The union membership rate of Americans working stands at 11.3%, or 14.5 million, according to the U.S. Bureau of Labor Statistics. In the last two decades, that percentage fell by 45%, despite a doubling in public employee unions. One of the major reasons for private sector unionization’s 80% collapse to only 6.7% of American workers is the availability of Right to Work states and the auto industry’s enthusiasm to relocate.
From 2002 to 2012, the total U.S. automotive manufacturing output in Right to Work states grew from 21% to 52%.
By the 1960s, the auto industry was almost 100% unionized, after first organizing the Flint, Michigan, General Motors Plant in 1936. But with Michigan’s loss of more than 800,000 jobs over a decade, mostly in the auto industry, and with Detroit on the verge of bankruptcy, both Michigan and Indiana’s legislatures were forced to pass laws against mandatory payment of union dues in 2012. Over 70% of all domestic manufacturing of autos and automotive parts is produced in Right to Work states, and the percentage is still rising.
Florida was the first state to pass the Right to Work law in 1943. Arizona and South Dakota came next in 1946. Georgia, Iowa, Nebraska, North Carolina, North Dakota, Tennessee, and Virginia followed suit during the boom year of 1947 in response to the growing influence of the labor movement. But in the decade before Indiana and Michigan became Right to Work states in 2012, Right to Work state’s share of nationwide automotive manufacturing output grew from 36% to 52%, and real manufacturing GDP in those 22 Right to Work states grew by 87%,” but “fell by 2% in forced-unionism states,” according to the National Institute of Labor Relations Research.
As the auto industry shuttered plants and moved to Right to Work states, Michigan lost 813,100 jobs or -17.4% of its employed workers in what has been referred to as the “Lost Decade.” Federal Reserve Bank of Chicago economist Paul Traub observed that “During the 2000s, the income disparity between Michigan and the rest of the country grew quite a bit. This may have been due in part to ‘brain drain’ from Michigan” as workers followed the jobs to Right to Work states.
But embracing Right to Work laws may already be driving employment in the auto industry, which is still Michigan’s dominant business sector. The state’s unemployment rate dropped from 10.4% in 2011 to 8.7% in 2013 after Right to Work legislation became law. According to Michigan Governor Rick Snyder’s 2014 Budget, he expects the state’s growing auto and automotive parts production growth to drive unemployment down to 6.7% in 2016.