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July 26, 2014 at 11:04 am

Vedder Publishes Interstate Analysis of Right to Work Laws

Dr. Richard Vedder, Distinguished Professor Emeritus of Economics at Ohio University, published a study of “An Interstate Analysis of Right to Work Laws” along with co-author Jonathan Robe.

Their article is part of the Competitive Enterprise Institute’s The High Cost of Big Labor series, which analyzes and compares the economic impact of labor policies on the states, including right-to-work and public sector collective bargaining laws. Vedder is also an adjunct scholar with the American Enterprise Institute as well as with the Mackinac Center for Public Policy.

“The evidence is compelling that RTW laws add demonstrably to the material quality of people’s lives. People have been migrating in large numbers from non-RTW states to RTW ones for years. Statistical evidence suggests that economic growth is greater in RTW states. Incomes rise following the passage of RTW laws—even after adjusting for the substantial population growth that those laws also induce. RTW states tend to be vibrant and growing; non-RTW states tend to be stagnant and aging,” they write in their conclusion.

“To be sure, there are exceptions to every rule, and many other factors affect economic growth. Thus, much of New England is relatively prosperous despite the absence of RTW laws—though again, it is worth noting that unions never gained a foothold in the region’s most thriving sectors such as high technology. Nonetheless, even those areas likely would have benefited from such legislation. The evidence suggests that if non-RTW states had adopted RTW laws 35 years ago or so, annual income levels would be perhaps $3,000 per person higher today, with the effect varying somewhat from state to state. Even if that conclusion seriously overstates the results of RTW laws, the true effect is still likely quite substantial.

“Between 1977 and 2010, it seemed as if a delicate political balancing act precluded major legislative changes from occurring. Although public opinion increasingly favored RTW laws, the states without such laws had powerful unions that could exert enough political power to defeat efforts to enact RTW legislation. However, pro-RTW forces were gaining strength during this period. Idaho and Oklahoma adopted RTW laws. Millions of Americans migrated from non-RTW states to RTW states. Union membership has fallen sharply.

“We have now entered a new era. Already, Indiana and Michigan have adopted RTW laws. Several states with sharp declines in union membership located near existing RTW states may adopt such laws in the future—Missouri and Ohio are two possibilities. The day is nearing when a majority of Americans could enjoy the full workplace freedoms that RTW laws accord. Drawing on the preponderance of statistical evidence, most people will find this change a welcome development.”

Read the entire article.

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