Job Growth Twice as Fast in Right to Work States

Voluntary Unionism Also Linked to More Rapid Compensation Growth

(Click here to download the April 2015 National Right to Work Newsletter)

On March 17, the U.S. Labor Department’s Bureau of Labor Statistics (BLS) issued its estimates for 2014 annual payroll employment in the 50 states. The BLS also issued revised state payroll-employment estimates for previous years.

Last month’s release added yet another layer to the pile of evidence that new job seekers and employees vying for better opportunities alike benefit from the accelerated economic growth enjoyed by states, now 25 in number, that prohibit compulsory union dues and fees.

According to new and revised data now available on the BLS website, from 2004 to 2014 private-sector payroll employment in Right to Work states grew by 9.9%.

That’s roughly double the overall increase of 5.1% experienced by forced-unionism states.

(Because Indiana’s and Michigan’s Right to Work laws took effect in February 2012 and March 2013, respectively, they are excluded from this analysis.

Because Wisconsin became a Right to Work state only this year, it is counted as forced-unionism here.)

Year after year, the negative correlation between compulsory unionism and employment growth is robust. For example, from 2013 to 2014 alone, 12 of the 14 bottom-ranking states for private-sector payroll job growth lack Right to Work laws.

Five of the Six States With the Highest 2014 Job Growth Are Right to Work

But five of the six top-ranking states for annual private job growth in 2014 have Right to Work protections for employees.

Federal data for private-sector wage, salary, and other compensation growth, furnished by the U.S. Commerce Department’s Bureau of Economic Analysis (BEA), reveal a similarly lopsided analysis for Right to Work states.

Overall, inflation-adjusted private-sector employee compensation (including bonuses and the dollar value of benefits as well as wages and salaries) grew by 10.0% nationwide from 2004 to 2014.

But in the 22 states that had Right to Work laws on the books for the entire decade, real compensation grew by 15.3% on average, compared to an average of just 8.4% for the 26 states that lacked Right to Work laws for the whole period.

“The hard, objective statistics from the U.S Labor and Commerce Departments help show why H.R.612 and S.391 are extraordinarily important pieces of legislation,” commented Mary King, vice president of the National Right to Work Committee.

H.R.612 was introduced in late January by pro-Right to Work Congressman Steve King (R-Iowa). S.391 was filed early the following month by Sen. Rand Paul (R-Ky.), a stalwart foe of compulsory unionism.

Federal Forced-Dues Repeal Would Help Reinvigorate National Economic Growth

“H.R.612 and S.391, also known as the National Right to Work Act, would simply repeal the current federal labor-law provisions that authorize compulsory union dues and fee payments as a condition of employment,” Ms. King explained.

“When forced-dues repeal becomes law, private-sector employees in all 50 states will have the freedom to choose as individuals whether or not to join or pay dues to a union, without facing job loss as a consequence of their decision.

“Restoring the personal freedom of millions of American employees is the direct and primary purpose of H.R.612 and S.391.

“This legislation wouldn’t add one word to federal law.

“At the same time, of all the economic reforms Congress may consider this year, King-Paul would probably have the strongest positive impact for incomes and jobs.

“As eminent statistician and Yale professor emeritus Edward Tufte has observed, ‘Correlation is not causation but it sure is a hint.’

“I submit that the very robust correlation between Right to Work status and faster job and compensation growth ‘sure is a hint’ that banning forced union dues is economically beneficial.

“And I’m confident that, once forced-dues repeal is adopted and signed into law, it will spur job growth in all 50 states.”