The Fraser Institute

The Fraser Institute

September 03, 2013 09:32 ET

The Fraser Institute: Worker Choice Laws Could Boost BC Employment, Manufacturing and Economic Growth

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Sept. 3, 2013) - British Columbia would likely see increased economic growth if the provincial government enacted worker choice laws similar to those in place in 24 U.S. states, concludes a new report published today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

"Evidence from the United States shows that states with worker choice laws experience a 1.8 per cent increase in GDP as well as a 1.0 per cent increase in employment," said Jason Clemens, Fraser Institute executive vice-president and co-author of The Implications of US Worker Choice Laws for British Columbia and Ontario.

According to the study, that would translate to an increase in BC's total economic output of $3.9 billion (about $844 per capita) and an increase employment of about 19,000 jobs.

Worker choice laws, also known as right-to-work laws in the U.S., allow workers to opt out of paying union dues. A wide body of academic research has found that right-to-work laws result in lower union membership while increasing economic and employment growth.

In U.S. states with worker choice laws, unionization in the private sector is 3.9 per cent. In states without worker choice laws, private sector unionization is 10.0 per cent. Compare that to British Columbia, where private sector unionization in 2012 was 18.1 per cent.

"Worker choice laws don't prevent unionization but they give workers a choice. And when workers have a choice, they choose unions less often," Clemens said.

In The Implications of US Worker Choice Laws for British Columbia and Ontario, authors Clemens, Niels Veldhuis, and Benjamin Zycher examine the effects of right-to-work laws in the U.S. and apply the findings to BC.

The study also looks closely at the experience of Oklahoma, which became a right-to-work state in 2001. Oklahoma provides a unique example of the effects of right-to-work policies because it shares a border with seven states, four of which adopted right-to-work laws well before it did.

A conservative application of the econometric findings in the study, combined with the data on the Oklahoma experience, suggest that a right-to-work policy would increase manufacturing output in British Columbia by about $200 million. Over a 25-year period, manufacturing output would be higher by more than five per cent.

"Since none of BC's geographic neighbours currently have worker choice policies in place, the province could gain a distinct advantage in attracting business investment if it was the first to embrace some form of worker choice policies," Veldhuis said.

"Such a move would provide more employment opportunities for BC workers and their families."

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The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of 86 think-tanks. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org.

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