Why Do Right to Work States Have Superior Economic Outlooks?
The just-released 10th edition of Rich States, Poor States, a survey of the economic policies, past performance and prospects of the 50 states published by the Arlington, Va.-based American Legislative Exchange Council, is like its predecessors brimming with optimism about the ability of state voters and elected officials to control their own financial destinies. Â (See the link below to obtain a free PDF copy.)
Arthur Laffer, Stephen Moore and Jonathan Williams, the three co-authors of Rich States, Poor States, clearly believe that, notwithstanding a state’s climate, natural resources and location and regardless of the overall training, abilities and age-composition of its working-age residents, it can significantly accelerate its growth path by adopting better policies.
The Laffer-Moore-Williams analysis highlights an “economic outlook ranking,†a forecast of economic performance “based on a state’s current standing in 15 state policy variables†related to taxes, spending, and business regulation as well as labor-management relations.  Right to Work status is given no more weight than any other factor.
And yet, as economist Mark Perry, a popular commentator on economic matters as well as a professor, has already pointed out on his Twitter account, this year every single one of the 14 top-ranking states for economic outlook has a Right to Work law. Â And not one of the 17 bottom-ranking states for economic outlook protects employees from compulsory unionism.
Right to Work has a much greater influence on a state’s overall climate for job and income growth than one might expect in large part because, wherever Big Labor is endowed with forced-dues privileges, it funnels a substantial share of the loot extracted from workers into efforts to elect and reelect politicians who support higher taxes, more government spending, and strait-jacket regulation of business.
And, as Laffer, Moore and Williams show, all of these union boss-favored public policies are negatively correlated with job and income growth.