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Michigan to join 'right to work' states. A blow to unions?

Michigan is set to become the 24th state with a 'right to work' law prohibiting unions from collecting fees from nonunion workers. Data on such laws' economic impact are mixed.

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The economic costs and benefits of right-to-work laws have been debated for decades – back to when such laws first were passed in the 1940s.

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“Right-to-work states are much more attractive for businesses investment. Unionized firms earn lower profits, invest less, and create fewer jobs than comparable nonunion firms,” asserts the conservative Heritage Foundation. “Boeing’s decision to build a new plant in South Carolina – a right-to-work state – illustrates a larger trend. Businesses consider the presence (or absence) of a right-to-work law a major factor when deciding where to locate. It was no accident that foreign automobile brands located their U.S. plants primarily in right-to-work states like Alabama, Mississippi, and Tennessee.”

Other studies show the difficulty of clearly proving any positive economic impact of right-to-work laws due to unrelated state policies, demographic trends, and climate.

The left-leaning Economic Policy Institute contends that right-to-work laws “lower wages for union and non-union workers by an average of $1,500 a year and decrease the likelihood employees will get health insurance or pensions through their jobs.”

Institute researchers also note that “seven of the 10 highest-unemployment states are states with right-to-work laws, including Nevada and Florida, which have unemployment rates higher than Michigan’s unemployment rate of 10.5 percent, and South Carolina, which also has an unemployment rate of 10.5 percent. Factors other than right-to-work laws, such as major industries and climate, shape states’ economies.”

Drawing on figures from the BLS, the US Bureau of Economic Analysis, and the Census Bureau, the Detroit Free Press reports:

  • One of the 10 states with the highest per-capita income in 2010 was a right-to-work state.
  • Of the 10 states with the lowest per-capita income, seven have right-to-work laws.
  • Among the 10 fastest-growing states, three are right-to-work states.
  • Among the 10 states with the most residents without health insurance in 2011, six were right-to-work states.

Aside from what he predicts will be a positive economic impact, Snyder stresses the freedom the law will give workers.

“Today in Michigan, workers who choose not to pay union dues can lose their jobs under some union contracts,” he said in a statement accompanying his YouTube message. “In other words, if they want to work, they have to join a union and pay dues, which can amount to 1 to 2 percent of their wages.”

“Under freedom to work, Michiganders will have the freedom to choose whether or not to join a union,” he said. “They won't be forced to pay union dues if they don't want to, and they won't lose their jobs because of it. And if they want to pay dues voluntarily, they have the freedom to do that, too.”

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