RIGHT TO WORK AND ECONOMIC IMPACT WHAT IT MEANS FOR MICHIGAN Dr. Hari Singh Seidman College of Business Grand Valley University INTRODUCTION Lately, there has been significant controversy about how states like Michigan may be losing jobs, and potential economic growth compared to southern states due to the fact that they have more flexible labor markets. This flexibility in labor markets derives mostly from right-to-work (RTW) laws, whereby workers don't have to belong to a union as a pre-condition to work in an auto plant. There is considerable anecdotal evidence about how car manufacturers have gone south for the location of new plants in spite of the availability of skilled labor, the historical advantage, and the economies of agglomeration that Michigan provides for the auto production market. As Fred Barnes (2008) points out, Tennessee attracted a Nissan plant in 1983 which was regarded as a major accomplishment. Since then the states in the southern auto corridor have courted new auto plants aggressively by providing significant incentives to foreign manufacturers. This auto corridor ranging from Texas to South Carolina has become the location for eight foreign auto plants, mostly German, Japanese, and Korean. Several new plants are under construction. Since states in this corridor have enacted right-to-work laws, the amount of unionized workers is relatively low compared to non-right-to-work states. Consequently, the labor markets are much more flexible in terms of work rules, wage costs and other regulations. The main question: How much of this new plant location and job migration can we attribute solely to RTW laws? As always in economics, the question is simple but the answer is quite complicated. Most of the complications arise from two major factors: First, to whom do you ask the question? A think tank which is more towards the right (of the economics ideological spectrum) will have very different answers compared to an official of the UAW. Generally the more reasonable answer is probably somewhere in the middle, but one can swing more towards the right or left of this spectrum depending upon one's prior belief and political ideology. As is most often the case, where you stand (and what you say) depends upon where you sit. Due to these differences, when arguments and empirical results are presented by different persons or organizations, it is important to identify their ideological leanings. Second, the key issue in economic controversies is always the nature and type of controls that are applied in different studies. There are many things that can cause differences in employment and wages across states and regions. What we can attribute solely to RTW really depends upon how well we control for all these other confounding factors. Generally descriptive comparisons based on raw numbers don't indicate much because there are many factors influencing these variables.
LEGAL EVOLUTION OF RTW LAWS A brief history of how RTW laws have evolved might be useful to gain some perspective about the controversy, http://en.wikepedia.org. The legislation that is a major watershed in RTW laws is the Taft-Hartley Act of 1947. Before this act under the National Labor Relations Act of 1935 (Wagner Act), employers and unions could legally have a closed shop. Under closed shop rules, all workers have to be a part of the union as a necessary requirement for employment. Although closed shop rules were not allowed by the Taft-Hartley Act, union shop rules became the new game. These rules are a bit more flexible. All workers have to belong to a union within a minimum period of thirty days after their hire. In a union shop, employees can be fired only because they are not members for nonpayment of dues, not for some other factor that may result in non-membership. More significantly, The Taft-Hartley Act allows individual states to outlaw union shops in their area of control if they choose to do so, (http://en.wikepedia.org). However, local governments or counties don't have the authority under Section 14 (b) of this Act to outlaw union shops. In the 1950s the controversy of the costs and benefits of right-to-work laws was discussed and evaluated by almost every state. Right-to-work laws have been passed by 22 states that are mostly in the south and west regions. When a state enacts right-to-work laws, it prohibits a mandate that you have to belong to a union and pay dues to be employed. Persons who do not pay dues or are not members of a union can derive the same benefits in these right-to-work states. Typically, union membership rates are significantly lower in RTW states. The current controversy about the Employees Free Choice Act (EFCA) advocated by the AFL-CIO goes in the other direction by making it easier to organize a union. Under the proposed EFCA, if more than 50 percent of the workers sign a card to make a union, no secret ballot election is deemed necessary. Under the EFCA the critical threshold for forming a union would be significantly easier. The workers (not the employers) call the shots; they can organize the process towards setting up a secret ballot to form a union. This brief history illustrates that issues about the formation and operation of union activities will continue to generate controversy. Many states have enacted RTW laws. On the other hand, there are proposals to make unions more powerful. Within this context, it is important to analyze the specific impact of RTW laws on overall economic activity. PROS AND CONS OF LAWS Good reasons exist on either side of the RTW controversy as evidenced by the arguments put forth by different advocacy groups. I paraphrase the main arguments for each side and provide some prominent websites where these arguments are made. Ultimately, it depends upon how you weigh each component of these arguments. The reader is encouraged to visit the websites to make up his or her own mind.
