Do Right-to-Work States Economically Outperform Other States?

Several months ago, the International Association of Machinists (IAM) brought a complaint before the Na-tional Labor Relations Review Board (NLRB) against Boeing Aircraft contending that the builder of the 787 Dream-liner engaged in unfair labor practices by announcing that, due to past work stoppages in Washington state, Boeing had decided to produce their newest plane in South Carolina, a right-to-work state.

That is, Boeing’s South Carolina workers are not compelled to join a union and/or pay union dues as they are in Washington. The union petitioned the NLRB to close the $750 million South Carolina plant and force Boeing to manufacture the aircraft at their Washington facility.

From a societal point-of-view, how would a decision in favor of the union likely affect U.S. economic growth? Comparing economic growth rates between the 22 right-to-work states and all other states would provide some insight into this matter.

U.S. Bureau of Economic data show that between 1990 and 2010, right-to-work states experienced much higher median economic performance with 1) Employment growth of 25.9 percent for right-to-work states versus 7.9 percent for all other states. 2) Per capita income growth of 117.8 percent vs. 104.3 percent, 3) Population growth of, 29.0 percent vs. 23.6 percent, 4) Manufacturing employment growth of 84.0 percent vs.19.4 percent, 5) Manufacturing wage per worker growth of 108.7 percent vs. 96.1 percent.

Thus on every economic dimension examined, right-to-work states experienced significantly greater economic performance than non-right-to-work states. While certainly not definitive, comparative economic growth rates indicate that an NLRB decision to force Boeing to move production from South Carolina to Washington would have, other factors unchanged, reduced overall U.S. economic growth.

The NLRB last week dropped the complaint against Boeing after the company reached a settlement with the union after Boeing guaranteed the production of the older 737 aircraft in Washington. Extortion works sometimes. Ernie Goss.