Tuesday, December 11, 2007
More Evidence for the Power of Right to Work Laws
Not that there really needed to be more compelling facts of the positive economic benefits that come from having a Right to Work law, which prohibits compulsory unionism as a condition of employment, but two recent studies demonstrate them quite effectively.
The American Legislative Exchange Council released their Economic Competitiveness Rating of the 50 states and found that factors related to competitiveness—taxes, regulations, government debt, etc.—are driving the location decisions of people and the human capital they possess. In 2006, the Council found that on a daily basis 1,500 people moved from the least competitive states (PA, NY, NJ) to the most competitive states (AZ, TX, FL). One of the most powerful variables the Council found was whether the state had a Right to Work law. The states without such a law had lower rates of employment growth and companies in heavy industry usually avoid putting down roots in those states.
The second study by the Michigan-based Mackinac Institute showed that job growth was higher and unemployment rate was lower in states that were Right to Work. Florida, Kansas, Nevada, Texas, and three others with such a law had higher disposable income than Michigan, and the gap between Michigan and the remaining Right to Work states is closing quickly. The report also pointed out that restrictive labor laws like prevailing wage costs taxpayers additional dollars and that Alabama—a Right to Work state with no prevailing wage—added 5,000 construction jobs between 2001 and 2006 while Michigan, with its resistance to Right to Work and holding onto prevailing wage, lost 26,000 construction jobs over the same time frame.
There are lessons for Pennsylvania here, and we have pointed them out time and again. Expansive government and the taxes and regulations that come with it damper economic freedom and the state is losing the battle to pro-growth states every day.
The American Legislative Exchange Council released their Economic Competitiveness Rating of the 50 states and found that factors related to competitiveness—taxes, regulations, government debt, etc.—are driving the location decisions of people and the human capital they possess. In 2006, the Council found that on a daily basis 1,500 people moved from the least competitive states (PA, NY, NJ) to the most competitive states (AZ, TX, FL). One of the most powerful variables the Council found was whether the state had a Right to Work law. The states without such a law had lower rates of employment growth and companies in heavy industry usually avoid putting down roots in those states.
The second study by the Michigan-based Mackinac Institute showed that job growth was higher and unemployment rate was lower in states that were Right to Work. Florida, Kansas, Nevada, Texas, and three others with such a law had higher disposable income than Michigan, and the gap between Michigan and the remaining Right to Work states is closing quickly. The report also pointed out that restrictive labor laws like prevailing wage costs taxpayers additional dollars and that Alabama—a Right to Work state with no prevailing wage—added 5,000 construction jobs between 2001 and 2006 while Michigan, with its resistance to Right to Work and holding onto prevailing wage, lost 26,000 construction jobs over the same time frame.
There are lessons for Pennsylvania here, and we have pointed them out time and again. Expansive government and the taxes and regulations that come with it damper economic freedom and the state is losing the battle to pro-growth states every day.