Pros of RTW The basic foundation of RTW laws is rooted in the constitutional right of freedom to associate or not to associate with a group. Workers should not be forced to join a union. Forced union dues can be used by union leaders to support different kinds of political agendas and causes that may not necessarily be the priority of the workers. RTW laws make the labor markets more flexible since it is easier to hire workers without mandates, give workers the market wages, and re-assign them to different types of work or schedules. There are no complex work rules that constraint the production process. RTW states typically have more manufacturing jobs due to new plant openings or expansion of old plants. RTW states typically have higher economic growth rates and higher employment rates. Websites that support RTW National Right to Work legal Defense Foundation www.nrtw.org National Institute of Labor Relations Research www.nilrr.org National Right to Work Committee www.nrtwc.org Mackinac Center for Public Policy www.mackinac.org Cons of RTW Could result in free riders: Individuals who get the benefits of the union without paying the dues. There is not much incentive to pay dues. Could result in employers exploiting workers by paying lower wages. RTW states typically have less generous benefits such as health care and pensions plans. Workers have much less job security: They could be fired for trivial reasons. RTW states typically have less safety precautions resulting in more workplace fatalities and injuries. Websites that oppose RTW American Federation of Labor and Congress of Industrial Organizations http://www.aflcio.org The Century Foundation http://www.tcf.org/list.asp?type=nc&pubid=1437 The Michigan AFL-CIO http://www.miaflcio.org ECONOMIC DIFFERENCES BETWEEN STATES One simple way to look at this controversy is to review the economic and business conditions of the RTW states and compare them with the Non-RTW states. Note that these differences in economic and business conditions could also be due to a variety of other factors besides RTW. However, it does give us the first cut.
TABLE 1: Employment and wages in Transportation Equipment Sector (NAICS 336) Auto Industry Employment and Wages, 2002 vs. 2009 2002 Employment 2009 Employment (est) 8-Year Change 8-Year % Change Average Annual Wage 2002 Average Annual Wage 2009 (est) 8-Year Annual Wage % Change Right to work 2009 % union among employed Michigan 292,725 126,952-165,777-56.6% $63,075 $74,498 18.1% No 18.8% Ohio 159,940 96,063-63,877-39.9% $55,353 $61,461 11.0% No 14.2% Indiana 137,827 86,682-51,145-37.1% $50,688 $57,602 13.6% No 10.6% Tennessee 60,097 40,333-19,764-32.9% $45,083 $53,238 18.1% Yes 5.1% S. Carolina 30,578 25,897-4,681-15.3% $42,264 $56,508 33.7% Yes 4.5% Kansas 50,387 45,412-4,975-9.9% $53,706 $64,209 19.6% Yes 6.2% Georgia 36,548 36,060-488 -1.3% $44,679 $60,128 34.6% Yes 4.6% Texas 79,621 84,934 5,313 6.7% $53,172 $68,919 29.6% Yes 5.1% Alabama 36,720 47,081 10,361 28.2% $49,872 $56,579 13.4% Yes 10.9% Table 1 compares three Non-RTW states (Michigan, Indiana, and Ohio) with six RTW states (Alabama, Georgia, Kansas, South Carolina, Texas, Tennessee) to establish some salient differences. Note that union membership in 2009 among all workers employed is by far the highest in Michigan (19 percent). Typically the southern states have a low membership rate, with the exception of Alabama (11 percent). Employment differences between the Non-RTW and RTW states are driven by structural and cyclical changes. In terms of structural differences, there has been a substantial decline in employment in the three mid-western states which do not have RTW compared to the RTW states between 2002 and 2009. However, all states have been badly hurt