Oklahoma’s Improved Economic Performance Suggests Right to Work Is Working

My latest study for the Oklahoma Council of Public Affairs finds that critics of Oklahoma’s right-to-work law are wrong. From the study:

On September 25, 2001, Oklahoma voters went to the polls and passed a constitutional amendment—Right to Work (RTW)—which gave workers the choice to join or financially support a union. This made Oklahoma the 22nd state (plus Guam) in the union to join the ranks of RTW states.

However, RTW was soon challenged in court, and the matter rose all the way to the Oklahoma Supreme Court. It took two years of legal wrangling before all the challenges were settled. When the dust settled in 2003, RTW remained in place—along with the promise of greater economic performance.

Fast forward to today, and opponents of the law are still at work trying to discredit it. A recent study by the Economic Policy Institute (EPI), for example, claimed that RTW in Oklahoma has been a dismal failure. One of EPI’s most important pieces of evidence is that manufacturing employment is lower today than it was before RTW.

But EPI’s view on the economic impact of RTW is simply too narrow. RTW is about giving businesses and their employees the flexibility to create a better economic future. There are two ways to accomplish this: the company can hire additional employees to boost output, or the company can invest in new capital to boost output through higher productivity.

Just because manufacturing employment fell does not mean that Oklahoma’s manufacturing sector is in a death spiral. In fact, the opposite is true. It is widely known that America’s manufacturing industry has been shedding jobs thanks in large part to technological advancement. Today’s American manufacturing worker is one of the most productive, if not the most productive, in the world.

. . .

In summary, we have presented new evidence that RTW has been a boon for Oklahoma. Manufacturing output and productivity have outpaced the competition, and people from non-RTW states are voting with their feet by moving to Oklahoma in increasing numbers. This evidence from Oklahoma should help convince policymakers in other non-RTW states that RTW is good economic policy.

The chart below shows that since 2003, Oklahoma’s Gross Domestic Product for the manufacturing industry has not only grown faster than for all non-right-to-work states, but also faster than all right-to-work states.

Chart Showing Gross Domestic Product of Manufacturing Industry in Oklahoma 2003 to 2010