Economic Growth and Right-to-Work Laws

September 10, 2013

A study conducted by Michael Hicks and Michael LaFaive of the Mackinac Center examines the impact of right-to-work laws on three measures of economic activity (employment, real personal income and population) from 1947 to 2011.

Hicks and LaFaive find:

  • From 1947 through 1970 (the period immediately following the Taft-Hartley Act), right-to-work laws had very little meaningful statistical impact on overall economic performance in right-to-work states.
  • From 1971 through 1990, when manufacturing employment in the United States began to languish, right-to-work laws demonstrated a statistically significant effect on these measures.
  • Over the course of roughly the last two decades, from 1991 through 2011, right-to-work laws' impact on state economic well-being has moderately slowed, but remains considerable.

These findings suggest that right-to-work laws may have a positive -- at times very positive -- impact on the economic wellbeing of a state and its residents.

  • States with right-to-work laws had higher economic growth rates than they otherwise would have based on the results of a statistical model.
  • Specifically, the average right-to-work state had annual growth rates that were 0.8 percentage points higher for real personal income and 0.5 percentage points higher for population growth.
  • Right-to-work laws boosted average annual employment growth rates by 0.8 percentage points measured from 1970 through 2011.

Source: Michael J. Hicks and Michael LaFaive, "Economic Growth and Right-to-Work Laws," Mackinac Center, 2013.

 

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