in the recent severe recession. Consequently, there are net job losses during the last eight years in some of the RTW states, but it is relatively less than the Non-RTW states. One exception is Tennessee, an RTW state with substantial job loss of -33 percent. The biggest job losers in this sector have been Michigan (-57 percent) and Ohio (-40 percent). On the other hand, the biggest gainers have been Alabama (28 percent) and Texas (7 percent). Percentages changes are useful because they give us a relative picture. However, percentages can be deceiving because the southern states are starting from a lower base. In terms of the absolute numbers, Michigan traditionally had the highest employment in this sector and the most rapid decline. Michigan employed approximately 293,000 workers in this sector in 2002 and has only 127,000 in 2009, a drop of 166,000. Ohio has a corresponding drop of 64,000 workers. The biggest gainers, in spite of the recent recession, have been Alabama (10,000 jobs) and Texas (5,000 jobs). The other major difference is in terms of annual wages. Wages are typically high in the Non-RTW states compared to the southern states. By far Michigan leads in this category, with an annual manufacturing wage of approximately $74,000 compared to the lowest manufacturing wage of
approximately $53,000 in Tennessee. Differences in wages can be because of higher productivity and/or higher costs of living. However, a major factor is the level of unionization in the Non-RTW states compared to the RTW states. Recently, wages in the RTW states are beginning to converge with wages in Non-RTW states, as workers in new plants gain more experience and seniority. This convergence can be seen when we compare the wage changes in each state from 2002 to 2009. Since the RTW states are starting from a lower base, the percentage increase in wages in the last eight years is actually higher in these states compared to the Non-RTW states. The average percentage increase for the three Non-RTW states is 14 percent compared to 25 percent for the six RTW states. This implies that lower level of unionization in the RTW states does not seem to permanently hold back wages over time. When we put these two major trends together, the picture seems obvious: Wage costs are typically higher in the Non-RTW union states and manufacturing jobs have migrated to the southern corridor. But there could be other factors that have increased the manufacturing jobs in RTW states. Holmes (2000) points out four factors that could account for a shift of manufacturing to RTW states: 1. Over time, because of trucking transportation, manufacturing is getting more equally distributed away from the Great Lakes region because production has to be closer to regional consumer markets. 2. The decline in agricultural jobs in the predominantly agricultural RTW states has displaced workers who have shifted to the manufacturing sector. This is part of a national trend but it is more pronounced in these southern states. 3. There has been a general shift of population to the Sun Belt states due to climatic preferences, and many RTW states are within or near the Belt. 4. Typically RTW states are not friendly to unions and would probably have attracted more manufacturing even without the RTW law, due to a pro-business environment. Other differences in demographics, business conditions, and market variables can influence the migration of manufacturing jobs. Typically, the local governments of RTW states have also been aggressive about providing tax incentives and other sweeteners to firms considering locating new plants. Consequently, we have to be cautious about how much of these differences in wage costs and the job migration can be attributed solely to RTW issues.
