What the Boeing Company Teaches about Right to Work
Boeing celebrated the completion of its final assembly plant for the Dreamliner 787 aircraft in North Charleston, South Carolina, today. Boeing’s $1-billion investment and the thousands of jobs created in South Carolina prove one thing: Right to work laws attract businesses and help local economies.
Unfortunately, the Obama administration is trying to stop that from happening. The Boeing plant’s opening comes amidst the controversy spawned by the National Labor Relations Board’s (NLRB) complaint against the aircraft manufacturer. On April 20, the NLRB claimed that Boeing had violated federal labor law by building the Dreamliner in South Carolina, which is a right-to-work state, instead of at its facility in Washington State, which is not.
The NLRB’s complaint is in fact a back-handed compliment to right-to-work laws, because it is based on the assumption that that right-to-work laws help attract businesses. The preponderance of the evidence favors that position.
As Arthur B. Laffer and Stephen Moore recently noted in the Wall Street Journal, from 2000 to 2009 right-to-work states “grew faster in nearly every respect than their union-shop counterparts: 54.6% versus 41.1% in gross state product, 53.3% versus 40.6% in personal income, 11.9% versus 6.1% in population, and 4.1% versus -0.6% in payrolls.”
A recent analysis by the office of Senator Jim DeMint (R-S.C.) shows that right-to-work states created 1.3 million more jobs in the private sector, had 3.5 percent faster income growth, and 46 percent higher business growth than forced union states between 1993 and 2009.
And, according to a recent National Right to Work Committee analysis of Department of Labor data, over the past 10 years, the top five states in creating new jobs are right-to-work states, while the bottom five are forced unionism states. Workers in right-to-work states also have more disposable income than those in forced unionism states.
Yet right-to-work opponents continue to trumpet the tired old line that giving workers a choice on whether to join a union or not hurts the economy. The AFL-CIO maintains that right to work laws “hurt economies and don’t create jobs.” New Hampshire Governor John Lynch (D) recently vetoed a right-to-work bill passed by the state’s legislature saying, “There is no evidence that this legislation will offer any benefits to New Hampshire's economy or workers.”
Someone should tell that to the South Carolinian workers recently hired for well-paying jobs by Boeing thanks to the business friendly environment their state. Yet union leaders seem less concerned with job creation than with institutional self-preservation.
In states that do not have right-to-work protections, unions can require employees to pay dues as a condition of employment. Unions like this compulsory arrangement because it allows them to easily expand their membership, income, and power, without having to sell themselves. This monopoly makes unions less responsive to their members.
In right-to-work states, unions must demonstrate to workers that their service has value or they will refuse to join. As in other areas of the economy, competition makes providers of goods and services—in this case the representation services of labor organizations—more efficient and responsive.
Competition also extends across geographical boundaries, as the shifts in population of recent decades show. Workers and business are voting with their feet. Since 1970, the population in right to work states has more than doubled, while only increasing 25.7 percent in forced unionization states. This substantial gap in population growth is likely attributable to people moving from forced unionization states to right-to-work states because of better job opportunities arising from right-to-work states’ better business environments.
Michigan, where forced unionism is a way of life, is the only state in the nation to have lost population over the past decade, with the City of Detroit by itself losing 25 percent of its residents. Ironically, the economic stagnation that forced unionism policies beget can even hurt unions in the long run, as Michigan’s plight shows. In 1989, 26 percent of Michigan’s workers were unionized. Today, that number is 16.5 percent—and that from a smaller labor pool.
Where are all the jobs going? Senator Lamar Alexander (R-Tenn.) answered that question in a recent GOP weekly address: “After 25 years, non-union Nissan operated the most efficient auto plant in North America.” The Senator continued, saying, “Nissan’s success is one reason Volkswagen last week opened its North American manufacturing plant in Chattanooga and why Honda and Toyota, BMW, Kia Mercedes-Bens, Hyundai and thousands of suppliers have chosen South-Eastern, right-to-work states for their plants.”
Currently, policy makers in three states—Michigan, Maine, and New Hampshire—are considering enacting right-to-work laws. As they ponder their options, they should look at where the jobs are. Workers want more jobs, faster income growth, better job security, and freedom of association—these are all things that right-to-work laws can help achieve.