Right-to-work laws do not boost employment growth in the states in which they
are enacted, a new Economic Policy Institute (EPI) Briefing Paper finds. In fact, Right-to-work laws may actually harm a state’s economic prospects. Does “Right-to-Work” Create Jobs? Answers from Oklahoma by Gordon Lafer and Sylvia Allegretto examines the economic consequences of enacting right-to-work laws and uses Oklahoma as a case study; while most right-to-work laws have been in place for three decades or more, Oklahoma’s law was enacted in 2001. http://epi.3cdn.net/fd70a3db178e318a6c_8um6iihw9.pdf
Right-to-work laws make it illegal for unionized workers to negotiate a contract that requires each employee who enjoys the benefit of the contract to pay his or her share of the costs of negotiating and policing it. In effect, right-to-work laws limit the effectiveness of unions to negotiate higher wages and benefits for their members. Right-to-work laws are in place in 22 states, and state legislatures in states including Indiana and Michigan are currently debating passage of new ones.
Because Oklahoma is the only state to have adopted right-to-work in the current era of globalization, its experience is particularly telling. Does “Right-to-Work” Create Jobs? finds that manufacturing employment in Oklahoma, which increased in the 10 years prior to the enactment of the right-to-work law, fell steadily in the years following it, suggesting that the law had little impact on the state’s manufacturing sector. The right-to-work law in Oklahoma did not buffer it from the country’s employment crisis in 2001-2003 or the Great Recession, either. Compared to the six states that border it, Oklahoma was no better off in terms of its unemployment rate or its rate of job growth in 2010 than it was in 2000, prior to enactment of its right-to-work law. Finally, the number of out-of-state businesses opening plants in Oklahoma decreased following the adoption of right-to-work. Furthermore, more than
160 Oklahoma employers have announced mass layoffs and 100 facilities have closed
since right-to-work was enacted.
Right-to-work laws could in fact have a negative effect on a state’s economy. When weakened unions negotiate contracts with lower wages and fewer benefits, workers spend less on housing, food and other necessities. Wages for non-union workers also decline when right-to-work is adopted, because employers no longer face pressure to match union contract standards. Local and state governments therefore receive less in tax revenues and must cut public services—services that are critical to effective economic development. In addition, the economic sectors that hold the most promise for growth are in construction and service industries rooted in local communities, not those dependent on mobile, lower wage manufacturers.
