Study: Right-to-Work Is Powerful Economic Development Tool

Right-to-Work Cover
The study showed that labor costs in Michigan are second highest in the nation, making the state unattractive to businesses looking to create or relocate jobs here.

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Citizens in states that outlaw compulsory unionism via "right-to-work" laws are enjoying the benefits of greater economic growth and prosperity thanks to their states' higher degree of worker choice and freedom.

That's the major finding of a new Mackinac Center for Public Policy study entitled "The Effect of Right-to-Work Laws on Economic Development" and released in June to Michigan policy-makers, journalists, and business and opinion leaders.

The study, authored by economist and former Comerica Bank vice president Dr. William Wilson, examined economic data from states with right-to-work laws and those without, including Michigan. Wilson found that in nine major economic categories, right-to-work states are either outperforming Michigan or gaining ground steadily.

Right-to-work laws are state statutes or constitutional provisions that ban the practice of requiring union membership or financial support as a condition of employment. Currently, 22 states have such laws on the books, and that fact correlates strongly with robust economic growth.

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"There is compelling evidence that right-to-work laws increase state economic development and overall prosperity," writes Wilson. "Union officials in Michigan claim that forced union membership is necessary to protect the interests of workers, but compulsory unionism just hasn't delivered the goods."

The study shows that from 1978 through 2000, the unemployment rate in Michigan was on average 2.3 percent higher than in right-to-work states. Michigan workers continue to lose ground to their compatriots in right-to-work states in terms of disposable income, and while poverty rates dropped dramatically nationwide over the past 30 years, Michigan was one of seven states, all non-right-to-work, that witnessed an increase in the percentage of residents living in poverty.

"Michigan workers have gone without the ability to decide as individuals whether or not to support a union, and the cost in both freedom and economic growth is substantial," said Director of Labor Policy Robert Hunter. "Michigan needs to have a debate on right-to-work, and we believe this study will open up that debate."