| December 5, 2012

Citizens not only have a Right to Work; they also have a right to the facts

In November, Michigan voters -- facing what Perspective contributor Pat McGuigan called "the most important state ballot question you've never heard of" -- sensibly declined to enshrine a right to collective bargaining in their state constitution.

Perhaps Michiganders were simply reluctant to change the state constitution -- or perhaps they realized that, while public employee union collective bargaining ostensibly exists to protect workers, it also often disregards what's feasible for taxpayers. It's not fair for public employee unions to -- in essence -- bargain with themselves and leave taxpayers (a.k.a. their employers) without a seat at the negotiating table.

Either way, Michiganders' "no" to Proposition 2 provides reason for all freedom-and-fairness-minded folks in the Great Lakes State to rejoice. Now, some Lansing lawmakers want to provide another reason: In the upcoming legislative session, Republicans, who control the legislature, might very well introduce a bill to make Michigan the 24th "Right to Work" state in the country.

As a reminder, "Right to Work" legislation grants workers the choice whether to join or financially support a union. It seems manifestly unfair to automatically deduct union dues from the paycheck of a worker who never had a say in whether to join the union in the first place. It's so mild and common-sense a reform to grant workers such a say that it's hard to believe "Right to Work" is controversial -- but count on it to cause an uproar.

Republican Gov. Rick Snyder and the Republican majority have just barely begun to consider the move -- but Michigan labor groups have already begun to mislead their members about the effects of "Right to Work" legislation.

The Michigan Education Association recently drew Oklahoma into the accelerating fray, with this choice paragraph on a page of its website headlined "How to voice your opposition to right-to-work legislation":

Proponents of right-to-work would have you believe that middle-class families in states that have passed right-to-work laws would be better off. They’re not. For example, when a right-to-work law passed in Oklahoma, state legislators promised companies would relocate to the state because of it and there would be more jobs available. But 10 years later, jobs fell by 25 percent and the number of companies moving there dropped by 33 percent, according to economist Lawrence Mishel, president of the Economic Policy Institute.

Follow the link at the bottom of the paragraph: It leads to a paper that was written before Oklahoma passed right-to-work legislation. Pretty hard to definitively report the effects of legislation that hasn't even passed -- possible to predict, perhaps, but not report.

To be fair, the Economic Policy Institute did release a study 10 years after passage that purported to show Right to Work has had deleterious effects on Oklahomans and the economy in our state. Specifically, the study claimed that Right to Work failed Oklahomans because manufacturing employment was lower 10 years after passage than it was before Right to Work. To rely on so narrow a view of what is good for Oklahomans (i.e. "What is good for Oklahomans is that manufacturing employment increase"), though, is less than forthcoming about the overall effects of Right to Work. OCPA fellows Scott Moody and Wendy Warcholik explain:

[T]he EPI study did not consider whether Oklahoma’s manufacturing industry may have chosen to boost productivity instead of hiring more workers. Chart 1 shows the growth in Gross Domestic Product (GDP) of the manufacturing industry from 2003 to 2010 using a growth index.2 Oklahoma’s manufacturing GDP has grown 45 percent in that time period, outstripping that of the average manufacturing growth in RTW states (31 percent) and in non-RTW states (22 percent).

This growth in Oklahoma’s manufacturing GDP is a direct result of an increasingly productive workforce. Chart 2 shows the amount of manufacturing GDP per job from 2003 to 2010. In only a few short years, Oklahoma’s productivity growth (67 percent) soon outgrew non-RTW states (55 percent) and in the last few years has even outgrown RTW states (62 percent).

Over the long run, productivity growth is the best way to improve economic performance, for two reasons. First, the higher productivity boosts the spending capacity of businesses and their workers, which filters out to other parts of the economy via “multiplier effects.”3 Second, increased productivity frees scarce labor to pursue other economic activities. After all, the economy is better off today because Bill Gates is running Microsoft and not toiling away in an old-fashioned steel mill.

More broadly, there is other evidence that RTW has been good to Oklahoma’s economy. Simply look at how people are “voting with their feet.” Using data from the Internal Revenue Service, Chart 3 shows the net migration in Oklahoma of households (as proxied by taxpayers), people (as proxied by exemptions), and income (as proxied by Adjusted Gross Income, or AGI) between 1995 and 2008.

Still, we get it: Increased manufacturing productivity and population growth mean little to a union employee who is concerned that Right to Work legislation will eventually mean fewer jobs and lower wages to go around. So, let's home in on the most important facts. After Oklahoma passed Right to Work, the number of jobs in the state grew and wages went up. The specifics:

Despite two recessions, jobs in Oklahoma are up 3.8 percent since 2001 while Michigan, on the other hand, lost 13.8 percent of its jobs during the same time, according to the Bureau of Labor Statistics.


The State Chamber recently reported that Oklahoma’s personal per capita income (PCPI) has grown from $23,517 in 2001 to $35,268 in 2010, a 50 percent growth rate over that period. From 1999 to 2008, Oklahoma had the fourth highest PCPI growth rate in the nation, primarily due to Right to Work.

To paraphrase Daniel Patrick Moynihan and, er, Mitt Romney, the leaders of the Michigan Education Association are entitled to voice their opposition to Right to Work, but they're not entitled to their own facts.

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