Pro: Michigan law creates jobs, hikes wages and boosts its competitiveness
WASHINGTON — EDITOR’S NOTE: The writer is addressing the question, “Will Michigan’s right-to-work law help the state?”
Last month Michigan became the 24th state to pass a right-to-work law, keeping workers from having to join a labor union or pay union dues in order to work in unionized businesses. This is a step in the direction of economic freedom, a competitive labor market, and a pro-growth policy agenda.
The rationale for right-to-work laws is not grounded in ideological opposition to unions; nothing in right-to-work laws prevents workers from joining unions or keeps unions from bargaining collectively. These laws merely reflect the reality that states with right-to-work laws have more robust personal income growth, lower unemployment and greater opportunities for younger workers.
It’s perfectly sensible that states that want to see their economies grow should enact right-to-work laws. But the privilege of unions to extract money from workers’ paychecks is far from the only special preference granted by state policy.
Our economy is chock full of similar legal preferences that benefit particular entrenched interests, from unions to politically connected operators, that policymakers should seek to pare back.
Too frequently, state-level policy does more to reward political connection and support entrenched interests than encourage a real culture of competition. Strong pro-union laws are just one way in which states grant special favors that inure against competition rather than strengthen it.
Take the corporate welfare that too many states hand out under the guise of being “pro-business.”
According to a recent analysis by The New York Times, states hand out over $80 billion a year in so-called “business incentives.” The great majority of these are simply giveaways to political allies or favored economic sectors.
The Tax Foundation finds that of the 47 states with corporate income taxes, 45 have specific tax credits for job creation, research and development, or investment. As of 2011, 35 states offered film or television tax credits—barely disguised giveaways to Hollywood production companies.
At the federal level, almost $100 billion is given away annually in corporate welfare, according to a study by Cato Institute analyst Tad DeHaven—and that doesn’t include many policies such as the auto bailout. This represents an egregious affront to competitive, free markets.
Consider two other widespread instances of government policies that benefit small groups at the expense of consumers, workers, and taxpayers: occupational licensing laws and anti-competitive education policies.
A recent study by the Institute for Justice, a public interest law firm, finds that in the 1950s, one in 20 U.S. workers was subject to occupational licensing requirements, a figure that today stands at almost one in three.
In many states this includes occupations such as cosmetologist, home entertainment installer and florist. These regulations have little to do with protecting the public—they are simply about preventing competition and lower prices for consumers.
Likewise, our education system has for too long been protected against meaningful competition.
As my AEI colleague Rick Hess has written about extensively, our school systems can be actively hostile to the educational entrepreneurship that develops and executes new forms of school organization and teaching. Far too much state education policy erects barriers to educational innovation, particularly with respect to the for-profit sector, rather than encouraging and embracing it.
In the economy and elsewhere, lawmakers should think about how to remove barriers to competition rather than try to pick winners to subsidize. They should simplify tax codes and regulation rather than creating special exemptions and loopholes. They should make it easier, not harder, for entrepreneurs to start and expand businesses and create jobs.
Right-to-work laws are an important step to bringing competition to labor markets and creating more growth and economic opportunity. But they are only part of the answer.
Arthur C. Brooks is the president of the American Enterprise Institute and author of “The Road to Freedom.” Readers may write to him at AEI, 1150 17th St. NW, Washington, D.C. 20036; website: www.aei.org.
Jan 7, 2013 at 5:44 a.m.
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Mouse is an obedient liberal follower, do as I say not as I do...
Jan 6, 2013 at 11:41 a.m.
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More typical leftwing hate from mouse...no facts from the squeky mammal just more rulzzzz for rodents echos; cause she cant think for herself.
Jan 6, 2013 at 11:32 a.m.
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RetiredAirForce, 916, wislady, et al....lets just all ignore mouse and her inane comments. From now on you don't exist mousie.
Jan 6, 2013 at 6:06 a.m.
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24....good luck to you. Hopefully you can climb the ladder again with your current job. At $10/hour you are most likely in an unskilled job. Maybe get some additional training, take some courses relayed to your current employer's needs? Also continue looking for another job more appropriate to your college degree and using the experience you gained at your last job.
Jan 5, 2013 at 10:48 p.m.
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The rodent shines again.......look cheese.
Jan 5, 2013 at 7:03 p.m.
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This article is like the president of Toyota doing an "impartial" comparison of auto companies.
Jan 5, 2013 at 7:01 p.m.
