Right to Work States Enjoy 2-to-1 Advantage in Civilian Household Employment Growth
The five states with the highest annual salaries for nurses, in purchasing-power terms, are Wyoming, Nevada, Michigan, Texas and Arizona — all Right to Work states. Meanwhile, the five bottom-ranking jurisdictions for nurses’ purchasing power are Maryland, New York, Vermont, the District of Columbia, and Hawaii — all forced-unionism.
On Monday, NILRR began a series of posts dedicated to looking more closely at the data presented in Institute’s April 27th fact sheet edition of “Right to Work States Benefit from Faster Growth, Higher Real Purchasing Power.”
The first post in the series focused on total private-sector employment growth as measured by the U.S. Commerce Department’s Bureau of Economic Analysis (BEA). Today’s post considers another key gauge of job growth, civilian noninstitutional employment as reported by the U.S. Labor Department’s Bureau of Labor Statistics (BLS).
There are several major differences between these two indices, the most important being that civilian noninstitutional employment includes both public and private employment, instead of private employment only.
While for the vast majority of the 20th Century U.S. public employment grew more rapidly than private employment, in recent years the number of government jobs has grown more slowly than the number of private jobs. One significant cause is that the nationwide population of K-12 school-aged children (aged 5-17) grew only about a tenth as much, in percentage terms, as adult population (aged 18 and over) from 2005 to 2015, and public education jobs constitute the vast majority of all state and local government employment in the U.S.
It’s not surprising, then, that nationwide growth in civilian employment (otherwise known as household employment) over the past decade has been substantially slower than nationwide growth in BEA-reported private-sector employment. However, total household employment and private-sector employment alike have been far more rapid in Right to Work states than in forced-unionism states.
The 22 states that already had Right to Work laws on the books back in 2006 enjoyed overall household employment growth of 8.1% over the next 10 years. Meanwhile, aggregate employment in the 24 states that still lacked Right to Work protections for employees as of the end of last year grew by just 3.5%, or less than half the Right to Work average.
(See the first link below for more information. The four states that switched from forced unionism to Right to Work between 2012 and 2016 — Indiana, Michigan, Wisconsin, and West Virginia — are excluded from this analysis and what follows in the next paragraph. Kentucky and Missouri, whose Right to Work laws were adopted this year, are counted as forced-unionism states here.)
Eight states suffered employment losses of at least 0.5% from 2006 to 2016. Of these, seven were non-Right to Work states. Meanwhile, all of the top four states for 10-year employment growth are Right to Work.
In addition to being correlated with faster job growth, Right to Work laws are correlated with higher real compensation per private-sector employee.
U.S. Commerce Department data, adjusted for interstate differences in cost of living according to an index calculated by the Missouri Economic Research and Information Center (MERIC), a state government agency, show that average compensation per private-sector employee in Right to Work states in 2015 was $46,057. That’s $1582 higher than the average for forced-unionism states.
Other analyses from government and private statisticians with no ax to grind on the issue of mandatory vs. voluntary unionism have similarly shown that workers’ cost of living-adjusted pay is higher in Right to Work states.
For example, according to a recent report published by the personal finance web site WalletHub (see the second link below to read the whole thing), the five states with the highest annual salaries for nurses, in purchasing-power terms, are Wyoming, Nevada, Michigan, Texas and Arizona — all Right to Work states. Meanwhile, the five bottom-ranking jurisdictions for nurses’ purchasing power are Maryland, New York, Vermont, the District of Columbia, and Hawaii — all forced-unionism.