Right-to-work has minimal impact on manufacturing

January 13, 2012 By Marc Ransford

If the Indiana General Assembly passes a controversial right-to-work (RTW) bill currently being debated, no impact is likely for industrial composition, manufacturing income, employment or wages, says a Ball State University economist.

The findings are based on "Right-to-Work and the ," an analysis by Michael Hicks, director of Ball State's Center for Business and Economic Research (CBER). The study examines RTW regulations in the lower 48 states and District of Columbia from 1929 through 2005.

The special focus is on the effects of RTW legislation on four variables: share of in each state economy, overall size of manufacturing in each state as measured by total incomes, manufacturing employment and manufacturing wages.

"Right-to-work legislation is a politically tactile subject that has far-reaching considerations and motivations," said Hicks, an economics professor. "Just as we found in recent weeks in the Indiana legislature, whatever preconceived notion a group brings to the discussion, they are able to find a supportive theory."

The study does not fully evaluate all industries or aspects of the workplace, and it should not be interpreted as a call for or against an RTW law in Indiana, he emphasized.

Right-to-work laws are enforced in 22 states and are being considered in 14 other states, prohibiting agreements between labor unions and employers that make membership or payment of union dues or fees a condition of employment, which would require the workplace to be a closed shop.  Indiana was an RTW state in 1957 but rescinded private sector regulations in 1965.

The research found extremely mixed results regarding such laws in growing manufacturing shares and total manufacturing.

"One of the major conclusions of our study is that the impact of right-to-work legislation is difficult to disentangle from other business-friendly policies," he said. "However, the more business-friendly a state is at any given time, the more muted the enactment of a RTW law is likely to be. And Indiana has some of the most business-friendly regulations in the country."

The states examined in the study are Florida, Idaho, Iowa, Kansas, Louisiana, Mississippi, South Carolina, Texas, Utah and Wyoming.

The study found states that changed their RTW laws experienced significant variation in their manufacturing sectors, ranging from significant declines (up to 10 percent over a decade) to large gains (up to 40 percent).

Hicks said these results paint an interesting story about the effect of RTW legislation within individual states. In seven of the 10 states, the cumulative 10-year impact of RTW legislation was an increase in inflation-adjusted manufacturing incomes of between 15 percent and 40 percent.

This suggests either a growth in the number of manufacturing jobs in these states, higher for existing manufacturing jobs or both. Interestingly, in all but one state, Wyoming, the impact in the first year was slightly negative, perhaps as evidence that poor economic times precipitated the legislative change, Hicks said.

In Idaho, the cumulative effect over 10 years was an almost 8 percent increase in manufacturing incomes. However, in Iowa and South Carolina, the study found that manufacturing income declined.

On a related note, the 2011 Hoosier Survey, produced by Ball State's Bowen Center for Public Affairs, found mixed opinions on the issue. About 48 percent of respondents were undecided, 27 percent supported the legislation and 24 percent opposed it.

Explore further: Colorado's Tech Industry Loses Some Luster

More information: cms.bsu.edu/Academics/CentersandInstitutes/BBR/CurrentStudiesandPublications.aspx

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1.9 / 5 (9) Jan 13, 2012
The destruction of American Unions is necessary of American Corporations are going to be able to continue to lower American wages to third world levels.

It only makes sense.
1.6 / 5 (13) Jan 13, 2012
So there must be other reasons new auto manufacturing plants are opened in RTW states and why Boeing wanted to build new airplanes in a RTW state.
VW is opening a new factory in TN.
2.6 / 5 (9) Jan 13, 2012
The reasons are self evident. To lower American wages.

"So there must be other reasons new auto manufacturing plants are opened in RTW states" - RyggTard
1.6 / 5 (13) Jan 13, 2012
How many auto companies are setting up manufacturing in Canada?
4.1 / 5 (14) Jan 13, 2012
How many American Jobs have been outsourced to India as a result of Libertarian/Randite free trade policies?

"How many auto companies are setting up manufacturing in Canada?" - RyggTard

Treason, thy ideology is Libertarian.
1.7 / 5 (12) Jan 13, 2012
IF RTW has little impact then why do unions oppose it?

Unions epitomize socialism, coercion is required to keep them in power.

I noticed the study did not look at TN or AL, states which have attracted several auto factories.
1.7 / 5 (11) Jan 13, 2012

This article does not agree.
3.9 / 5 (14) Jan 13, 2012
I suppose workers don't want to be part of an Libertarian promoted economic system in which their wages decline to third world status.

I don't blame them.

"IF RTW has little impact then why do unions oppose it?" - RyggTard
3.9 / 5 (14) Jan 13, 2012
Your article shows how corporations play one state against another to exact economic concessions from the state and it's workforce.

The principle coercive threat used is that unless Americans are made poorer, these worker friendly will make Americans destitute.

And so it is in the collapsing American state. A race to the bottom. Exactly what Libertarians claimed would never happen in America under the Libertarian principles of free trade.

Americans are such suckers.

"This article does not agree." - Libertarian Traitor RyggTard
Infinite Fractal Consciousness
2.3 / 5 (3) Jan 13, 2012
I suggest that those who wish to weaken unions review the history of unions, and how much we had to fight to get them, and why we needed them. You can thank unions for creating the prosperous middle class of the mid-to-late 20th century. Since then, they've been undermined by conservatives.
1.7 / 5 (11) Jan 13, 2012
If unions are so desirable why must the govt force people to join?
3.8 / 5 (13) Jan 14, 2012
Government doesn't force people to join.

Your question includes a presumption that is a lie.

How very Libertarian of you.

"If unions are so desirable why must the govt force people to join?" - RyggTard
3.7 / 5 (3) Jan 14, 2012
"A union shop is a place of employment that requires that an employee join a union, usually 30 to 60 days after being hired. If you cease to be a member of the union, the company is required to fire you. "
The govt forces employers to fire those who do not join the union.
1 / 5 (3) Jan 14, 2012
The govt forces employers to fire those who do not join the union.
Ever hear of contract law? I guess they don't do that in your Somalian randoid utopia.
2.6 / 5 (5) Jan 14, 2012
The govt forces employers to fire those who do not join the union.
Ever hear of contract law? I guess they don't do that in your Somalian randoid utopia.

What does this have to do with anything?
You suggest employers voluntarily sign contracts with unions? In RTW states, they can and do. Some big casinos in NV do. Some don't.
In non-RTW states, employers have NO choice.
2.3 / 5 (3) Jan 15, 2012
"The govt forces employers to fire those who do not join the union." - RyggTard

Why do you feel a need to lie about labor relations RyggTard?

Government doesn't impose such rules on Corporations, they enter into a contractual arrangement with their workers, and are then bound to honor that contract.

Is there even a single day that goes by when you don't sit at home fabricating Libertarian Lies and posting them here?
2.3 / 5 (3) Jan 15, 2012
"You suggest employers voluntarily sign contracts with unions?" - RyggTard

Corporations all over the world do so every day.

What is your IQ? It can't possibly be above 50.

"In non-RTW states, employers have NO choice." - RyggTard

A non stop stream of lies is commonly found streaming from Libertarians and Randites.

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