Cost of doing business, competitiveness, and tax climate Some other differences between the states are noted in Table 2 below: TABLE 2A: Cost of Doing Business Cost of Doing Business (Score) Cost of Doing Business (Rank) Right to Work Michigan 98.9 20 No Texas 95.9 24 Yes Ohio 91.0 30 No Georgia 90.7 32 Yes Indiana 87.3 36 No Kansas 86.8 38 Yes Alabama 85.8 39 Yes Tennessee 85.2 42 Yes S. Carolina 82.9 45 Yes *Cost of Doing Business is based on 2007 data. http://www.okcommerce.gov/libraries/documents/2007_costofdoingbusiness_index_milken_institute_ 2208072241.pdf Michigan seems to have the highest score for cost of doing business as represented by an index developed by the Milken Institute. This cost index incorporates wages, tax burden and rent costs, etc. The score for Michigan is 99 compared to South Carolina which has 83. This index ranges from 152 (highest cost of business in the state of Hawaii) compared to 70 (lowest cost of doing business in South Dakota). Michigan has the highest cost of doing business in our subset of states, but nationwide its rank is somewhere in the middle, the 20th most expensive. TABLE 2B: Competitiveness Index Competitiveness Index (Score) Competitiveness Index (Rank) Right to Work Kansas 5.53 17 Yes Texas 5.35 20 Yes Georgia 4.68 31 Yes Tennessee 4.41 37 Yes Michigan 4.16 41 No S. Carolina 4.07 42 Yes Indiana 3.91 44 No Ohio 3.89 45 No Alabama 3.44 48 Yes * Competitiveness Index is based on 2007 data. http://www.beaconhill.org/compete07/compete2007.pdf In terms of state competitiveness index prepared by the Beacon Hill Institute of Suffolk University, Utah is ranked the most competitive in the nation with a total score of 7.39. Michigan is ranked 41st in the nation with an overall score of 4.16; it is relatively better than Indiana (44th) and Ohio (45th). This index incorporates a variety of variables including govt. fiscal policy, security,
infrastructure, human resources, openness, and environmental policy, etc. Note that most southern states are more competitive, with the exception of Alabama (48th) and South Carolina (42nd). TABLE 2C: Tax Climate Rankings Tax Climate Rankings 2007 (Score) Tax Climate Rankings 2007 (Rank) Right to Work Texas 5.99 10 Yes Indiana 5.72 12 No Tennessee 5.27 17 Yes Georgia 5.18 21 Yes Alabama 5.16 22 Yes Michigan 5.14 23 No S. Carolina 4.98 27 Yes Kansas 4.77 35 Yes Ohio 3.96 47 No Tax Climate Rankings 2010 (Score) Tax Climate Rankings 2010 (Rank) Right to Work Texas 5.7 11 Yes Indiana 5.67 12 No Michigan 5.53 17 No Alabama 5.19 19 Yes Tennessee 5.1 22 Yes S. Carolina 5.03 26 Yes Georgia 5.01 29 Yes Kansas 4.93 32 Yes Ohio 4.04 47 No http://www.taxfoundation.org/taxdata/show/22661.html Now consider business tax rankings prepared by the Tax Foundation. Michigan fares quite well with a nationwide rank of 17th. Typically states that have lower, simple and more transparent taxes are ranked higher. Note that Ohio is ranked badly in terms of a tax climate (47th rank nationwide). These indices do not necessarily capture all the complex dimensions of business conditions, competitiveness, and tax climate. However, they do provide useful summary information. The results of these indices are mixed. Overall, Michigan does not do well in terms of cost of doing business and competitiveness compared to other states in the nation. It does relatively better in having a more hospitable tax climate. The important thing to remember is that a variety of these factors can cause differences in economic variables and lead to job migration. In subsequent sections, we review empirical work to assess how much change in employment can be attributed solely to RTW.
EMPIRICAL ANALYSIS What does the empirical literature show about the impact of RTW laws? A fairly comprehensive review of the articles in the 1980s and 1990s is provided by Moore (1998). An extensive recent review of the impact of RTW on employees, unions, and companies is provided by Cooper (2004). The focus of this article is mainly to review the impact of RTW on jobs and economic development. Let us analyze a few landmark studies in this area. Two past studies reviewed by Moore (1998) deserve special mention: In the first study, Newman (1983) applied regression analysis to explain changes in manufacturing employment. His explanatory variables were previous changes in corporate taxes, unionization and a RTW variable. Regression analysis is able to control for other factors by including them as explanatory variables that influence manufacturing employment, so that the net impact of RTW can be estimated. He found that RTW had a significant positive effect on employment in 11 out of the 13 industries he analyzed. The impact was more substantial in industries that used more labor compared to capital. The studies he did later showed that the impact of RTW laws can dwindle over time. In the second study, Schmenner et al. (1987) used a different approach by analyzing Fortune 500 survey data, along with state and plant level data to estimate location decisions as a two stage process. The first stage is to seriously consider some locations and the second stage is to make a final choice. He found that RTW laws were significant in the first stage when different locations were being seriously considered, but were not significant in the final choice. An extensive study by the Mackinac Center for Public Policy (William Wilson, 2002) argues that RTW states have performed relatively much better in terms of a variety of economic indicators. Some of the results (Page 2 of Report) are: Gross Product has grown more rapidly by 0.5 percent per year in RTW states between 1977 to 1999. Overall employment, particularly manufacturing employment, grew more rapidly between 1970 and 2000 in RTW states. Overall employment increased by 0.9 percent more rapidly per year in RTW states. Manufacturing employment increased more by 1.7 percent per year in RTW states. The proportion of families who are living in poverty in RTW states fell from 18.3 percent to 11.6 percent between 1969-2000. The proportion of families who are living in poverty rose in most Non-RTW states. (Michigan increased by 0.6 percent).
