New Mexico Workers and Industry Would Benefit from Right to Work

Albuquerque Business First reports that New Mexico could become one of the next right-to-work (RTW) battlegrounds depending on upcoming election results, where Republicans could reclaim a majority in the state House.

Union officials reacted to the news by trotting out their usual trite remarks.

In summary, Carter Bundy, AFSCME political and legislative director, says RTW does not impact companies decisions on where to locate. RTW really means a right to work for less. Last, Bundy claims “collective bargaining… ensures that workers aren’t paid unfairly for their work. Removing that ability… would negatively affect workers in the state.”

Addressing Bundy’s last claim first, RTW does take away collective bargaining rights away from workers. Simply, RTW laws prohibit union security clauses, forced union dues payments, from being negotiated into collective bargaining agreements. A far cry from getting rid of collective bargaining rights.

Bundy’s other attacks against RTW purport that the law does not increase wages, contribute to economic growth or influences industry location. My organization, the Competitive Enterprise Institute, produced two reports to refute such bogus claims against RTW laws.

One report, “An Interstate Analysis of Right to Work Laws,” presents the results of an economic analysis of the impact of RTW laws on “state economies, and ranks states’ per capita income loss from not having an RTW law,” while controlling for variables such as population growth, manufacturing, and education level.

The report finds New Mexico employees suffered an estimated $2,638 in per capita income loss because of the lack of RTW law in the state over the duration of the study (1977-2012).

In addition, the analysis indicates industry is attracted to states with RTW laws. For instance, over the 35 year period the study looked at, “nationwide total employment grew by 71 percent. RTW states signficiantly outpaced this average, with emploment growing by 105.3 percent. Non-RTW states lagged behind both, with an employment growth of only 50 percent. More jobs were created in RTW states, despite their having much smaller initial populations and labor force.” (Other studies that support the existence of a positive and significant relationship between RTW and industry location, see here and here.)

Case in point, Tesla recently chose a RTW state, Nevada, to build its new electronic car gigafactory over New Mexico. As the National Right to Work Committee noted, “According to KOAT TV reporting from Albuquerque, N.M., New Mexico’s anti-worker freedom position likely takes them out of the running” for the Tesla factory.

CEI’s second report, “The Unintended Consequences of Collective Bargaining,” examines the negative impact of collective bargaining on worker wages and determines that RTW laws, by mitigating the harmful effects of unionization, are good for the economy.

Specifically, the study finds that, for every additional percentage point in the average unionization variable from 1964-2011, real per capita income was reduced by 1.73 percent. In New Mexico, the average worker experienced a loss of $2,962 in real per capita income because of unions over the time period the study examined.

From the economic analysis presented in CEI’s High Cost of Big Labor series provides hard evidence that unionization hurts workers’ pocketbooks. And one clear way to lessen the harmful impact of unionization is to pass RTW laws.

Moreover, RTW is more popular than ever with the American public. Not surprising since most Americans enjoy the freedom of choice, especially when it comes to their money and job.

In New Mexico, according to a poll conducted by Google Consumer Surveys, 84.7 percent of New Mexicans supported the basic principles of RTW. Nationally, a recent Gallup poll indicates that 71 percent of Americans support RTW.