Will Michigan's right-to-work law help the state? Yes

Yes: But it's just one small step
2013-01-07T00:00:00Z 2013-01-07T06:55:22Z Will Michigan's right-to-work law help the state? Yes Arizona Daily Star
January 07, 2013 12:00 am

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.

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 which benefit particular entrenched interests, from unions to politically connected operators.

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 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.

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 like 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 like cosmetologist, home entertainment installer, and florist. These regulations are simply about preventing competition and lower prices.

Likewise, our education system has for too long been protected against meaningful competition.

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 rather than encouraging and embracing it.

Lawmakers should remove barriers, simplify tax codes and regulation and make it easier, not harder, for entrepreneurs to start and expand businesses.

Right-to-work laws are only part of the answer.

 

Editor's note

Every Monday we offer pro/con pieces from the McClatchy-Tribune News Service to give readers a broad view of issues.

Arthur C. Brooks is the president of the American Enterprise Institute and author of "The Road to Freedom." Website: www.aei.org

Copyright 2014 Arizona Daily Star. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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