The state of Michigan adopted a right-to-work law in 2012. It became effective in 2013. A right-to-work law prohibits employers — as a condition of employment — from forcing workers to join a union or financially support one through compulsory dues. Right-to-work’s impact on state economic growth ranks high as a subject of interest.
A great deal of research has been done on this topic by Mackinac Center for Public Policy and university scholars over the years. In 2013 the Mackinac Center, for instance, published “Economic Growth and Right-to-Work Laws,” which found, among other items, that from 1947 and through 2011, right-to-work laws boosted inflation-adjusted annual growth in personal income 0.8% points above where it would have been in the absence of the law. That increase may not appear like much, but consider context. If a state’s citizens would have otherwise had a 2.0% annual growth rate and that was increased to 2.8% as a result of a new right-to-work law, it would represent a 40% boost in real personal income over that 65-year period.
Our positive findings are not the only results of their kind. Other scholars writing before and after the passage of Michigan’s right-to-work law have often found broad positive economic consequences from adopting such laws.
We revisit the broad topic of right-to-work laws and their possible economic impact for two reasons. We want to explore if there are positive impacts from adoption of such laws in more recent periods, such as in the post-2000 period when states like Indiana, Michigan, Wisconsin, Kentucky and West Virginia became right-to-work. Secondly, we would like to differentiate the impacts of right-to-work laws on particular industries and explore if the economic benefits of these laws are concentrated in certain industries.
There are some important limitations to this research. Michigan’s law only took effect eight years ago, for example. The impact from adopting a right-to-work law may not appear immediately in economic datasets. There are often lags between when the government or other sources collect and then publish useful data, and there are lags between when a policy goes into effect and when discernible effects become evident in the data. In fact, one scholar asserted that 10 years of data may be needed for estimating effects of right-to-work laws on state economies. Unfortunately, only about six years of data is available to study the impact of right-to-work in states that have recently adopted these laws, such as Indiana and Michigan.