Right to Work States Represent the Future of the U.S. Automotive Industry

Long before the U.S. Commerce Department’s Bureau of Economic Analysis issued its state-by-state estimates for manufacturing output of motor vehicles, bodies and trailers and parts in 2013 (see the link below for more information), it was easy to predict the data would show more than 70% of U.S. auto production that year occurred in one of the 24 states that had Right to Work laws on the books that year.

Since this summer, the data have been out, and they indeed show that the Right to Work share of real automotive manufacturing GDP (expressed in chained 2009 dollars) in 2013 was 72%.

As recently as 2003, just 22% of the total U.S. output in automotive factory emanated from Right to Work states (then 22 in number).

A large share of the Right to Work growth from 2003 to 2013 can be accounted for by the fact that Michigan and Indiana, respectively #1 and #2 in automotive manufacturing output, both passed laws prohibiting compulsory unionism in 2012. But this is far from the whole story.

Excluding Michigan and Indiana from the U.S. total, and considering just the 22 states that had Right to Work laws from 2003 to 2013, the Right to Work share of U.S. automotive manufacturing output grew from 39% to 54% over the decade. Real manufacturing GDP in these 22 states grew by 84% from 2003 to 2013, but by less than one one-hundredth of 1% in the 26 states that still lacked Right to Work protections as of 2013.

The overwhelming advantage Right to Work states states have enjoyed over forced-unionism states in attracting automotive manufacturing investment ought to put the burden of proof on Big Labor legislators in forced-unionism states like Kentucky, Missouri and Ohio who claim it makes no difference to companies considering new plant construction or expansions whether unionism is voluntary or not.

If that’s the case, how do they explain why automotive manufacturing is soaring in Right to Work states as a group, but stagnant in forced-unionism states as a group?

Excluding Indiana and Michigan, which both adopted laws prohibiting compulsory unionism in 2012, the real-dollar share of all automotive and automotive parts production occurring in Right to Work states rose from 39% in 2003 to 54% in 2013. Image: Alabama Department of Commerce

Real GDP in chained dollars