Forced-Unionism States’ Unfunded Pension Liabilities Equal Nearly a Third of Their Combined GDP

A new report by State Budget Solutions (or SBS, see the link below) adds to the evidence that, as good as government union officials empowered with monopoly-bargaining and forced-dues privileges are at pushing for higher taxes, they are even better at jacking up governments’ long-term spending commitments.  As a consequence, states that give more special privileges to public-sector union officials burden their citizens with more debt as well as heavier taxation.

In the aggregate, state public pension plans are underfunded by $4.7 trillion, according to SBS.  That adds up to over $15,000 per American. But debt levels vary sharply from state to state.  And there is a strong negative correlation between a state’s per capita indebtedness and its having a Right to Work law on the books barring the extraction of forced union dues and fees from employees as a job condition.

The 26 states without such a law have an average unfunded pension liability of $18,215 per capita.  In contrast, the 24 states with Right to Work laws on the books have a still large, but much more manageable average pension liability of $11,315 per capita.

All of the seven states with the greatest per capita pension liability (Alaska, Connecticut, Hawaii, Illinois, New Jersey, New Mexico and Ohio) lack Right to Work laws.  But nine of the 10 states with the lowest per capita pension liability (Arizona, Florida, Georgia, Idaho, Indiana, Nebraska, North Carolina, South Dakota and Tennessee) are Right to Work states.  The only state in the bottom 10 for per capita unfunded liabilities that does not currently prohibit forced union dues, Wisconsin, actually did adopt a statute in 2011 protecting the Right to Work of all K-12 employees and many other public-sector workers.

Expressed as a share of 2013 Gross Domestic Product by State, the average unfunded pension liability for forced-dues states is 32.3%, compared to an average 0f 23.4% for Right to Work states.

Obviously, Right to Work laws in themselves do not suffice to prevent politicians from making pension promises to public employees that taxpayers can’t reasonably be expected to fulfill.  But they do appear to help keep politicians’ irresponsibility from getting totally out of hand.

On average, forced-dues states’ unfunded pension, health-care, and other liabilities are nearly 40% higher as a share of annual economic output than are those of Right to Work states. Image: Getty

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