The recently released 8th edition of Rich States, Poor States, a survey of the economic policies, past performance and prospects of the 50 states published by the Arlington, Va.-based American Legislative Exchange Council, is like its predecessors brimming with optimism about the ability of state voters and elected officials to control their own financial destinies. (See the second link below to obtain a free PDF copy.)
Arthur Laffer, Stephen Moore and Jonathan Williams, the three co-authors of Rich States, Poor States, clearly believe that, notwithstanding a state’s climate, natural resources and location and regardless of the overall training, abilities and age-composition of its working-age residents, it can significantly accelerate its growth path by adopting better policies.
The Laffer-Moore-Williams analysis highlights an “economic outlook ranking,” a forecast of economic performance “based on a state’s current standing in 15 state policy variables” related to taxes, spending, and business regulation as well as labor-management relations. Right to Work status is given no more weight than any other factor.
And yet, this year every single one of the 13 top-ranking states for economic outlook has a Right to Work law. And not one of the 18 bottom-ranking states for economic outlook protects employees from compulsory unionism.
Right to Work has a much greater influence on a state’s overall climate for job and income growth than one might expect because, wherever Big Labor is endowed with forced-dues privileges, it funnels a substantial share of the loot extracted from workers into efforts to elect and reelect politicians who support higher taxes, more government spending, and strait-jacket regulation of business.
And, as Laffer, Moore and Williams show, all of these union boss-favored public policies are negatively correlated with job and income growth. The consequence, as Laffer and Moore emphasized in an op-ed for Investor’s Business Daily earlier this month (see the first link below), is that millions of Americans have for years been “voting with their feet” against the jurisdictions where forced dues-funded politicians call the shots:
The IRS keeps track of tax filers who move from one state to another each year. Over the 18-year period of 1993-2010, the aggregate adjusted gross income lost (net of income gained) from interstate migration exceeded 8% of the income in Connecticut, Rhode Island, Michigan, Ohio, New Jersey, Illinois and New York [all forced-unionism states]. Nevada, Florida, Arizona, South Carolina, Idaho, Montana, and North Carolina [all Right to Work states except Montana] gained a net 15% or more.
In other words, hundreds of billions of dollars have left the states with economically destructive policies in favor of states with business- and worker-friendly policies. These trends will continue until, as one Rhode Islander recently wrote, the last person in his liberal state turns out the lights.