Compensation Growth Far Faster in Right to Work States
[singlepic id=1 w=320 h=240 float=left] Today the U.S. Commerce Department’s Bureau of Economic Analysis posted annual personal income data for 2011 on its web site. The data show that Right to Work states continue to enjoy a substantial income growth advantage over forced-unionism states. The Right to Work growth advantage is especially strong when it comes to private-sector compensation – that is, the wages, salaries, bonuses and benefits businesses provide for their employees.
From 2010 to 2011 alone, private-sector compensation increased by 2.2% in the 22 Right to Work states, after adjusting for inflation with the U.S. Labor Department’s consumer price index (CPI-U). In the 28 compulsory-unionism states, real private-sector compensation increased by just 1.7%. (Just this month, Indiana became the 23rd Right to Work state as the law banning forced union dues and fees signed by Gov. Mitch Daniels in early February took effect.)
Over the past 10 years, from 2001 to 2011, real private-sector compensation in Right to Work states grew by 12.5%. That increase is four times as great as forced-unionism states’ aggregate gain of just 3.1%.
The negative correlation between forced-unionism status and private-sector compensation growth is quite strong. In fact, 14 of the 15 states with the least growth (or negative growth) in inflation-adjusted private-sector compensation over the past decade are forced-unionism states. At the same time, 10 of the 14 states with the greatest growth in private-sector compensation are Right to Work states.
At the very least, such data indicate that there’s nothing about compulsory unionism that causes employees’ incomes to grow faster. The data actually point in the opposite direction. That’s undoubtedly why forced-unionism apologists try to avoid any detailed discussion of relative employee compensation growth when they are attacking Right to Work laws.