The 1947 Taft-Hartley amendments to the National Labor Relations Act (1935) authorized a state's right to prohibit unions from requiring a worker to pay dues, even when the worker is covered by a collective bargaining agreement. Within a short time of the amendment's passage, twelve (12) states passed "right-to-work" laws, as did ten (10) more states in the intervening years. Although there has been considerable research on the influence of right-to-work laws on union density, organizing efforts, industrial development and some study of wage differences, there has been no examination of the legislations’ effect on business and economic conditions across states. In this paper, the average differences in business conditions, personal income, and employment across states that have enacted right-to-work laws versus those that do not have this legislation are examined using a Multivariate Analysis of Variance (MANOVA). Our most notable result is the finding that although right-to-work states may be more attractive to business, this does not necessarily translate into enhanced economic viability for all sectors in the right-to-work state. Not only are personal income and employment lower, but there are no significant differences in the number of firms and business formations between right-to-work and non-right-to-work states.
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number
5638.
Find related papers by JEL classification: J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects C30 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - General C50 - Mathematical and Quantitative Methods - - Econometric Modeling - - - General K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy
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