Spendable Incomes Lower in Forced-Dues States 

Workers Prefer to Live Where Their Living Standards Are Higher

Where forced union dues are permitted, workers and other people end up with less purchasing power.

In a paper he wrote for the National Institute for Labor Relations Research a couple of decades 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 to 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 incomes “would attract more workers.”

National Right to Work Committee Vice President Matthew Leen commented:

“Barry Poulson’s analysis explains why forced-dues states like California and New York, which on paper seem to have high incomes, are losing workers and business owners in droves.

“From June 2020 to June 2021 alone, these two states lost a combined total of more than 700,000 people simply as a consequence of net out-migration of their residents to other states.

“And the key reason why is that ordinary citizens understand, as well as if not better than professional economists, that paychecks in Big Labor stronghold states like California and New York don’t go as far as they do in Right to Work states; once cost of living is factored in.

Right to Work States’ Edge in Real, Spendable Income Per Capita: $3,500

Data furnished by the U.S. Commerce Department’s Bureau of Economic Analysis in late September, adjusted for interstate cost-of-living differences according to an index calculated by the Missouri Economic Research and Information Center, a state government agency, show that the average after-tax income per person in Right to Work states in 2021 was $54,716.

That’s roughly $3,500 higher than the forced-dues state average, according to the same analysis, which was recently carried out by the National Institute for Labor Relations Research.

The bottom line,” said Mr. Leen, “is that families in Right to Work states typically have thousands of dollars more to spend each year than families located in forced-unionism states.

“Six of the eight states with the highest real, spendable incomes per capita are Right to Work. And the five states with the lowest spendable real incomes — Hawaii, Oregon, New York, California, and Maine — are all forced-unionism.

“No one should be surprised that union coercion hurts workers, along with small business owners, taxpayers and retirees.”

Mr. Leen elaborated:

“The forced-union-dues system foments hate-the-boss class warfare in many workplaces.

“It helps Big Labor impose and perpetuate counterproductive and costly work rules.

“And union bosses funnel a large share of the forced union dues and fees they collect through this system into the campaigns of Tax & Spend, regulation-happy state and local politicians.

“Undoubtedly, this is an important reason why tax burdens are consistently higher on average in forced-unionism states than in Right to Work states.”

Forced Unionism Apologists Ignore the Relevant Data

Mr. Leen concluded it is only logical that, in states where forced union dues and fees are still permitted, workers and other residents would end up with less purchasing power.

Cost-of-living adjusted, after-tax federal data confirm that’s exactly what happens.

But many commonly cited statistics regarding incomes in Right to Work states ignore regional cost-of-living differences completely.

Some research regarding comparative living standards in Right to Work states and forced-dues states issued by the Big Labor-founded Economic Policy Institute (EPI) purports to factor in regional cost-of-living differences. 

But EPI publications routinely “under-compensate for the effect of living costs on wages,” as a 2015 Heritage Foundation paper demonstrated.

“Ordinary Americans who know in their hearts that compulsion of employees is morally wrong should never allow themselves to be taken in by such special pleading,” concluded Mr. Leen.  

This article was originally published in our monthly newsletter. Go here to access previous newsletter posts.

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