Right to Work States Enjoy 'Growth Advantage'

Compulsory Unionism Negatively Correlated With Compensation Growth

(source: National Right to Work Committee April 2012 Newsletter)

By prohibiting compulsory union dues, state Right to Work laws spur the growth of private-sector employee compensation in the form of wages, salaries, benefits and bonuses, as well as employment growth.

Last month, the U.S. Commerce Department’s Bureau of Economic Analysis (BEA) issued its estimates for 2011 state personal income. The BEA also issued estimates for an array of specific kinds of income, including employee compensation, at the state level.

The 2011 BEA income data in general, and the compensation data especially, show once again that there is a strong negative correlation between compulsory unionism and economic growth.

Overall, private-sector employee compensation (including wages, salaries, benefits and bonuses) grew by 6.4% nationwide over the past decade, after adjusting for inflation. Historically speaking, this was slow growth.

However, states that protect employees from being fired for refusal to pay dues or fees to an unwanted union typically fared far better than the rest. (From 2001 to 2011, 22 states had Right to Work laws prohibiting forced union dues on the books. Last month Indiana became the 23rd Right to Work state.)

A review of how compensation and jobs grew (or failed to grow) in each state suggests the U.S. Congress could dramatically improve America’s economic prospects for the next decade by repealing forced union dues and fees nationwide.

Current federal law authorizes and promotes the payment of compulsory union dues and fees as condition of getting or keeping a job.

Right to Work States’ 2001-2011 Compensation Increase Nearly Double the National Average

Under pro-forced unionism provisions in the 1935 National Labor Relations Act (NLRA) and the 1951 amendments to the Railway Labor Act (RLA), more than six million private-sector employees must pay dues or fees to their Big Labor monopoly-bargaining agent, or face termination from their jobs.

At the same time, thanks to many years of vigilant efforts by freedom-loving Americans, federal labor law continues explicitly to recognize states’ option to protect employees from forced union dues and fees by adopting Right to Work laws.

Fifteen of the 22 states with Right to Work laws at the time experienced 2001-2011 real private-sector compensation growth of more than nine percent, compared to the national average of 6.4%.

On the other hand, 14 of the 15 bottom-ranking states for compensation growth allow compulsory unionism.

Overall, inflation-adjusted private-sector compensation grew by 12.5% in Right to Work states over the past decade.

That’s quadruple the average for forced-unionism states, and nearly double the national average.

Federal data for long-term private-sector payroll job growth, furnished by the U.S. Labor Department’s Bureau of Labor Statistics, reveal a similarly lopsided advantage for Right to Work states.

Right to Work States Also Enjoy a Big Edge in Private-Sector Job Gains

Nationwide, private-sector payroll jobs declined by 1.45 million, or 1.3%, from 2001 to 2011. In part, this dismal trend is a consequence of the weakest recovery from a national economic downturn since the Great Depression.

However, aggregate private payroll employment in Right to Work states has weathered the storm relatively well, and actually grew by 2.4%.

Meanwhile, private payrolls in forced-unionism states dropped by an average of 3.4%.

“The hard, objective statistics from the U.S. Commerce and Labor Departments help show why S.2173 and H.R.2040 are extraordinarily important pieces of legislation,” commented Mark Mix, president of the National Right to Work Committee.

S.2173 was introduced last month by pro-Right to Work U.S. Sens. Jim DeMint (R-S.C.) and Rand Paul (R-Ky.). H.R.2040 is sponsored by Congressman Steve King (R-Iowa), a stalwart foe of compulsory unionism.

Federal Forced-Dues Repeal Would Help Reinvigorate National Economy

“S.2173 and H.R.2040, also known as the National Right to Work Act, would simply repeal the NLRA and RLA provisions that authorize compulsory union dues and fee payments as a condition of employment,” Mr. Mix 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 S.2173 and H.R.2040. This legislation wouldn’t add one word to federal law.

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

“Leading labor economists such as Dr. Richard Vedder of Ohio University have furnished compelling evidence that forced unionism hinders income and employment growth.

“On top of that, union bosses funnel a huge chunk of the forced dues and fees they collect with federal labor law’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. This is true at the federal, state and local levels.

“The actions of forced dues-funded politicians thus result in less job growth, period. And of course, Big Labor does the most damage in states where union bosses rake in the most forced-dues money.

“But if Congress repealed all the forced-dues provisions in the NLRA and RLA, this massive impediment to economic growth nationwide would quickly be lifted.

“Forced-dues repeal would spur job growth in all 50 states.

“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.

“The 2.6 million Committee members are now lobbying hard to build Capitol Hill support for the pending National Right to Work measures, which already have a total of 100 congressional sponsors.”

Only State Right to Work Laws Can Protect State and Local Public Servants

But as momentous as enactment of a national Right to Work law would be, Mr. Mix cautioned, it would not stamp out the evils of forced union dues and fees nationwide.

“Today, a majority of the American employees under union monopoly control work for the government,” Mr. Mix explained.

“S.2173 and H.R.2040 do not, and indeed cannot, protect teachers and other local and state public employees from compulsory unionism. To accomplish this critical objective, state legislation is necessary.

“For that reason as well as for several others, Committee members are currently fighting to pass Right to Work legislation in states like Missouri, Kentucky, New Hampshire, Maine, Ohio, Michigan and Montana.

“In this fall’s elections, Right to Work will be a cutting issue in state legislative and gubernatorial races across the country, as well as in congressional campaigns and the contest for the White House.”


The National Right to Work Committee relies on your voluntary contributions to fund its programs. Please chip in a $10 contribution today.