The Missouri General Assembly is now considering a proposal that would make it the nation’s 26th right-to-work state. Missouri’s proposed right-to-work law would prohibit employers from requiring an employee to join or refuse to join a union, pay fees or other charges to a union, or pay any third party or charity instead of paying a union. The authority of states to create these laws was affirmed in Section 14(b) of the Labor Management Relations Act of 1947, better known as the Taft-Hartley Act.
Opponents of right-to-work laws contend they lead to lower wages, hurt unions, and lower people’s standard of living. But states that have enacted right-to-work policies have experienced positive economic progress across the board. A study by the Mackinac Center for Public Policy found, “According to the Bureau of Economic Analysis, right-to-work states showed a 42.6 percent gain in total employment from 1990 to 2011, while non-right-to-work states showed gains of only 18.8 percent.” The study also found inflation-adjusted gross personal income in right-to-work states increased 86.5 percent between 1990 and 2013, versus 51.3 percent for forced-unionization states.
Right-to-work laws have made inroads in states traditionally considered union strongholds, including several Midwestern states. Michigan and Indiana adopted its right-to-work legislation in 2012, and Wisconsin became the newest right-to-work state earlier this year. Support has also grown within the membership of several unions.
During Michigan’s debate over right-to-work legislation, Heritage Foundation Policy Analyst James Sherk noted, “Polling shows a quarter of Michigan’s government employees would opt out of unions under a right-to-work law.”
Using years of economic data and empirical evidence from each state, the 2015 American Legislative Exchange Council’s annual economic competitiveness study, Rich States, Poor States, ranked Missouri 42nd in economic performance and 27th in economic outlook. The study found right-to-work states outperformed their forced-unionization counterparts, providing their citizens with critical economic opportunities and a path to greater prosperity.
Right-to-work laws have positive effects on a state’s economy, creating new jobs and increasing population growth. Missouri lawmakers should strongly consider passing right-to-work legislation in the near future.
Research & Commentary: Right-to-Work Policies
Alex Monahan, government relations coordinator for The Heartland Institute, suggests states that do not have right-to-work policies should consider implementing them. The evidence shows right-to-work has had positive effects on states’ economies, workers, and population growth.
Right-to-Work Increases Jobs and Choices
James Sherk, senior policy analyst in labor economics at The Heritage Foundation, argues states can reduce unemployment and increase investment by adopting right-to-work.
Right-to-Work States Lead Way on Income Growth
Zachary Woodman, a research intern with the Mackinac Center for Public Policy, analyzes government data and concludes that, over the past few decades, right-to-work states have had stronger income growth than forced-unionization states.
Unions Hinder Economic Growth and the Free Market
American Enterprise Institute President Arthur Brooks explains how unions hamper economic growth by limiting freedom in the marketplace. Brooks concludes, “States should seek to pass right-to-work laws as part of reforms to strengthen their economies and enhance economic growth.”
Ten Principles for Improved Business Climates
Maintaining a good business climate has never been more important. Thanks to the Internet, the collapse of communism around the world, and advances in shipping and logistics, capital and labor are much more mobile than in the past. Businesses must bid for customers and workers not only from local competitors but also from businesses in other communities, in other states, and even in other countries. Small changes in taxes, regulations, and other cost-drivers may lead to businesses losing customers and possibly failing or relocating.
Michael LaFaive: Right-to-Work States Have Stronger Growth
The Mackinac Center for Public Policy has studied many decades of data on right-to-work states – where workers don’t have to join a union to hold a job – and has concluded those states enjoy stronger growth in personal incomes, employment, and population. Report coauthor Michael LaFaive of the Mackinac Center discusses the findings of the report in this Heartland podcast.
The Right-to-Freeload Myth
James Sherk, senior policy analyst for labor economics at The Heritage Foundation, examines the misleading characterization of employees who opt out of unions as “freeloaders.”
Economic Growth and Right-to-Work Laws
This study measures the impact of right-to-work laws on state economic performance. It uses average annual growth rates in employment, real (inflation-adjusted) personal income, and population to measure the economic well-being of right-to-work states. The results show right-to-work laws have a statistically significant and economically meaningful positive impact, though results vary.
Right-to-Work Laws: Liberty, Prosperity, and Quality of Life
Economist Richard Vedder documents the positive impact of right-to-work laws. He concludes, “Americans generally prefer freedom to coercion, high incomes to low ones, and individual decision making to collective resolution of issues. For these reasons, they generally do not like laws that constrain their labor market behavior and force them to join collectives of other workers to negotiate their wages and working conditions.”
Rich States, Poor States 2015
The American Legislative Exchange Council (ALEC) released its annual Rich States, Poor States report in April 2014. The report is an economic competitiveness study by economist Dr. Arthur Laffer; Stephen Moore, chief economist at The Heritage Foundation; and Jonathan Williams, director of the Tax and Fiscal Policy Task Force at the American Legislative Exchange Council. The report presents a forward-looking measure of how each state can expect to perform economically based on 15 policy areas that have proven to be the best determinants of economic success.
Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit Budget & Tax News at http://news.heartland.org/fiscal, The Heartland Institute’s website at http://heartland.org, and PolicyBot, Heartland’s free online research database at www.policybot.org.
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