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States With Right-To-Work Laws Experience Stronger Economic Growth

August 28, 2013

Do states with right-to-work laws enjoy greater economic growth? According to the Mackinac Center for Public Policy the answer to that question is a definitive “yes”!

Mackinac research scholars Michael Hicks and Michael Lafaive have issued a report on behalf of the nonpartisan firm entitled, Economic Growth and Right-to-Work Laws, which documents that “right-to-work laws have a statistically significant and economically meaningful positive impact” on employment, personal income and economic performance.

RTW laws make it illegal for employers and labor unions to enter into contracts that exclude non-union workers or would force them to join a union as a pre-requisite for hire. In other words, RTW laws allow workers the freedom to decide whether or not they want to be in a union.

Recently, states like Wisconsin and even Michigan, despite its long history of powerful labor unions in the auto industry, have adopted RTW laws as they seek to make their states more welcoming to business.

Hicks and LaFaive’s research looked at economic data in RTW states dating back to 1947 with a particular focus on 3 eras: 1947-1970, 1971-1990 and 1991-2011. Among their key findings:

  • “Right-to-work laws increased average annual employment and real personal income growth by 0.8 percentage points in right-to­-work states.”
  • “From 1971 through 1990…right-to-work laws increased average annual employment and real personal income growth by about 0.9 percentage points and increased average annual population growth by 1.3 percentage points.”

Hicks and LaFaive state that “the study’s findings show that right-to-work laws, on average, cause a one-time, permanent increase in the rate of economic growth in states.”

Of course, other studies have also shown that right-to-work states outperform forced unionization states with respect to economic growth and job creation. (Read more here.)

All the more reason New Jersey should follow the paths taken by states like Wisconsin and Michigan and put an end to the days where workers are not free to opt out of a union and employers are not free to negotiate the proper terms of employment for each individual worker based on their merits.

Click here to read the full report! AFP will also house this report on our Liberty Library!

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