Cost of Living-Adjusted, After-Tax Incomes Higher in Right to Work States

Late last week, a narrow 17-16 majority of West Virginia state senators finally acted in accord with the views of the vast majority of ordinary Mountain State citizens who oppose compulsory unionism. As a consequence of the vote, S.B.1, a measure to make West Virginia America’s 26th Right to Work state, passed through the Senate and headed over to the state House of Delegates. (See the news story linked below for more information.)

An array of political observers in Charleston have indicated they believe S.B.1 has sufficient legislative support to make it through the House. Big Labor-backed Gov. Earl Ray Tomblin (D) is, not surprisingly, pledging to veto this measure if it reaches his desk. However, in West Virginia vetoes can be overridden by legislators holding a bare majority of all seats in each chamber. Supermajorities are not required. Consequently, there is a real possibility that the Right to Work, regardless of union membership or nonmembership, of employees in the Mountain State will be restored within the next few weeks.

Protecting the individual employee’s freedom to work without having to pay a union boss for the privilege is the right thing to do. No one should be forced by law to join or financially support a private organization as a condition of employment.

This is especially true because, as even the late Clyde Summers, a Pennsylvania law professor who personally supported monopoly unionism, admitted, under the monopoly-bargaining system, workers who don’t want a union are often made worse off than they were before.

To quote Dr. Summers, “Full-timers may bargain to limit the jobs of part-timers, seniority provisions may disadvantage younger workers, and wage increases of the low skilled may be at the expense of the highly skilled.”

The harmed workers are properly seen as “captive passengers.” There is no even half-way plausible justification for forcing them to pay union dues as a job condition. Yet that’s what current law does in West Virginia.

A secondary, but also important, reason for making West Virginia a Right to Work state is that this reform has enormous potential to boost incomes and jobs — as demonstrated by the experience of states that already prohibit compulsory unionism.

A good illustration is U.S. Commerce Department data for personal disposable income, adjusted for regional cost-of-living differences according to an index calculated by the Missouri Economic Research and Information Center, a state government agency.

They show that in 2014 Right to Work states had an average per capita disposable income of $39,932.

That’s more than $1200 higher than the national average and nearly $2300 higher than the average for the 26 states that still lacked Right to Work protections in 2014. (Wisconsin’s Right to Work law was not adopted until last year.) West Virginia’s cost of living-adjusted per capita disposable income was just $33,733, more than $6000 below the Right to Work average. Every single Right to Work state ranked above West Virginia.

Moreover, the eight top-ranking states for cost of living-adjusted disposable income per capita (Wyoming, North Dakota, Nebraska, Virginia, Texas, Kansas, Iowa and Oklahoma) are all Right to Work states.

Besides enjoying a higher standard of living, employees, employers, and other residents of Right to Work states benefit from faster economic growth. That means that, if West Virginia lawmakers protect employee freedom by passing S.B.1 into law over the next few weeks, there’s ample reason to believe economic growth will accelerate.