| November 14, 2013

Right to Work Helps Oklahoma Shine

When Indiana and, incredibly, Michigan became Right-to-Work (RTW) states in 2012, it was the first year a state had done so since our home state of Oklahoma passed Right to Work in 2001, giving every Oklahoma employee the choice of paying—or not paying—a labor union as a condition of employment.

Labor-market freedom is a matter of justice, so we would support it whether or not it spurred economic growth. But for years we made the case, in various publications and public forums—including State of the State addresses, during which Gov. Keating was routinely jeered by union members in the gallery—that Right to Work would boost employment (especially in the manufacturing sector) and stimulate economic activity.

A new study from the Fraser Institute, a leading Canadian think tank, suggests this is the case.

In “The Implications of US Worker Choice Laws for British Columbia and Ontario,” Benjamin Zycher, Jason Clemens, and Niels Veldhuis looked at the experiences of RTW states, paying particular attention to Oklahoma (the Indiana and Michigan laws are too new to allow for an analysis of economic effects).

They say that the scholarly literature on RTW is not conclusive, “but the weight of the evidence is strongly suggestive. … The literature, employing a variety of approaches and data sources, generally finds that RTW states enjoy real annual economic growth rates about 0.8% higher than those characterizing non-RTW states, other factors held constant.”

What’s more, a new econometric analysis reported in the Fraser study “finds that RTW laws in the US increase economic growth by about 1.8% and employment by about 1% in the states enacting such laws.” (Writing for the American Enterprise Institute blog shortly after President Obama’s reelection, economist Mark J. Perry noted that, since 2009, RTW states created four times as many jobs as forced-union states—employment growth which, ironically, may have helped Mr. Obama get re-elected.)

As for manufacturing in particular, the authors of the Fraser study say “the scholarly literature finds that RTW laws have the effect of increasing manufacturing employment and output. Oklahoma is a particularly interesting case ... The data suggest that the faster manufacturing growth observed in Oklahoma after 2001 was due, to some substantial degree, to the adoption of a RTW policy.”

None of this comes as a surprise. What this new research shows, we knew instinctively as we argued for Right to Work in Oklahoma in the late 1990s. Business recruiters often told Gov. Keating that many of their clients simply chose to fly over a non-RTW state when seeking a place to invest and expand. Conversely, for others the presence of a strong RTW law was one of a select few “first principle” requirements, along with limited taxation, a rigorous education system to assure a strong workforce, and a modern transportation infrastructure.

One initial decision would pay dividends in the years that followed. We decided to ask the voters of Oklahoma to enshrine Right to Work as an amendment to our state constitution, ensuring that it could not be easily repealed by a future transient legislative whim.

How to convince those voters? Most people have seen the nighttime satellite photos of the Korean peninsula. South of the 38th parallel economically free South Korea glows like a Christmas tree; north of that line, oppressive communist North Korea is abysmally dark.

It so happened that photos comparing north Texas and southern Oklahoma offered a similar contrast prior to 2001. Voters got the message: to turn on the economic lights for all of Oklahoma, we needed to cast a ballot for growth and individual liberty.

The voters did so, and 12 years later the lights have never gleamed so brightly in Oklahoma.

Frank Keating is president and CEO of the American Bankers Association. He served two terms as the 25th governor of Oklahoma. His 30-year career in law enforcement and public service included stints as an FBI agent; U.S. Attorney and state prosecutor; and Oklahoma House and Senate member. He served Presidents Ronald Reagan and George H.W. Bush in the Treasury, Justice, and Housing departments. Keating also is the author of four award-winning children’s books, biographies of Will Rogers, Theodore Roosevelt, George Washington, and Standing Bear.

Brandon Dutcher (M.A. in public policy, M.A. in journalism, Regent University) is senior vice president at OCPA. He’s the editor of the book Oklahoma Policy Blueprint, which was praised by Nobel Prize-winning economist Milton Friedman as “thorough, well-informed, and highly sophisticated.” His articles have appeared in Investor’s Business Daily, WORLD magazine, Tulsa World, The Oklahoman, and more than 190 newspapers throughout Oklahoma and the U.S.

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