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Research & Commentary: New Mexico Right-To-Work

November 4, 2014

In both 1979 and 1981, the New Mexico Legislature passed right-to-work laws, but both bills were vetoed by then-Gov. Bruce King (D).

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In both 1979 and 1981, the New Mexico Legislature passed right-to-work laws, but both bills were vetoed by then-Gov. Bruce King (D). No bills have moved as far forward since then, but right-to-work is expected to become an issue during the 2015 legislative session. New Mexico should consider right-to-work reform, as few policy reforms can have as an immediate and positive an impact.

Right-to-work laws guarantee that no person applying for a job can be forced, as a condition of gaining employment, to join or pay dues to a labor union. The authority of states to create these laws was affirmed in Section 14(b) of the Labor Management Relations Act of 1947, better known as the Taft-Hartley Act. So far, 24 states have passed right-to-work laws; most are in the southern and western regions of the United States.

New Mexico stands to benefit greatly from the implementation of a right-to-work law. In a 2012 study, the Rio Grande Foundation examined the impact of right-to-work legislation and how right-to-work could have worked to improve New Mexico’s economy. The study used data from all 50 states spanning approximately 60 years, measuring the effects of right-to-work laws on employment and economic growth.

The analysis found that if New Mexico had enacted right-to-work legislation in 1980, its employment, personal income, and wage and salary income in 2011 would all have been approximately 21 percent higher. If New Mexico had enacted right-to-work legislation effective in 2013, the state would produce 42,300 more jobs and an increase of $5 billion in personal income.

Studies in other states have shown similar results, with states enacting right-to-work laws experiencing positive economic progress. According to a 2013 study by the Mackinac Center for Public Policy, the Bureau of Economic Analysis determined “right-to-work states showed a 42.6 percent gain in total employment from 1990 to 2011, while non-right-to-work states showed gains of only 18.8 percent.”

A 2013 poll from the National Federation of Independent Business found 78 percent of New Mexico small business owners think the state should pass a right-to-work law. The National Right to Work Committee also points to the migration of people from non-right-to-work states to right-to-work states as another indicator. According to the U.S. Census Bureau, 4.7 million Americans moved from non-right-to-work states to right-to-work states between April 2000 and July 2008.

Right-to-work laws have positive effects on a state’s economy, creating new jobs and increasing population growth. New Mexico lawmakers should strongly consider passing right-to-work legislation in the near future.

The following articles examine right-to-work laws from multiple perspectives.

Right-to-Work and Economic Growth
http://heartland.org/policy-documents/right-work-and-economic-growth-comprehensive-analysis-economic-benefits-new-mexico-
The Rio Grande Institute employs a comprehensive macroeconomic database to measure the impact of right-to work statutes. The study also estimates the likely effect on New Mexico’s economy if the state adopted right-to-work. The findings unambiguously indicate New Mexico would enjoy an employment and income windfall. 

‘Right-to-Work’ Compromise Possible in New Mexico?
http://watchdog.org/105531/new-mexico-right-to-work/
Rob Nikolewski of New Mexico Watchdog discusses right-to-work reforms in New Mexico and proponents’ arguments right-to-work laws giving employees the chance to decide for themselves whether to join or financially support a labor union would give a much-needed boost to the state’s stagnant economy.

Right to Work is Right for NM
http://www.nmpolitics.net/index/2012/07/right-to-work-is-right-for-nm/
Eric Fruits of the Rio Grande Foundation argues in favor of right-to-work laws in New Mexico in this NM Politics article: “Right-to-work legislation is one of the very few pro-growth policies that is virtually costless to enact. And a large body of research has found that it benefits states economically.”

Research & Commentary: Right to Work Policies
http://heartland.org/policy-documents/research-commentary-right-work-policies
Alex Monahan, government relations coordinator for The Heartland Institute, suggests states that do not have right-to-work policies should consider implementing them. The evidence shows right-to-work has had positive effects on states’ economies, workers, and population growth.

Right to Work Increases Jobs and Choices
http://www.heritage.org/research/reports/2011/11/right-to-work-increases-jobs-and-choices
James Sherk, senior policy analyst in labor economics at The Heritage Foundation, argues states can reduce unemployment and increase investment by adopting right-to-work.

