Study Favorable to Right to Work Laws: Wilson 2001 William Wilson, PhD from the Mackinac Center for Public Policy (headquartered in Michigan) conducted one of the most extensive studies on Right to Work laws to date. He looked at a wide range of state economic statistics from 1970 through 2000, and concluded: “Per-capita disposable income was 0.2 percent higher, on average, in Right to Work states. Michigan’s rate of increase in this category matched the average for other non-RTW states” (Wilson). This is a relatively substantial study, holding up to academic scrutiny, which found higher, but only marginally higher wages in Right to Work states. General and Manufacturing Job Creation: Just by looking at the raw aggregate numbers from the U.S. Bureau of Labor Statistics it is quite clear that more jobs have been created in Right to Work states than in non-RTW states over the past twenty years: “Between 1982 and 2002 the average right-to-work state increased its job rolls by 62 percent. By contrast, the average non-right-to-work states increased jobs by only 42 percent” (Kersey). Only looking at the most recent information, data from 1992 to 2002, the trend continues: Right to Work states’ job creation was 26% whereas non-RTW states’ job creation was only 18% (Kersey). Results from approximately the same twenty-year period for manufacturing jobs paints an even more negative picture for non-RTW states because, instead of a net increase in jobs, non-RTW states have been experiencing a net decrease in jobs. On the other hand, Right to Work states have been experiencing a net increase in jobs COMPANIES’ SITE SELECTION AFFECTED BY RIGHT TO WORK LAWS: The above data on job creation and unemployment rates is interesting, and it does appear that a state’s decision to adopt a Right to Work law may bring jobs and companies to the state. The question is why is this the case. This section focuses on whether businesses consider Right to Work laws as a factor when deciding where to locate. Automaker Plant Locations: According to The Industrial Outlook (2003) all new auto plants built in the United States in the last 10 years were built in Right to Work states (Warden). Their findings were not just for 1 or 2 plants, but for a substantial 6 plants. (Nissan in TN & MS, Mercedes-Benz in AL, BMW in SC, Honda in AL, Hyundai in AL, and Mercedes-Benz in GA). Given the fact that only 22 out of 50 states have Right to Work laws, it appears unlikely that all 6 plants were located in Right to Work states due to chance alone. Therefore, it appears as if foreign automakers may be using a state’s Right to Work law status as a factor in determining plant site selection. This limited example is supported by the findings of the important researchers on Right to Work laws—Tannenwald 1997, Moore 1998, and Holmes 1998—who collectively suggest that “RTW has been positively related to plant location, the rate of business formation, manufacturing employment, and other dimensions of state economic development”(Reed, How Right to Work Laws Affect). Holmes Study Findings: Holmes 1998 study examined changes in the levels of manufacturing activity when one crosses state lines between Right to Work and non-RTW states. He found that “relative manufacturing employment declines by one-third as one moves from within 25 miles of the border in the Right to Work state to within 25 miles of the border in the non-RTW state” (Wilson). He also found that ”eight of the 10 states with the highest manufacturing employment growth rates are [RTW] states. All 10 states with the lowest growth rates are not [RTW] states” (Reed, Does Right to Work Boost). Tannenwald Study Findings: Robert Tannenwald is an economist at the Federal Reserve Bank of Boston. In 1997 he examined what he saw as the most credible studies on Right to Work laws, and concluded in the New England Economic Review: I identified 11 studies that estimate the impact of right-to-work laws on either plant location, the rate of business formation, employment, or some other manifestation of economic development…Eight of them find that the existence of a right-to-work law exerts a positive, statistically significant impact on economic activity. (Reed, Does Right to Work Boost). right-to-work-laws.johnwcooper/
Posted on: Tue, 02 Dec 2014 04:04:22 +0000
Trending Topics
Recently Viewed Topics
© 2015