A subsequent update of this study by Kersey (2007) based on the data from 2001 to 2006 showed the general trends mentioned above remained the same and the differentials between RTW and Non-RTW states had widened in some cases. In both these studies it is argued that rigid labor laws and lower labor productivity are the main reason for the major differences between RTW and Non-RTW states. Wilson (2001) found that unit labor costs (compensation per unit of real output) are quite high in Non-RTW states (98.1) and Michigan (109.2), compared to RTW states (93.2). In Kersey (2007) update, based on 2005 data, Michigan unit costs had reduced marginally to 105, but the general unit cost differential between RTW and Non-RTW had become 6.4 points. The argument about unit costs is important. Certainly, if higher wages are paid to workers because they are more skilled and productive, they are justifiable and not likely to be a disincentive, since unit costs will remain stable. But since higher unit costs indicate higher wages (relative to output produced), the higher wages may not be justifiable, and can be a significant negative driver of plant location decisions However, note that besides units costs (an important factor, no doubt), other factors such as government policies and other trends, indicated by Holmes earlier, can also drive these economic performance differences between states. Holmes (2000, 1998) adopts a different method that is quite insightful. He looks specifically at counties that are on the border between RTW and Non-RTW states. If RTW matters, there should be a significant difference in manufacturing employment between the counties on one side of the border that have these laws (compared to the other side that does not), although the broad area is quite similar in terms of climate, demographics, industrial mix, etc. He found a significant difference in the growth of manufacturing employment from 1947 to 1992 for the RTW states of 88.5 percent compared to 62.6 percent for the Non-RTW states, a difference of 26 percent, for the immediate counties within 25 miles of the state borders. Note that this difference could be because of RTW, but also because of other business-friendly policies that are typically more prevalent in RTW states. Another recent study by the Federal Reserve Bank of St. Louis (Garrett and Rhine, 2010) evaluates the impact of economic freedom on employment in different states. Economic freedom incorporates smaller government, less taxation, and more labor market freedom. They find that states that have more economic freedom witness higher growth rates. Their regression analysis controls for other factors such as human capital, population density, and industry mix. More specifically, their regression analysis finds that state level labor market policies influence employment growth more than national labor market policies. Their calculation shows that if Michigan increased its economic freedom (from 5.9 to the average national level of 7.05), it would increase the predicted growth rate in employment between 1990 to 2000 by about 5 percent, resulting in 204,000 more jobs. Note that this is the impact for the improvement in the total economic freedom index, out of which labor market policies are only one component. A recent study from the Cato Institute (Richard Vedder, 2010) argues that between 1970 and 2008, right-to-work states have almost doubled their population, whereas the population in non-right-towork states has increased by a modest 26 percent. He performs a simple regression analysis that controls for tax burden, population growth, land area, and educational attainment. With data from
1977 to 2007, the calculations of his model show that the RTW state would have a cumulative economic growth rate of about 61.5 percent over thirty years, 23 percent higher than a comparable Non-RTW state. The RTW state typically would increase income of each individual by $2,760, approximately $11,000 for a typical four member family. A recent study by Kalenkoski and Lacombe (2006) employing the 2000 census data used a sophisticated spatial control model that controls for geographically dependent omitted variables. These are variables that are not in the model (due to lack of appropriate data) but are correlated with geography such as advantages of having an industrial cluster, availability of natural resources in an area, climatic preferences, etc. They found that RTW has a significant positive impact on the manufacturing share of private sector employment of 2.1 percent. This estimate is about 30 percent lower, compared to another model that does not control for spatial factors. It is important to realize that these studies have a wide variation of results because there are differences in data, control variables, and methodology. We have to use our own subjective judgment to consider which study is relatively more reliable. My own opinion is that the Mackinac policy estimates are somewhat on the high side, because some other factors that may influence the results between states are difficult to factor out. The Vedder study from the Cato institute is probably