Right-to-Work States Lead Way on Income Growth
http://news.heartland.org/newspaper-article/2014/06/16/right-work-states-lead-way-income-growth
Zachary Woodman, a research intern with the Mackinac Center for Public Policy, analyzes government data and concludes that, over the past few decades, right-to-work states have had stronger income growth than forced-unionization states.

Unions Hinder Economic Growth and the Free Market
http://www.aei.org/article/society-and-culture/free-enterprise/unions-hinder-economic-growth-and-the-free-market/
American Enterprise Institute President Arthur Brooks explains how unions hamper economic growth by limiting freedom in the marketplace. Brooks concludes, “States should seek to pass right-to-work laws as part of reforms to strengthen their economies and enhance economic growth.”

Ten Principles for Improved Business Climates
http://heartland.org/policy-documents/ten-principles-improved-business-climates
Maintaining a good business climate has never been more important. Thanks to the Internet, the collapse of communism around the world, and advances in shipping and logistics, capital and labor are much more mobile than in the past. Businesses must bid for customers and workers not only from local competitors but also from businesses in other communities, in other states, and even in other countries. Small changes in taxes, regulations, and other cost-drivers may lead to businesses losing customers and possibly failing or relocating.

Michael LaFaive: Right-to-Work States Have Stronger Growth
http://heartland.org/podcasts/2013/09/26/michael-lafaive-right-work-states-have-stronger-growth
The Mackinac Center for Public Policy has studied many decades of data on right-to-work states – where workers don't have to join a union to hold a job – and has concluded those states enjoy stronger growth in personal incomes, employment, and population. Report coauthor Michael LaFaive of the Mackinac Center discusses the findings of the report in this Heartland podcast.

The Right-to-Freeload Myth
http://www.heritage.org/research/commentary/2012/12/the-right-to-freeload-myth
James Sherk, senior policy analyst for labor economics at The Heritage Foundation, examines the misleading characterization of employees who opt out of unions as “freeloaders.”

Economic Growth and Right-to-Work Laws
http://heartland.org/policy-documents/economic-growth-and-right-work-laws
This study measures the impact of right-to-work laws on state economic performance. It uses average annual growth rates in employment, real (inflation-adjusted) personal income, and population to measure the economic well-being of right-to-work states. The results show right-to-work laws have a statistically significant and economically meaningful positive impact, though results vary.

Right-to-Work Laws: Liberty, Prosperity, and Quality of Life
http://heartland.org/policy-documents/right-work-laws-liberty-prosperity-and-quality-life
Economist Richard Vedder documents the positive impact of right-to-work laws. He concludes, “Americans generally prefer freedom to coercion, high incomes to low ones, and individual decision making to collective resolution of issues. For these reasons, they generally do not like laws that constrain their labor market behavior and force them to join collectives of other workers to negotiate their wages and working conditions.” 

Rich States, Poor States 2014
http://heartland.org/policy-documents/rich-states-poor-states-7th-edition
The American Legislative Exchange Council (ALEC) released its annual Rich States, Poor States report in April 2014. The report is an economic competitiveness study by economist Dr. Arthur Laffer; Stephen Moore, chief economist at The Heritage Foundation; and Jonathan Williams, director of the Tax and Fiscal Policy Task Force at the American Legislative Exchange Council. The report presents a forward-looking measure of how each state can expect to perform economically based on 15 policy areas that have proven to be the best determinants of economic success.

 

Nothing in this Research & Commentary is intended to influence the passage of legislation, and it does not necessarily represent the views of The Heartland Institute. For further information on this subject, visit Budget & Tax News at http://news.heartland.org/fiscal, The Heartland Institute’s website at http://heartland.org, and PolicyBot, Heartland’s free online research database at www.policybot.org.

The Heartland Institute can send an expert to your state to testify or brief your caucus; host an event in your state; or send you further information on a topic. Please don’t hesitate to contact us if we can be of assistance! If you have any questions or comments, contact Logan Pike, Heartland’s state government relations manager, at lpike@heartland.org or 312/377-4000.

Author
Matthew Glans joined the staff of The Heartland Institute in November 2007 as legislative specialist for insurance and finance. In 2012, Glans was named senior policy analyst.
mglans@heartland.org @HeartlandGR