Study Finds No Economic Benefit from "Right-to-Work" laws

Michael Wasser, a research intern at American Rights at Work, dismantles the arguments for right-to-work (for less) laws:

Proponents of so-called “right-to-work laws,” such as the U.S. Chamber of Commerce and the National Right to Work Committee, argue that they create a more business-friendly environment and lead to economic growth for states and their residents.

But is that really the case?

As Jack Hough noted in a recent Smart Money article, new research suggests that the supposed economic benefits of right-to-work laws may be little more than useful rhetoric for the law’s supporters. http://www.smartmoney.com/personal-finance/employment/do-labor-unions-hurt-employment/#

Because of a provision added to the National Labor Relations Act in 1947 through the Taft-Hartley amendments, states may pass right-to-work laws. These laws ban agreements stipulating that all employees represented by a union have to pay dues. Right-to-work laws currently are on the books in 22 states.

The new research on the economic effects of these laws comes from Lonnie Stevans, Professor of Information Technology and Quantitative Methods at Hofstra University. He compared the business formation and economic growth of right-to-work states with non-right-to-work states using recent data from the U.S. Small Business Administration. Stevans controlled for variables like education levels, population changes, and type of employment in the states to accurately measure the relationship between right-to-work laws and economic growth. http://www.bepress.com/rle/vol5/iss1/art25/

As the Smart Money article states:

Stevans found that RTW [right-to-work] states had lower per-capita income for workers, but higher income for business owners, than non-RTW states… According to Stevans, there’s little evidence of a ‘trickle down’ of benefits in RTW states from business owners to workers.

He also didn’t find evidence that right-to-work legislation affects the states’ employment rates.

Professor Stevans’s findings cast a pall of doubt over the economic claims of right-to-work supporters. Though their talking points may remain unchanged, the fact is right-to-work laws do not improve the economic viability of states and their workers. And as John Adams once said, “Facts are stubborn things…”

http://americanrightsatwork.org