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|The Effect of Endogenous Right-to-Work Laws on Business and Economic Conditions in the United States|
Since the 1947 passage of the Taft-Hartley amendments to the National Labor Relations Act, which allowed states to ban agreements stipulating that all employees represented by a union had to pay dues, 22 states have passed these so-called “right-to-work” laws. Proponents of right-to-work laws claim that they enable a more business-friendly environment and lead to economic growth for states and their residents.
Lonnie Stevans, Professor of Information Technology and Quantitative Methods at Hofstra University, tested this claim by comparing the business formation and economic growth of right-to-work states with non-right-to-work states using recent data from the U.S. Small Business Administration. Stevans controlled for variables like education levels, population changes, and type of employment in the states to accurately measure the relationship between right-to-work laws and economic growth.
Stevans found that a state’s right-to-work law:
Stevan’s analysis of right-to-work states also yielded the following observations:
Stevans concluded his analysis with the following observation:
“…From a state’s economic standpoint, being right-to-work yields little or no gain in employment and real economic growth.”
Lonnie K. Stevans, Hofstra University, REVIEW OF LAW AND ECONOMICS, 2009.