Right to Work Edge: More Money in Your Pocket

Compulsory Unionism Correlated With Lower Real Compensation

Pro-Right to Work citizens emphatically believe that the individual employee should be free to choose which private organizations, if any, he or she financially supports, regardless of what the government, the business owner, or other employees think.

That’s why, for millions of Americans, compulsory unionism is primarily a moral issue.

At the same time, there is ample evidence Right to Work laws are economically beneficial for employees, employers, and practically everyone else.

One key to understanding the connection between Right to Work and higher living standard is awareness of interstate differences in the cost of living.

The fact is, nonpartisan analysts such as the Missouri Economic Research and Information Center (MERIC), a state government agency, consistently find that compulsory-unionism states as a group have a substantially higher cost of living than do Right to Work states as a group.

MERIC’s data show that the 27 states that had Right to Work laws on the books and in effect in 2018 had a population-weighted cost of living that year of 93.9 — 6.1% below the national average.

The 23 forced-unionism states combined had a population-weighted cost of living of 119.7. or 19.7% above the national average. In short, forced-unionism states were 27.6% more expensive to live in than Right to Work states last year.

In 2018, Right to Work States’ Real Per Employee Compensation Was $49,089

When considered together with MERIC’s cost-of-living data, statistics from the U.S. Commerce Department’s Bureau of Economic Analysis (BEA) show that the real purchasing power of the average Right to Work state employee’s paycheck is greater than it is for the average forced-unionism state employee.

According to the BEA, in 2018 there were 84.493 million full-time and part-time private-sector employees (including contract employees and the self-employed, as well as payroll employees) located in the 27 states that currently have Right to Work laws on the books.

After adjusting BEA data for regional differences in the cost of living with the help of MERIC’s indices for 2018, private-sector employees in Right to Work states earned a total of $4.148 trillion in cash compensation and benefits last year.

That comes to $49,089 per employee. Meanwhile, the 88.439 million private-sector employees in the 23 forced-unionism states together took in $4.205 trillion in cash and benefits, or $47,545 per employee.

Cost of living-adjusted compensation per employee is thus more than $1,500 higher in Right to Work states.

National Right to Work Committee Vice President Mary King commented:

“It makes perfect sense that employees’ real purchasing power would be higher in Right to Work states than in forced-unionism states.

“Union bosses funnel a large portion of the forced dues and fees they collect with federal policy’s abetment into politics.

“And the union-label politicians who routinely get elected and reelected because of their forced dues-funded support overwhelmingly favor higher taxes and more red-tape regulation of businesses both large and small.

“The actions of forced dues-funded politicians thus result in slower revenue growth for business, and that generally means slower growth in pay and benefits for employees.”

Forced-Dues Repeal Would Spur Accelerated Pay Growth in All 50 States

“Of course,” Ms. King acknowledged, “Big Labor does the most damage in states where union bosses rake in the most forced-dues money. But if Congress repealed all the current forced-dues provisions in federal law, this massive impediment to economic growth nationwide would be lifted.

“Employees and businesses based in current Right to Work states would share the benefits as their major out-of-state suppliers and customers were freed from the burden of compulsory unionism. Forced-dues repeal would thus spur accelerated pay growth in all 50 states.”

In the 2019-20 Congress, more and more senators and House members are signing on to forced-dues repeal legislation (S.525/H.R.2571) known as the National Right to Work Act.

Committee members will continue lobbying hard this winter to build Capitol Hill support for forced-dues repeal, vowed Ms. King.

“Congress created the problem of private-sector forced union dues,” she emphasized. “It’s only fair to press Congress to solve it by passing the National Right to Work Act.”

For more about S.525/H.R.2571, see page three of this Newsletter edition.