New report shows "Right to Work" is wrong for Michigan

In a new report released by the Economic Policy Institute (EPI),  ‘Right to work’: The wrong answer for Michigan’s economy, Gordon Lafer, a labor economist with the University of Oregon, says such legislation does nothing to encourage job growth and ends up lowering wages by an average of $1,500 per year. This is the case for union and non-union workers in right-to-work-states.

The EPI is a national non-partisan think tank.

In a presentation to labor union representatives and legislators, Lafer said, “Evidence shows that claims that ‘Right-to-Work’ will significantly increase job growth and wages people earn, are completely without scientific foundation.”

Lafer also noted that Right-to-Work laws decrease the likelihood that employees will get either health insurance or pension through their jobs—again this applies to both union and non-union workers. With 85 percent of Michigan’s economy concentrated in non-manufacturing industries, wage and benefit cuts would have significant negative effects.

And the effect of such laws impacts more than just workers who have less discretionary income to spend. Lafer said, “Every $1 million in wage cuts translates into an additional six jobs lost in the economy.”

Lafer’s research shows that there is no reason to believe that people move from one state to another or that employers will flock to Michigan because of “Right to Work.” There are many other factors.

“What factor is the most influential on job growth?” asked Lafer. “Improving the state’s education system would be one way to benefit the job market.”