There is a very strong correlation between right-to-work laws and job creation. There are a couple of southern states that have lost jobs despite being right-to-work, but those states have major handicaps associated with poorly educated and rural populations.
I think that companies really do not want to have to deal with strong unions, and that right-to -work laws enhance the value of the workforce to the employer. My job creation model uses a 17% enhancement in value, which is equivalent to workers being willing to work for $6000 less than they actually receive in pay.
This is not due to people having to work for less. Given two workforces of equal educational levels and equal pay, the workforce in the right-to-work state is worth a lot more to an employer.
Correlation or Causation?
It is possible I suppose that right-to-work laws are correlated with something else which is responsible for the job growth. However, there is plenty of qualitative evidence that companies favor right-to-work states for expansion. Hyundai built their factories in Alabama. Toyota went for San Antonio for their new pick-up truck plant. BMW went to South Carolina and Mercedes went to Alabama.
Seattle based aircraft maker Boeing is going to great lengths to get away from their unionized, Washington state workforce. Despite having enviable pay and perks, this workforce goes on strike every few years for more money. Management and the union hate each other.
On their new 787 airliner, Boeing outsourced most of the production to factories in Italy, Japan and South Carolina. South Carolina is a right-to-work state. Despite trouble recruiting qualified workers in South Carolina, Boeing is going ahead with a major expansion of that plant. They are putting a final assembly line there, which will allow them to deliver 787s without any of the parts passing through Seattle.
|Boeing hated their union so much, they built this plane to fly wings and fuselages in from elsewhere!!!|
Does right-to-work create jobs or just move them around?
It is certainly possible that right-to-work states are just stealing jobs from union friendly states. However, as the 787 project shows, jobs that leave union-friendly states can always go overseas. I think that both job creation and job shifting are factors in the success of right-to-work states.
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