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The following was published on June 7 by Gongwer News Service
Michigan's economic growth has been below the national average for the last 20 years, and at least some of that trend stems from mandatory union membership in union shops, said the Mackinac Center for Public Policy
But union supporters argued the study ignores other factors that have affected the right to work states, mostly in the Southeast, that would also account for the statistics in the reports. And both Democrats and Republicans said the report ignores the political reality that right to work would never pass the current Michigan government.
Of nine economic development indicators the Mackinac Center looked at, only one favored states with mandatory union membership: disposable income. The other indicators-unemployment, gross state product, employment growth, labor costs, income inequity and poverty rate-all favored states that allowed workers to bow out of unions.
The premise of the report, The Effect of Right-to-Work Laws on Economic Development, is that Michigan has missed out on some potential growth by requiring workers in union shops to at least pay collective bargaining fees.
"The state would be unambiguously better if you look at total economic development in the right-to-work states the last 20 years," said William Wilson, author of the study.
Though he said there was not enough information in his findings to show that right-to-work laws were the cause of the economic increase for the 21 states that had them during most of the period of the study, he said the data "shows a marked advantage."
And Mackinac Center Executive Vice President Joseph Lehman said a recent survey showed voters would support the switch. A survey by the National Federation of Independent Business/Michigan showed that 62 percent of voters would support a law "that says no worker can be required to join or pay dues to a labor union to get or keep a job".
The poll, of 405 likely voters by Research 2000 of Rockville, Maryland, with a margin of error of 4.8 percent, was nearly evenly split on partisan lines: 29 percent said they were Democrats, 28 percent said they were Republicans and 30 percent were independents.
"This strong support will make right-to-work a winning issue for many candidates and a real possibility in the coming years," said Charles Owens, NFIB Michigan state director.
"We need to keep taxes low and we need the most flexible labor laws we can have to make it easy for people to provide jobs," Mr. Lehman said is the attitude of the current right-to-work states. "Right-to-work is as much an economic development program as anything else. ... Right-to-work is the single most effective economic development program that Michigan is not doing right now."
The report, based on the U.S. Bureau of Economic Analysis and the Bureau of Labor Statistics, showed that between 1977 and 1999, right-to-work states had average annual gross state product growth of 3.4 percent, while non-right-to-work states grew 2.9 percent. Michigan grew 1.8 percent.
Manufacturing employment in the right-to-work states grew 1.5 percent annually from 1970 to 2000, while in the rest of the states it fell .2 percent and in Michigan it fell .3 percent. "If compulsory unionism drives up labor compensation levels without a commensurate rise in productivity, manufacturers will seek more attractive regions for expansion, leaving non-RTW states with shrinking manufacturing payrolls," the report said.
But Susan Shafer, communications director for Governor John Engler, said Michigan has pushed gains in manufacturing in recent years without pushing out the unions. "We've done that with good tax policy, with a good economic develop program; we've done that with improving the quality of life," she said.
While she did not specifically say whether Mr. Engler would support a right-to-work law, she said it was not something likely to move soon. "It's not something that's come up in the Legislature and it's not something on our agenda," she said.
House Employment Relations, Training and Safety Committee Chair Rep. Clark Bisbee (R-Jackson) said he would support a right-to-work law, but said he did not expect to see the change. "It might be nice," he said, "but we can't even get a vote on living wage. ...I can't imagine it would go vary far."
Ed Sarpolus with the Lansing-based polling firm EPIC-MRA agreed that the poll could have found majority support for right-to-work, but he expected that a question asking whether unions should be eliminated would yield the opposite results. And some of that sentiment, he said, is a shift in the voting population to more educated people who are less likely to be in unionized positions.
Rep. Jack Minore (D-Flint), minority vice chair on the House Employment Relations, Training and Safety Committee, questioned even the correlation between right-to-work and economic development. He argued that most of the states with right-to-work laws are also in regions that had heavy population growth over the last 20 years, and he argued that populations shift had more to do with their growth than whether they allowed employees to opt out of union membership.
"I think they implied causality that doesn't exist," Mr. Minore said.
And Tim Hughes with the Michigan AFL-CIO questioned the effect on the economy of the lower wages and benefits that tend to go along with right-to-work provisions. The union, on its Web site, showed average annual wages in 2000 were $29,233 in the right-to-work states and $35,169 in the non-right-to-work states. The site also showed 73 percent of union workers have health coverage, compared to 51 percent of non-union workers.
The Mackinac Center study agreed with that finding, showing per capita disposable income in 2000 was $22,332 in the right-to-work states, compared to $25,183 in non-right-to-work states and $24,546 in Michigan.
But the study said income was growing faster in the right-to-work states, 6.8 percent per year since 1970 compared to 6.6 percent in the non-right-to-work states and in Michigan.
"Disposable income is growing faster in RTW states because they have a flexible work environment in which employers and employees can more easily respond to market incentives," the report said. "Rigid union-negotiated employee contracts typically have the perverse effect of reducing the pay of the most productive workers while increase compensation for less productive workers."
But how Michigan actually would have fared as a right-to-work is still a question. Mr. Wilson said he had not had time to complete that analysis.
The Mackinac Center for Public Policy is a nonprofit research and educational institute that advances the principles of free markets and limited government. Through our research and education programs, we challenge government overreach and advocate for a free-market approach to public policy that frees people to realize their potential and dreams.
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