on the high side also, because the nature and type of control variables are not comprehensive. On the other hand, the Kalenkoski et al. study leads to estimates that are on the relatively low side because the spatial control factor methodology probably takes out too much of the variation between RTW and Non-RTW states. This is partly because of the way they factor out the impact of omitted variables by controlling for the variation in the error term (i.e. the unexplained component of the model). The Federal Reserve Bank study has a relatively good methodology and reasonable results but it is difficult to disentangle the difference of the net RTW impact from their overall freedom index. The study that is somewhat in the middle and has a relatively good methodology is the one by Holmes (2000, 1998). This study is based on an extensive article that was published in the Journal of Political Economy, one of the top journals in the economics field. His estimate of 26 percent difference in manufacturing employment between close to the border RTW and Non-RTW counties is fairly robust in terms of geography. As we proceed into the interior, away from the border, we get a series of estimates for the different counties that range from a cumulative growth rate of 86 percent to 93 percent for the pro-business RTW states and between 57 percent to 75 percent for the anti-business Non-RTW states. If we take the difference between the states from the mid-points of these ranges, it works out to approximately 24 percent change in manufacturing employment between Non-RTW and RTW states over 45 years. To put this 24 percent change in manufacturing employment in perspective, in the transportation equipment sector (if we take the mid-point of the 2002-2008 employment numbers), a 24 percent difference in employment growth would result in approximately 50,000 to 60,000 additional jobs in Michigan. I don't include the 2009 employment numbers in the base calculation because the decline was mostly due to the severe recent recession. Note that this difference is attributable to RTW laws
and also other business conditions differences between these states that might be correlated with RTW laws. Also, we are applying the average results from a national study to a specific state. To the extent that the state circumstances are different from the national profile, the estimated effects might differ somewhat. This range of employment values is quite crude but it seems to be a reasonable, middle of the road, estimate based on a reputable national study. ECONOMIC FEASIBILITY OF RTW IN WEST MICHIGAN Recently, there has been some discussion about carving out a RTW zone in the western part of the state that has relatively less union activity. Typically manufacturing hourly wages are relatively lower in West Michigan compared to the east side, partly because of less unionization in the west side. For instance, the average hourly wage for manufacturing production occupations at the national level in 2008 was $13.99. In the Grand Rapids-Wyoming MSA it was $14.78. The corresponding number for the Detroit-Livonia-Dearborn area is $19.63. The difference is almost $5 per hour between the west and east side of the state. Some of this difference could be because of productivity and cost of living variations. However, a significant portion of it is because of more unionization on the east side of the state. If there is an attempt to carve out a RTW zone on the west side, which counties should be incorporated? Of course, the answer to this question might depend upon the political support in respective counties and cities. From an economic point of view, most of the west side counties could fall in this zone including the cities of Grand Rapids, Muskegon, Holland and Kalamazoo. In fact, one way to think about a boundary would be to include the counties on the west side of the I-75, (and south of Flint, the I-23) corridor. If we include only counties that are clearly east of the I- 75/I-23 corridor, this would account for approximately 41 percent of Michigan's population. Of course, this is an arbitrary division, but it gives a rough idea about the size of a possible west RTW zone. CONCLUDING REMARKS It is important to realize that unions have played a significant historical role in the nation's economic and social progress. During the industrial revolution, unions played a major role in increasing work safety and preventing exploitation of labor. Unions have been successful in lobbying for major labor protection reforms and fair wage legislation. Government agencies such as OSHA and EPA have been created to ensure that businesses do not take excessive shortcuts that might compromise the safety and health of workers. One could argue that because of their historical success, unions might have to some extent, out lived their usefulness. Perhaps that partly explains the declining union member rates over time. Here are some final take-aways from this analysis: The preponderance of the empirical evidence does suggest that RTW states have more manufacturing employment and economic development compared to Non-RTW states over time.
