Workers in Right to Work States have $4,290 per person more to spend than those in Forced Unionism States
One major omission from labor research on the income differences between Right to Work States and Forced Unionism States, noted CUNY Professor Mitchell Langbert, Ph.D., “is an adjustment for state or local differences in cost of living.” His recent research illustrates the significance of that omission.
Dr. Langbert, an associate professor of business management at Brooklyn College (a City University of New York), shows that 2016 real disposable income per capita in the Right to Work States is $2,310 higher than in forced-unionism states after applying the Missouri Economic Research and Information Center annual interstate cost-of-living index without weighting the data for state population size.
But, the research shows even more. Professor Langbert wanted to dig deeper to find if Right to Work Laws are the most significant factor in raising American’s cost of living-adjusted wages. In fact, he quantified the increase in adjusted wages to be $4,290 per person when controlling for other kinds of deregulation, workforce education, and the other factors.
The study concludes that other labor deregulations are not as important as Right to Work Laws in improving per capita disposable personal income.
Dr. Langbert’s research found that Right to Work states generally “have less labor market regulation (excluding forced unionism) as measured by an index of labor market freedom published by William P. Ruger and Jason Sorens of the Cato Institute.”
To sort out the impact of “competing explanatory variables” on incomes in Right to Work and forced-unionism states, Dr. Langbert chose to use a multiple regression analysis.
Professor Langbert “included state-level measures for exports of manufactured goods per capita, overall state population, the population of the largest city, the percentage of 25-to-44 year olds with BAs or higher, labor market freedom not counting [Right to Work] laws (as measured by the Cato Institute), and the presence of a [Right to Work] law.” And, he included controls for the states of New York, California, and Virginia.
Among the variables selected by Langbert, only the presence 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.
Taking a further step to explain why the significant difference for Right to Work States, Dr. Langbert considered several important demographic differences between Right to Work and compulsory-unionism states.
Langbert observed that forced-unionism states tend to be more urban. The average population size of the largest city in each forced-unionism state is roughly 1.04 million, or nearly double the average for those in Right to Work states.
Langbert asserts that “massive out-migration of people who do not hold at least a bachelor’s degree” from forced-unionism states impact the average educational attainment for Right to Work states. A significant factor causing a forced unionism states’ higher cost-of-living according to Langbert is that special-interest lobbies generally find it much easier to apply political pressures in urban settings:
Centralized urban locations, more commonly found in forced unionism states, reduce interest groups’ costs of organizing. For instance, centralized urban environments reduce the travel expenses to group meetings and political officials’ offices.
Dr. Langbert’s published post summarizing his research on the economic impact of Right to Work laws is available online.
Formerly, Dr. Mitchell was a corporate benefits administrator for several Fortune-listed firms. Over the years, Langbert has published articles in scholarly journals such as the Journal of Labor Research, Econ Journal Watch, and Human Resource Management Journal on topics including the Employee Retirement Income Security Act of 1974, human resource education, and university governance.