Right to Work States Dominate U.S. Automotive Manufacturing

Yesterday, the U.S. Commerce Department’s Bureau of Economic Analysis issued its first state-by-state estimates for manufacturing output of motor vehicles, bodies and trailers and parts in 2015 and revised data for earlier years (see the link below for more information).  The data show that  71.8% of U.S. auto production that year occurred in one of the 25 states that had Right to Work laws on the books at the time.

As recently as 2005, just 25.4% of the total U.S. output in automotive factory emanated from Right to Work states (then 22 in number).

A large share of the Right to Work growth from 2005 to 2015 can be accounted for by the fact that Michigan and Indiana, respectively #1 and #2 in automotive manufacturing output, both passed laws prohibiting compulsory unionism in 2012. But this is far from the whole story.

Excluding Michigan and Indiana from the U.S. total, and considering just the 22 states that had Right to Work laws from 2005 to 2015, the Right to Work share of U.S. automotive manufacturing output grew from 41.4% to 53.0% over the decade. Real automotive manufacturing GDP in these 22 states grew by 58.3% from 2005 to 2015, but fell by 1.7% in the 25 states that still lacked Right to Work protections as of 2015.

The overwhelming advantage Right to Work states states have enjoyed over forced-unionism states in attracting automotive manufacturing investment ought to put the burden of proof on Big Labor legislators in forced-unionism states like Ohio and Pennsylvania who claim it makes no difference to companies considering new plant construction or expansions whether unionism is voluntary or not.

If that’s the case, how do they explain why automotive manufacturing is soaring in Right to Work states as a group, but stagnant in forced-unionism states as a group?

Real GDP in chained dollars