We must be careful when we compare the economic differences between RTW states and Non-RTW states because many of these variations could be driven by factors other than RTW itself, such as cost of living, productivity, climatic preferences, aggressive subsidies, geographical trends, and other government policies. The gold standard for arriving at a good answer is to review regression studies that control for other factors besides RTW that may cause differences in economic variables between RTW and Non-RTW states. There is considerable variation in the results of these controlled empirical studies because of differences in data, explanatory variables, and methodology. A middle of the road crude estimate based on a relatively good methodology indicates that if Michigan was a RTW state it might create approximately 50,000 to 60,000 more jobs in the manufacturing transportation sector over an extended period. West Michigan manufacturing wages are significantly lower than wages on the east side by approximately $5 per hour. The West side is already more pro-business and less unionized compared to east side. The pro-business conditions in West Michigan could be accelerated by carving out an RTW zone that is west of the I-75/I-23 that would incorporate approximately 41 percent of the state population. Assessing the political feasibility of this RTW zone is beyond the scope of this article. Note that the simplified estimates I provide are based on applying a reputable national study to the Michigan transportation sector. There are many other empirical results (indicated in previous studies) that are reviewed in this paper. Since no study is completely free of methodological problems, the readers need to review all the empirical evidence in its entirety. For more information on this complex issue, readers are encouraged to visit the pro-rtw and anti- RTW websites. The references provide a selected reading list of part of the literature. References I am grateful to Dr. Paul Sicilian for suggestions and Rennie Ramlal for data assistance. Barnes, Fred, 12/22/2008, The Other American Auto Industry, The Weekly Standard, Volume 14, issue 14. At http://www.weeklystandard.com. Cooper, John, 2004, Effects of Right-to-work Laws on Employees, Unions and Business, available online at http://www.johnwcooper.com. Garrett, Thomas, and Russell Rhine, March 2010, Economic Freedom and Employment Growth in U.S. s, Federal Reserve Bank of St. Louis, Working Paper 2010-006A. Holmes, Thomas, 2000, The Location of Industry: Do Policies Matter? Regulation, 23.1, pp. 47-50. Holmes, Thomas, 1998, The Effect of Policies on the Location of Manufacturing: Evidence From Borders, Journal of Political Economy, 106 (4), pp. 667-705.
Kalenkoski Charlene and Lacombe Donald, 2006, Right-to-Work Laws and Manufacturing Employment: The Importance of Spatial Dependence, Southern Economic Journal, vol. 73, no. 2, pp. 402-418. Kersey Paul, 2007, The Economic Effects of Right-to-Work laws: 2007, A Mackinac Center Report, Mackinac Center for Public Policy, Midland, Michigan. Moore, William, 1998, The Determinants and Effects of Right-To-Work Laws: A review of the Recent Literature, Journal of Labor Research, Summer 1998, pp. 445-469. Newman, Robert, 1983, Industry Migration and Growth in the South, Review of Economics and Statistics, 65, pp. 76-86. Schmenner, Roger and Joel Huber and Randall Cook, 1987, Geographic Differences and the Location of New Manufacturing Facilities, Journal of Urban Economics, 21, pp. 83-104. Vedder Richard, Winter 2010, Right-To-Work Laws: Liberty, Prosperity, and Quality of Life, Cato Journal, Vol.30, No. 1, pp. 171-180. Wilson, William, June 2002, The Effect of Right-to-Work Laws on Economic Development, A Mackinac Center Report, Mackinac Center for Public Policy, Midland, Michigan. For a brief history of right-to-work laws and some pros and cons go to: http://en.wikipedia.org/wiki/right-to-work_law Descriptive data sources For economic variables, go to http://www.bls.gov For cost of doing business, go to http://www.okcommerce.gov/libraries/documents/2007_costofdoingbusiness_index_ Milken_Institute_2208072241.pdf For competitiveness index, go to http://www.beaconhill.org/compete07/compete2007.pdf For tax burden calculation, go to http://www.taxfoundation.org/taxdata/show/22661.html