2019 Value of $1,000 in America’s Least Affordable States*
*Source: Missouri Economic Research and Information Center (MERIC)
Early this month, the Jefferson City-based Missouri Economic Research and Information Center (MERIC), a state government agency, published its latest set of state comparative cost-of-living indices.
The new indices estimate the average annual cost of living in 2019 for each state, as well as for the District of Columbia and Puerto Rico. The National Institute for Labor Relations Research has now used these data to calculate average annual costs of living for Right to Work and for forced-unionism states.
Twenty-seven states have already adopted and implemented Right to Work laws protecting employees from federal labor law provisions authorizing forced union dues and fees as a job condition.
The 27 Right to Work states combined had a population-weighted cost of living 6.3% below the national average in 2019. The 23 forced-unionism states combined had a population-weighted cost of living 19.6% above the national average. Consequently, on average, forced-unionism states were 27.7% more expensive to live in than Right to Work states last year.
(MERIC itself does not weigh states based on population size in calculating its indices. For that reason, the national average for population-weighted states does not equal 100.)
The correlation between forced-unionism status and a higher cost of living is robust. Not one of the 14 highest-cost states in 2019 has a Right to Work law. But 13 of the 15 lowest cost-of-living states protect employees’ Right to Work.
There is a compelling case to be made that compulsory unionism actually fosters a higher cost of living.
Union officials wielding forced-dues privileges funnel a large share of the conscripted money they reap into efforts to elect and reelection politicians who favor higher taxes and heavier regulation of business. And many economists credibly argue that excessive government regulation is a major factor behind high housing, energy, and other costs in forced-unionism states like California, New York, New Jersey, Connecticut and Massachusetts.
Moreover, decades of academic research by economists such as Thomas M. Carroll and Richard J. Cebula have shown that one side benefit of state Right to Work laws is that they help reduce the cost living in the jurisdictions where they are in effect.
Even in the highly unlikely event it could be established that forced unionism did not cause higher living costs, the strong correlation between forced unionism and higher costs would still be relevant in assessing the economic impact of Right to Work laws. What matters most to employees seeking better lives for themselves and their families and employers seeking good employees is not nominal wage and salaries. It is what those salaries can buy in the location where they are earned.
That’s why, when U.S. Commerce Department data on total personal income and disposable personal income per capita are published next month, honest efforts to make comparisons between Right to Work and forced-unionism states will always be informed by MERIC’s or some other nonpartisan comparative cost-of-living index.