Today roughly 52% of Americans live in one of the 28 states that have adopted Right to Work laws prohibiting the termination of employees for refusal to pay dues or fees to a union they don’t want, and never asked for.
Twenty-two states have had such a law for at least a decade and a half. But six other states, including Kentucky and Missouri, which barred compulsory union dues just this year, have adopted Right to Work protections for employees since early 2012.
State Right to Work laws simply ensure that the individual employee’s freedom not to join or bankroll a union is afforded the same protection as the freedom to join and bankroll a union. After all, as U.S. Supreme Court Justice William Brennan’s 1984 majority opinion in Roberts v. Jaycees acknowledged, “Freedom of association . . . plainly presupposes a freedom not to associate.”
The extraction from employees of forced financial support for a labor organization as a job condition is primarily a moral issue, rather than an economic one.
However, proponents of compulsory unionism have focused heavily on economics in waging public campaigns against Right to Work measures. Consequently, Right to Work advocates need to be well-informed about the actual economic performance of states that have prohibited compulsory unionism.
One fact that Big Labor apologists often ignore completely is the substantial cost of living advantage Right to Work states as a group enjoy over forced-unionism states as a group.
Data calculated and published by the Missouri Economic Research and Information Center, a state government agency, show that in 2016 forced-unionism states (then 26 in number) were on average 25.6% more expensive to live in than Right to Work states. (See the chart above for more information.)
Just this spring, City University of New York (CUNY) professor Mitchell Langbert conducted a statistical study to determine whether and to what extent Right to Work law raise cost of living-adjusted disposable incomes and employees’ earnings. (See the first link below.)
To answer these questions and sort out the impact of “competing economic variables” on incomes in Right to Work and forced-unionism states, Dr. Langbert used a technique known as “multiple regression analysis.”
As he pointed out, there are several significant demographic differences between Right to Work states as a group and forced-unionism states as a group, and there are also policy differences other than voluntary vs. compulsory unionism.
In his regression analysis, he included “state-level measures for exports of manufactured goods per capita, overall state population, the population of the largest city, labor market freedom not counting [Right to Work] laws (as measured by the Cato Institute), and the presence of a [Right to Work] law.”
He also included special controls for the unique characteristics of two forced-unionism states, California and New York — and one Right to Work state, Virginia.
Among the variables selected by Dr. Langbert, only the presence/absence of a Right to Work law and the percentage of 25-44 year-olds with at least a bachelor’s degree education had a statistically significant impact on annual wages.
Ultimately, he determined that the annual Right to Work boost for real wages in $4290 per employee, after controlling for other kinds of deregulation, workforce education, and other factors.
“Other kinds of labor deregulation are not as important” in raising incomes as Right to Work laws, Dr. Langbert concluded.
Even an analysis that does not control for demographic and other differences between Right to Work and forced-unionism states shows a substantial, albeit more modest, earnings advantage for states that protect employee freedom.
According to the U.S. Commerce Department’s Bureau of Economic Analysis (BEA),in 2016 there were 78.576 million full-time and part-time private-sector employees (including contract workers and the self-employed as well as workers on company payrolls) located in the 26 states that then had Right to Work laws. (See the second link below.)
After adjusting for regional differences in the cost of living with the help of MERIC indices, private-sector employees in Right to Work states earned a total of .$3.681 trillion in cash compensation and benefits like health insurance last year. (See the third link below.) That comes to $46,841 per employee.
Meanwhile, the 87.510 million private employees in forced-unionism states earned a total of $3.937 trillion in cash compensation and benefits.
Cost of living-adjusted compensation per private-sector employee is thus, according to the most recent available data, roughly $1850 higher in Right to Work states than in forced-unionism states.
Total Full-Time and Part-Time Employment by Industry (SA25, SA25N)
Compensation of Employees by Industry (SA6, SA6N)
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