Higher Cost of Living-Adjusted Incomes in Right to Work States ‘Attract More Workers’

In a paper he wrote for the National Institute for Labor Relations Research a decade ago, economist Barry Poulson raised a point that seems obvious, but is generally overlooked in both academic and media analyses of relative living standards in the 50 states:

People in general, and workers in particular, are more likely to move into jurisdictions where they can furnish a higher standard of living for themselves and their family members than they have been enjoying up to the time of their move.  As a rule, workers do not flock to places where they expect their living standards will be lower.

“We expect,” wrote Dr. Poulson, that jurisdictions with higher cost of living-adjusted household incomes “would attract more workers.”

Applying this simple criterion makes it clear employee living standards are higher in Right to Work states than in forced-unionism states.

U.S. Census Bureau data show that, as of 2013, there were 2.0 million fewer people in their peak-earning years (aged 35-54) in the 26 states that lacked Right to Work laws at that time than there had been a decade earlier. Meanwhile, in the 22 states that had Right to Work laws on the books for the entire decade, there were 1.7 million more people aged 35-54 in 2013 than there had been in 2003.

(Indiana and Michigan, which passed Right to Work laws in 2012, are excluded from the above calculations. Wisconsin, which adopted its Right to Work law just this month, is counted as a forced-unionism state here.)

Among the 11 states suffering the greatest losses of residents in their peak-earning years from 2003 to 2013, 10 (Alaska, Maine, Montana, New Hampshire, Ohio, Pennsylvania, Rhode Island, Vermont, West Virginia, and Wisconsin) were still forced-unionism in 2013, and one (Michigan) has a Right to Work law that only took effect in March of that year.  Meanwhile, among the nine states enjoying the greatest gains in peak-earning-year residents, every single one (Arizona, Florida, Georgia, Idaho, Nevada, North Carolina, South Carolina, Utah and Texas) is a Right to Work state.

As the Institute has previously reported, U.S Commerce Department data, adjusted for cost-of-living differences according to an index calculated by the Missouri Economic Research and Information Center (MERIC), a state government agency, show that average annual compensation per employee is higher in Right to Work states than in forced-unionism states.

But it isn’t really necessary to use MERIC’s indices and Commerce statistics to understand that employees have more and better opportunities to raise their living standards in Right to Work states.  All you have to do is look at which states working-age people and their families are voting for with their feet!

Domestic migration data make hash of propaganda claims by union bosses such as Teamsters czar Jim Hoffa (see the link below) that Right to Work laws “attack working families.”  Strike out “attack,” and substitute “attract,” and then Hoffa would have it right.  If you accept the fact that working families know what’s in their own best interest, then you must conclude that Right to Work laws serve the economic interests of such families.

Hoffa: Right-To-Work In Wisconsin Is Another Step Down …