michigan. Jobs grew by 1.2 percent annually in right-to-work states, compared to 0.6 percent for non-right-to-work states, while jobs decreased by an average of 0.8 percent in Michigan.
Meanwhile, the gap in per-capita disposable income continues to shrink, to the point where most right-to-work states are likely to have higher incomes than Michigan does within just a few years.
On several measurements, the trends between 2001 and 2006 were more favorable towards right-to-work states than they had been in the period covered by Wilson’s earlier study. In light of Michigan’s current economic difficulties, this leads to the conclusion that the case for making Michigan a right-to-work state has only become stronger.