New Study: “Right to Work” Law Could Spur New Mexico’s Economy, Create Thousands of New Jobs

(Albuquerque) According to a new Rio Grande Foundation report by adjunct scholar Eric Fruits, PhD, New Mexico would benefit greatly from passage of Right to Work legislation. The full study, “Right-to-Work and Economic Growth A Comprehensive Analysis of the Economic Benefits to New Mexico of Enacting a Right-to-Work Law” is available online.

Such legislation would, prohibit agreements between labor unions and employers that make union membership, payment of union dues, or union fees a condition of employment, either before or after hiring. Right-to-work laws also prohibit “closed shop” agreements in which an employer agrees to hire union members only, and employees must remain members of the union at all times in order to remain employed.

Looking backward, the analysis finds that if New Mexico had enacted right-to-work legislation in 1980 (such a law passed the legislature—but was vetoed by the governor—in 1979 and 1981):

• New Mexico’s employment in 2011 would have been approximately 21 percent higher (169,400 more people working);

• New Mexico’s 2011 personal income would have been 21 percent higher ($15.7 billion); wage and salary income also would have been 21 percent higher ($7.4 billion).

Looking forward, if New Mexico enacts right-to-work legislation effective 2013, the empirical results indicate that the state would see a permanent boost in employment and income growth.

• By 2020, New Mexico would have 42,300 more people working as a right-to-work state, with more that 2,000 in increased manufacturing employment;
• By 2020, the state’s personal income would be nearly $5 billion higher and wage and salary income would be $2.2 billion higher.

Twenty-three states (including most of New Mexico’s neighbors) have Right to Work laws in place. As a group, they have enjoyed more rapid employment growth, better job preservation, and faster recoveries from recession.

This study employs a comprehensive macroeconomic database to measure the impact of right-to work statutes. It also estimates the effect on New Mexico’s economy that would likely follow if the state adopted a right-to-work policy this year. The findings indicate unambiguously that New Mexico would enjoy an employment and income windfall.