Nine of the Top 10 States For 2002-2012 Private-Sector Job Growth Have Right to Work Laws


Total full-time and part-time employment by industry (SA25, SA25N)

Compensation of employees by industry (SA06, SA06N)

New and revised U.S. Commerce Department data show that over the past decade private-sector employment grew more than twice as fast in the 22 states that had Right to Work laws on the books throughout the period than in forced-unionism states.  Image:

Today the U.S. Commerce Department’s Bureau of Economic Analysis (BEA) issued its initial estimates for total 2012 private-sector, nonfarm employment in the 50 states.

The BEA simultaneously issued revised estimates for overall state personal income and an array of specific kinds of income, including employee compensation in the form of wages, salaries, benefits and bonuses.

The 2012 BEA employment and income data show once again that there is a strong negative correlation between compulsory unionism and economic growth.

Nationwide, private-sector, nonfarm employment as reported by the BEA grew by 10.2% from 2002 to 2012. (Unlike the establishment jobs data published by the U.S. Labor Department’s Bureau of Labor Statistics, BEA data track self-employment and contractual employment as well as payroll jobs.) Historically, this was a weak gain.

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. Twenty-two states had Right to Work laws prohibiting forced union dues on the books throughout the last decade. Early last year Indiana became the 23rd Right to Work state.  And late last year, Michigan adopted a Right to Work law which took effect this spring.

Nine of the top 10 states for 2002-2012 private-employment growth are Right to Work states. Meanwhile, the 11 bottom-ranking states for employment growth all lacked Right to Work statutes throughout the period.  (Since Indiana switched over to Right to Work in 2012, it is excluded from this analysis.)

Overall, BEA-reported private-sector, nonfarm employment in Right to Work states grew by 15.3% over the past decade. That’s more than double the 7.3% average for forced-unionism states, and nearly half again as much as the national average. (See the first link above for more details.)

And workers in forced-unionism states suffer from lower compensation growth as well as fewer job opportunities.

From 2002 to 2012, inflation-adjusted private-sector compensation increased by 14.2% in Right to Work states. That’s more than 1.6 times as much as the national average and more than double the forced-unionism state average of 6.1%. (See the second link above for more information. The BEA data are adjusted for inflation using the Labor Department’s CPI-U indicator.) All of the 12 bottom-ranking states for compensation growth lacked Right to Work laws from 2002 to 2012.