The Governor of Michigan is set to sign a new Right-To-Work law making Michigan the 24th state to have such a law on its books,. Proponents of these laws say they increase employment within a state by attracting businesses there. True or false?
To check this out, I simply went on line and got a list of the 23 states that already have such laws on their books and compared them to another list of states with the lowest unemployment rates. Not a difficult research project. But one that showed some very interesting things.
Of the 23 states with these laws, just 12, about half, made the list of states with the lowest unemployment rates. However, the seven states with the lowest unemployment rates are also ones with Right-To-Work laws, and nine of 12 with the lowest unemployment rates have R-T-W laws.
Proof these laws attract new businesses and generate jobs? Absolutely not. Looking more closely at why unemployment rates are so low in these now unemployment Right-To-Work states tells a different story.
North Dakota, with the lowest unemployment rate, is experiencing a huge oil and gas boom. R-T-W laws didn’t bring it jobs. Oil and gas did. The next six states with lowest unemployment rates and R-T-W laws on their books are all basically farming and ranching states — Nebraska, South Dakota, Iowa, Utah, Wyoming and Oklahoma. Employers don’t come here for low wages. They come for the soil and the grasslands. The same is true for Kansas, which is 10th on the list. The 12th lowest unemployment rate state, Virginia, gets the bulk of its work from government and defense. R-T-W laws don’t affect either overmuch.
The fact is that not a single state with a traditional large union population is on the list of states with R-T-W laws and low unemployment rates. The closest is Texas, 18th in unemployment ranking, though well behind strongly unionized Minnesota, number 13, with no R-T-W law. In the Upper Midwest manufacturing belt, only Wisconsin makes the top 24 of low unemployment rates (its 24th), and its R-T-W law was passed relatively recently, so it has had no time to effect employment much one way or another.
Right-To-Work laws thus DO NOT attract businesses in any major way. Indeed, an excellent case can be made that these laws hurt small businesses in a major way. Your local restaurants, florists, auto shops, small enterprises of all kinds, depend on local consumption by local consumers who spend more when they have higher union-generated wages. Only large corporations really improve their bottom lines when unions get trashed, and its smaller-sized not larger-sized employers who generate the most jobs in this country.
One other list is worth consulting in considering the effects of R-T-W laws on the overall economy — a list of which states receive the most federal aid per capita. Four out of five of these states (Florida, Louisiana, South Carolina and Virginia) are all R-T-W states. Which might suggest to some people (it does to me) that taxpayers end up having to subsidize the big corporations that get states to pass R-T-W laws — government subsidies to workers not protected by unions.
labor graphic via shutterstock.com