The Effect of Right to Work Laws

Review of “New Evidence on the Effect of Right-To-Work Laws on Productivity and Population Growth”
Introduction
Right to work laws allow workers to work in unionized workplaces without being union members or being required to pay union dues (National Right to Work, 2018). In right to work states, workers thus have the options of working in industries dominated by unions without having to feel that they must join the union to take a job in the field. The study by Hicks, LaFaive and Devaraj (2016) focuses on how right to work states promote population growth and productivity. This paper will summarize the article, discuss relevant points made by the authors, critique the article and apply the concepts presented in the article to the real world.
Summary of the Article
The article by Hicks et al. (2016) first provides a review of right to work literature and research to give the reader important background information. The researchers mainly focus on evaluating earlier research conducted by Hicks in order to expand on the information provided by the author in previous studies. Economic theory and right to work legislation are discussed in the next section along with the effect of right to work on productivity rates. The researchers examine empirical evidence to show a statistically significant correlation between right to work legislation and increased productivity and population growth in right to work states.
Relevant Points Made by the Author
The relevant points made by the authors are that right to work laws had the most economic impact in the time period from 1971 to 1990. From 1991 to 2013 there was still a significant impact on the economy but the results were not as impressive as they were in the 20 year period prior. The main reason for the bigger impact in the 1970s and 1980s, the researchers argued, was that “during the beginning of the manufacturing employment stagnation (1971–90)” right to work had the biggest impact because workers were looking for new job opportunities as there were fewer of them to be found, and right to work laws allowed them to obtain jobs without having to join a union.
As Voss and Sherman (2000) show, some workers resist unions because they feel unions do not offer them a very significant organizing mechanism, do not necessarily negotiate in their best interests, do not want to pay union fees and dues, and so on. The primary reasons are economic and in an economic downturn it makes sense that workers would prefer to work without having to pay for representation, especially if they feel fully capable of negotiating for themselves on their own terms. What Hicks et al. (2016) show is that states where workers are empowered to choose whether they want to unionize or not to work a job have greater odds of increasing their population and productivity.
Critique of the Article
The article implicitly pushes the idea that correlation is the same as causation. They make the concluding statement that “the presence of an RTW law boosted state population growth by 1.1 percent to 1.5 percent” (Hicks et al., 2016, p. 118) between the years of 1971 and 2013—however, they did not test for causation but rather for correlation, so the statement is misleading at best and patently false at worst. Just because there is significant correlation between variables does not mean that the independent variable is the only variable impacting or having an effect on the dependent variable. The only to test for that kind of effect is to perform a randomized controlled trial—and the researchers did not do that: they simply looked at economic data and performed correlative analysis to see whether there existed a statistically significant correlation between right to work legislation, productivity, and population and economic growth.
The study gives the impression that right to work laws, therefore, are the main factors in states’ growth primarily during the years 1971 to 1990 but also in the 20+ years following 1990. This is little better than an assumption and the projection of a hypothesis that is only marginally supported by statistical correlation; it is not proved by any means that the right to work laws are responsible for the growth. There could be myriad reasons for growth, but the researchers do not discuss this possibility in the slightest, which gives their study a degree of bias that has to be identified and discussed so that readers do not take the conclusion at face value. A discussion of the limitations of the study is not provided and should have been; that would have helped to remove some of the researcher bias that is evident in the final report.
Application of the Concepts Presented in the Article
If one is to take the study at face value and accept the concepts as presented—i.e., that right to work laws are responsible for population and economic growth in states—then there are certain applications that the study can have in the real world. For instance, by incorporating right to work laws in their legislation, states stand a better chance of increasing the population in their state by attracting new workers from other states who are willing to take jobs that do not require them to join a union. Essentially, the research aims to show that right to work laws create new opportunities for workers, which creates new opportunities for states to collect income from an increased population. It also allows them to gain increased tax revenue on profits from companies that increase productivity through right to work. Therefore, the implication is that all states should adopt right to work laws.
However, as the study somewhat inaccurately reflects the true nature of the findings—i.e., that correlation does not in any wise indicate or equal causation—the practical application of the findings are limited: no evidence is presented that actually shows causation—i.e., that right to work laws lead directly to increased production and population growth. There is merely a correlation. Likewise, if all states were to enact right to work laws, they would cancel out the incentive of moving to a right to work state, as every state would provide workers with the same opportunities. What would compel a a worker to relocate to a new state would be the job or company—not necessarily the law at that point.
Summary
The article by Hicks et al. (2016) focuses on the impact of right to work laws on population growth, economic growth and productivity growth. The study examines the link between these variables and identifies significant statistical correlation primarily between the years 1971 and 1990 and then to a lesser extent from 1991 to 2013. Their findings are presented as proof that right to work laws are directly responsible for population growth in right to work states and for increase economic output. The problem with the study is, however, that the researchers seem to mistake correlation for causation. Just because there is significant statistical correlation between variables does not mean that the relationship is causative.
References
Hicks, M. J., LaFaive, M., & Devaraj, S. (2016). New evidence on the effect of right-to-
work laws on productivity and population growth. Cato J., 36, 101.
National Right to Work. (2018). Right to work FAQ. Retrieved from
https://www.nrtw.org/right-to-work-frequently-asked-questions/
Voss, K., & Sherman, R. (2000). Breaking the iron law of oligarchy: Union revitalization
in the American labor movement. American journal of sociology, 106(2), 303-349.