A. Gross State Product (GSP)

Gross State Product (GSP), the market value of all goods and services produced in a state, is the broadest measure of a state's economic activity. Chart 3 summarizes average annual real GSP growth rates between RTW states, non-RTW states and Michigan from 1977-1999.

Right-to-work states enjoyed a 0.5 percent annual growth advantage over non-RTW states. This is a considerable growth advantage, particularly when compounded over 23 years.

Dividing the results into two equal time periods (1977-88 and 1988-99, both of which include a recession) to discover any changes in relative growth rates yielded even more distinctions (see Table I, Appendix I). While the average annual growth advantage held by RTW states was just 0.1 percent from 1977-88, it accelerated to 1 percent from 1988-99.

Michigan averaged 1.8 percent growth from 1977-99, growing a little more than half as fast as the average RTW state. Michigan's growth even lagged that of its sister non-RTW states by more than 1 percent annually. Over this period, only three states have grown more slowly than Michigan (Montana at 1.6 percent, West Virginia at 1.3 percent, and Louisiana at 1.4 percent).

While Michigan's annual GSP growth more than doubled during the 1988-99 period, it still lagged behind the GSP growth of the average RTW and non-RTW states by significant margins (Michigan's state ranking increased to 36th). While Michigan's growth did accelerate during this period, that growth was slower than the average growth in RTW and non-RTW states. Only two RTW states (Wyoming and Louisiana) failed to grow as fast.