New Federal Reserve Study of Idaho Economy Reconfirms That Right to Work Laws Promote Prosperity

A recently published study by two economists for the Federal Reserve Bank of St. Louis provides compelling evidence that even states that already have a relatively low level of unionization can accelerate the creation of high-paying jobs within their borders by enacting a Right to Work law.

Authors Emin M. Dinlersoz, of the University of Houston, and Ruben Hernandez-Murillo, of the Autonomous Technical Institute of Mexico (ITAM), also conclude that “even the process leading to the passage of the law may be quite important” as an economic growth-inducing factor.

State Right to Work laws protect private-sector employees from the provisions in the National Labor Relations Act under which they could otherwise be forced to pay union dues or “fees” as a job condition. Nearly all Right to Work laws also prohibit forced dues in state and local government employment and public schools.

The Dinlersoz/Hernandez-Murillo study, “Did ‘Right-to-Work’ Work For Idaho?” (published in the May/June issue of the Federal Reserve Bank of St. Louis Review), focuses on the experience of one state whose Right to Work statute took effect in 1986.

It concludes that “in the post-law period, Idaho experienced a significant and persistent growth in manufacturing employment and in the number of establishments, as opposed to virtually zero growth in both of these variables in the pre-law period.”

Specifically, Idaho’s annual manufacturing “employment growth rate was about 3.7 percent post-law, compared with an almost zero annual average growth rate pre-law.”

Furthermore, the “growth rate in the number of establishments was about seven times larger compared with that in the pre-law period. Idaho did much better after the RTW law was passed, compared with most other states in the region, both in employment and in the number of establishments.”

The entire study can be viewed at on the St. Louis Federal Reserve Bank’s web site.