A growing state economy reflects the success of entrepreneurs in developing new businesses or expanding existing ones, creating opportunities for workers in the process. It should not come as a surprise, then, that right-to-work states, with their higher rates of overall growth, show a significant edge in creating jobs.
Between 1970 and 2000 employment grew by an average of 2.9 percent annually in right-to-work states, versus 2.0 percent in non-right-to-work states and 1.5 percent in Michigan. From 2001 to 2006 the rate of employment growth appeared to slow somewhat across the country, but right-to-work states still had a decided advantage, with average annual job growth of 1.2 percent compared to 0.6 percent for non-right-to-work states.
Over the full five-year period from 2001 to 2006, the average right-to-work state increased employment by 6.4 percent, while non-right-to-work states averaged 2.9 percent in job growth. Michigan saw employment decline by 4.8 percent — again, the worst performance in the nation — representing the loss of more than 220,000 jobs. Only three other states lost jobs during this period, non-right-to-work Illinois and Ohio, and right-to-work Louisiana. Aside from Katrina-ravaged Louisiana, the right-to-work state with the worst job-creation record from 2001 to 2006 was Kansas, which managed to increase nonfarm employment by 0.4 percent. If Michigan had merely kept pace with Kansas during that period, the state would have had 238,000 more jobs than it did.