Non-RTW State Leads Nation in Business Creation

ST. LOUIS — Right-to-Work (RTW) laws are supposed to be good for business creation, but in reality it only boosts business creation by cutting wages.


Missouri, which is not a RTW state, led the nation in business creation.


The data from the Census Bureau, show that in 2013, the latest full-year statistics available, Missouri jumped 16.7 percent in business creation. Even the 10 other states with increases lagged far behind.


Kentucky, also not a RTW state, finished second with a 6 percent increase in business creation. But its newly elected right wing Republican governor has put changing that status atop his economic agenda.


Statistics show that RTW states consistently produce lower pay – thousands of dollars per year per worker — and fewer protections for workers. But businesses justify their pro-RTW campaigns by saying RTW creates new businesses, which in turn create jobs.


The data, released by the U.S. Census Bureau, show there were 1,293 more businesses created in Missouri in 2013, the most recent year for which data is available, than in 2012. Missouri had 7,759 new businesses in 2012, and that number swelled to 9,052 in 2013.


All states created more businesses but only 11 states reported increases in new business creation in 2013, compared to 2012. Only three right-to-work states – Nevada, Arizona and Mississippi – saw any kind of new business growth. Mississippi and Arizona grew less than half a percentage point, while Nevada, at 4.25 percent, lagged far behind Missouri. The other eight growing states, led by Missouri and Kentucky, were non-RTW.


“Right-to-work doesn’t spur new business development,” said Mike Louis, president of the Missouri AFL-CIO. “Business is created through innovation and workers earning a decent wage, which they can then invest in the economy.”


“Because of Missouri organized labor, there is a well trained workforce in Missouri that is ready willing and able,” Louis added.


Right-to-work doesn’t grow the economy, it depresses wages, meaning consumers have less buying power and are less likely to support new businesses.


Source: PAI