NCPA - National Center for Policy Analysis

Right-to-Work Laws Improve Economies

December 9, 2014

Twenty-four states have right-to-work laws, which allow an employee in a unionized workplace to choose not to join a union or pay union dues. In states without right-to-work laws, an employee in a unionized workplace can be forced to pay union dues as a condition of his employment, even if that union donates to political causes with which the employee disagrees.

Besides protecting employees' freedom of association, right-to-work laws are good for state economies. Erin Shannon, director of the Center for Small Business at the Washington Policy Center, explains:

  • It is no coincidence that the top three states for new manufacturing jobs are states with right-to-work protections: Michigan, Texas and Indiana. When looking for a new business location, half of all manufacturers automatically screen out states without right-to-work laws.
  • States with right-to-work protections have seen employment growth over the last 10 years, while employment in states without those protections has fallen. Shannon notes the unemployment rate in right-to-work states is 10 percent lower than the rate in other states.
  • Economic growth rates increase by 11.5 percent due to right-to-work laws, according to a study from the Competitive Enterprise Institute.

Critics of right-to-work laws argue that those states have lower wages. While true, Shannon says that right-to-work states also have lower costs of living, noting that 20 of the top 25 states with the lowest costs of living are right-to-work states. Taking cost of living into account, employees in right-to-work states have higher disposable incomes than employees in other states.

Source: Erin Shannon, "Frequently Asked Questions About Right-to-Work Laws," Washington Policy Center, December 2014. 


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