Topic: EconomicsInvestment

Last updated: March 27, 2019

Supporters of this legislation argue that the laws are necessary to obtain and keep employment in Canada, and that they boost the economy and create jobs.

They back their argument with the right-to-work states in the US that have benefited from a robust economy and more jobs. A report issued by the Fraser Institute indicated that right-to-work laws in Ontario would boost economic output by $11.8 billion and create 57,000 jobs (Ehrenberg & Smith, 2016). This argument is compelling considering that many jobs were lost in Canada when the General Motors Camaro plant was moved from Ontario to Lansing, Michigan following the enactment of the right-to-work legislation. The supporters believe that the legislation will attract investment in Canada and thus create more jobs.

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However, the Frasier Institute overlooked some critical factors that might also contribute to higher economic output and job growth, including looser environmental legislation and lower taxes. Furthermore, the studies focus on states independently instead of comparing the economic output and job growth of a right-to-work state with that of a non-right-to-work state. Economic impacts of these two types of states are dependent on more than one factor. Additionally, the decline in union participation is associated with increasing poverty rates, lower wages and incomes, and less education and infrastructure development.


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