Can New Mexico Finally Have a Right-to-Work Law?

A perfect economic-development tool for an era of fiscal austerity

Legislators are meeting in special session to consider Government Michelle Lujan Grisham’s “relief package for New Mexicans who have been affected by the economic devastation of the COVID-19 pandemic.”

No one questions the need. With one of the worst unemployment rates in the nation and a seven-month decrease of over 43,000 jobs, the Land of Enchantment’s economy is teetering on the edge of oblivion — and the social and cultural costs are all but incalculable.

Unfortunately, the governor’s “relief package” amounts to nothing more than spending hundreds of millions of dollars — “through a transfer of previously received federal funds” — on “direct unemployment assistance,” “a grant program for New Mexico-owned small businesses,” “emergency housing assistance,” and “emergency food bank services.”

The state’s economic strength is battered by absurdly unnecessary orders said to protect “public health” as well as limp demand on the international petroleum market, so turning to Washington for cash appears to be the quick and easy “solution.” But it’s far from sustainable. Gridlock will be the inevitable outcome of the 2020 presidential and congressional elections, and with the national debt surpassing $27 trillion, D.C.’s addiction to debt-driven largess will soon end, by choice or by necessity.

If New Mexico is to ever recover, it must grow its way out of its current woes. Fortunately, there is something legislators and the governor can do, at no cost, to promote economic development in the state: pass a right-to-work (RTW) law.

Credible researchers and site-selection consultants have consistently found that banning compulsory unionism in the private sector makes a state more attractive to investment. Whether it be for factories, logistics hubs, R&D centers, or corporate headquarters, many industries and enterprises prefer RTW to non-RTW states — often by a wide margin.

Investment notices posted on the website of Area Development illustrate RTW’s superiority. Founded in 1965, the publication “is considered the leading executive magazine covering corporate site selection and relocation.” (It it issued “quarterly and has 44,000 mailed copies.”)

KIVA documented the data for Area Development’s “NEWS ITEMS” between October 1st and October 31st. The contrast was striking. In total, 96 investments were announced. For example, Chapin International, “a manufacturer of metal compressed air sprayers,” chose “to relocate segments of existing operations in New York and Ohio” to a facility in Mount Vernon Kentucky. WOW Studios, “a Seattle-based luxury technical sportswear company,” is relocating 50 employees to “downtown Tucson, Arizona.” INCOG BioPharma Services “plans to establish its first manufacturing facility and global headquarters in Fishers, Indiana.” Pratt & Whitney will “invest approximately $650 million to bring a new high-tech turbine airfoil production facility to Asheville, North Carolina,” creating “800 jobs through 2027.” And GS Performance, “a Glock handgun accessory and parts manufacturer, will invest $6.9 million to relocate its headquarters, manufacturing and distribution operations” from San Diego, California to Nashville, Tennessee.

Eighty of the 96 investment announcements targeted RTW states. In terms of employment, RTW dominated to an even greater degree, garnering 88.9 percent of jobs to be created. (See chart below.)

The top job-creating states all have RTW laws: North Carolina (3,247), Texas (2,350), Kansas (1,400), Georgia (1,303), and South Carolina (1,098). Among non-RTW states, Ohio (690) fared best.

RTW scored decisive wins in every category of investment examined: greenfield projects (48 to 10), expansions of existing facilities (27 to 6), and relocations made from one type of RTW-status state to the other (5 to 0).

Economic development is not as simple as passing one law and watching wealth bloom, of course. Companies weigh many factors in making investment decisions, from infrastructure quality to weather risks, workforce skills to tax burdens. But given the overwhelming evidence that RTW is a job-creator, it is lamentable that Santa Fe refuses to implement a no-cost policy that would surely make New Mexico much more attractive to businesses and entrepreneurs.

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