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"Arthur C. Brooks is the president of the American Enterprise Institute" Nothing more needs to be said - a right wing tool.
Jan 5, 2013 at 6:26 p.m.
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@donnaw - Thank you for your incorrect assumptions. No, I have an excellent work history. I had been at the same employer for the past 15 years and made double what I make now. Due to the economy, I moved because my husband lost his job and I gave up mine for his new one. The reality is that is what most companies are paying out there with experience or not. They know what they can pay and they are doing the best to pay the least amount they can. You may all hate the unions but they are able to get in their contracts negotiations help raise the standard of living for all. Why do you think businesses want them gone?
Jan 5, 2013 at 5:58 p.m.
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Mouse.....I would guess that the military has both competency and physical testing that one would have to pass before being allowed to serve. Judging by the way you can't structure a sentence to save your life, intelligence can't be one of your strong suits. As far as the physical testing is concerned, my guess is that you would fail that miserably too:( You need to put down the computer and get off the couch, stop taking advantage of Wisconsin's generous Ouest/food stamp program and do something with your life. Good luck little guy....and don't forget to put your helmet on before you go outside!
Jan 5, 2013 at 3:16 p.m.
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For those of you who don't understand the wording of the "Right to Work" law then get it changed to the "No right to Work" law...
Jan 5, 2013 at 6:53 a.m.
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"Yes, taking away workers rights is a bad thing."
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If you read the law, a right was granted, not removed.
Jan 5, 2013 at 6:16 a.m.
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24me...what kind of skills do you have? A college degree is only worth something if the major is something an employer is looking for. And $10/ hour is an entry level pay rate so if you have a family to support you know you aren't going to support them on that. You aren't telling the whole story. Do you have a bad job history...attendance, bad attitude, drugs, alcohol problems? Working poor can get Badger care, Medicaid. You may have to work a couple of jobs to get going.
Jan 4, 2013 at 10:49 p.m.
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Oh how terrible, giving workers a choice is a bad thing.
Jan 4, 2013 at 10:29 p.m.
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Being a MI resident and former WI resident, I think it is a sad state of events. I am no great economist but I do see the writing on the wall. Watch as your big businesses grow and their profits increase as your middle class disappears. Have you tried to raise a family on $10.00 an hour? I am supposed to be thankful that I have still have a job and I am making more than minimum wage. Glory be. Do you think businesses are going to increase my paycheck leaps and bounds when the economy gets better? I am not holding my breath. I am not asking a company to pay me six figures. I would like a job that gets my family out of the poverty level and maybe will even provide me an opportunity to pick up health insurance that I can afford. I guess I am asking too much for someone with a college degree. Silly me. Congratulations big business. Sorry little people.
Jan 4, 2013 at 4:31 p.m.
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Mouse at what point are you going to address my points about NAFTA if you are so concerned about the American worker?
Jan 4, 2013 at 4:15 p.m.
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Mouse your ramblings don;t even make sense anymore, I see happy hour started early.
Jan 4, 2013 at 4:08 p.m.
Jan 4, 2013 at 3:24 p.m.
Jan 4, 2013 at 3:22 p.m.
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LOL Mouse you mean the jobs that left the country due to NAFTA which was supported by which President of which party again? Good lord wake up neither party has a monopoly on failure. The sooner people start looking at themselves as individuals and not as part of larger groups in which numbers and figures affecting those groups can be manipulated for political gain, the better off everyone will be. For example rather than lumping yourself into a group of workers, do what successful people do which is look at how they can improve their own situation and not be hampered by the rest of the group they willingly allow themselves to become a victim with. When you allow yourself to be stuck in a group you are only as good as the weakest link.
Jan 4, 2013 at 2:04 p.m.
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More robust personal income growth due to a starting wage close to the minimum wage. Lower unemployment become businesses flock to states that allow them to hire slave labor with no benefits and reduced safety regulations and greater opportunities for younger workers to have a minimum paying job that pays a few dollars more a day then the free welfare they're collecting for doing nothing. Hooray!
Jan 4, 2013 at 1:11 p.m.
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Mouse, omg get a grip, extremists like yourself do your party no good, you just run to the ridiculous arguments and look foolish. Nobody is getting paid $3.50 an hour with no benefits. If you think you are getting screwed at your job, get some skills and move up to something better it seemed to work for generations, not sure why people are not willing to do it nowadays, oh that's right it is much easier to just be a victim. Sad.
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