Big Labor economist leaves out important details in Right to Work debate

Big Labor’s favorite economists Gordon Lafer’s ‘study’ “Right to Work, The wrong answer for Michigan’s economy” lists several companies that chose Michigan over Right to Work states, but he left out important details according to Tom Gantert at CAPCON.  Lafer fails to mention that Right to Work states offered no incentives, but Michigan offered millions in tax-incentives.

Not only that, Lafer uses a laughable term to describe ‘forced-unionism states;’ he refers to them as “free bargaining states.”  As most know, unions are still able to bargain in Right to Work states.  But, what union bosses cannot do is force employees to pay union fees against their will.  For Lafer to refer to compulsory-unionism states as ‘free bargaining’ illustrates the insincerity of his analysis.


Lafer wrote, “Indeed, a series of recent corporate announcements make clear that many auto industry companies continue to prefer Michigan over right-to-work competitors …”

But Lafer never mentioned that some of those businesses cited in his report received deals for millions of dollars in tax incentives to locate in Michigan while the competing states offered no incentives, according to research done by Michigan Capitol Confidential.

In fact, even the Michigan Economic Development Corp. says those companies wouldn’t have picked this state had it not been for the MEDC’s handouts.

MEDC memos received in a Freedom of Information Act request involving the businesses stated in Lafer’s report paint a picture of a state that has difficulty competing with right-to-work states without offering tax breaks. The memos refer to lower taxes and personnel costs in right-to-work states as a reason Michigan has to offer millions in incentives to attract the businesses.

“He (Lafer) is listing successes that are actually evidence of failure,” said James Hohman, assistant director of fiscal policy at the Mackinac Center for Public Policy.

Hohman said Michigan’s failure was its inability to provide “an attractive business environment where these businesses would set up in lieu of special favors.”

In an email, Lafer defended his decision not to mention that Michigan was the only state offering subsides to those businesses among the states they were considering.

“Whether some of these individual examples were swayed by state incentives or not, this doesn’t change the big picture of economic reality. The list of auto industry companies choosing to locate in Michigan and other free-bargaining states is extremely large, both smallish and very big projects. In general, every state provides some kind of economic development incentives for companies considering locating into their states, for projects of any significant size. This is certainly true of the auto companies locating in the states with ‘right to work’ laws — I believe Mississippi provided over $300 million in benefits for one Toyota plant.  But there are many reasons for the companies, both auto and elsewhere, to choose to locate in Michigan, Ohio, Indiana, California, Delaware, and other free bargaining states other than economic incentives provided by the state.  These are detailed in my report and you can find them elsewhere, including in the surveys of actual corporate location decision-makers.”

A “free-bargaining” state is also known as a state where union membership may be made compulsory on an employee.

But the MEDC’s own briefing memos on four businesses cited in Lafer’s report highlight Michigan’s difficulties competing with right-to-work states on a level playing field.