Forced-Unionism Connecticut and Massachusetts Are Hardly Economic Role Models
If the elected officials of Big Labor-controlled Rhode Island really want more and better opportunities for employees in their state, it makes little sense for them to imitate politicians in other slow-growth forced-unionism states. Image: Copyright Lee McLaughlin
Providence-based public radio political analyst Scott MacKay is sneering at the latest Consumer News and Business Channel (CNBC) analysis of business climates in the 50 states, which ranks Rhode Island dead last. (See the link above.)
MacKay suggests that, since all five of the top-ranking states for 2013 happen to have Right to Work laws on the books barring the termination of employees for refusal to pay dues or fees to an unwanted union, CNBC must be biased against Organized Labor.
He fails to consider the possibility that the reason Right to Work states typically score far higher on the CNBC survey and a wide range of other business-climate assessments is that they actually do experience faster growth in jobs and employee compensation.
U.S. Commerce Department data show that, from 2002 to 2012, private-sector compensation (including wages, salaries, benefits and bonuses) grew by 8.4% nationwide, after adjusting for inflation. But the 22 states that had Right to Work laws on the books throughout the period experienced aggregate real compensation growth of 14.3%, or nearly six percentage points higher. The average for the 27 states that were forced-unionism for the entire decade was just 5.4%. (In early 2012, Indiana became the 23rd Right to Work state, and this spring the 24th Right to Work law took effect in Michigan.)
Eight of the top 11 states for 2002-2012 private-sector compensation growth are Right to Work states. Not one of the bottom 11 had a Right to Work law until 2012, when Indiana finally wised up.
With just 1.9% inflation-adjusted compensation growth in the private sector over the decade, Rhode Island ranked 43rd in the nation, and behind every single Right to Work state. Contrary to MacKay’s insinuation, it isn’t just energy-rich Right to Work states like Texas and North Dakota that have experienced far more compensation growth than Rhode Island!
In the second half of his commentary, MacKay acknowledges that Rhode Island’s economy isn’t so good, but insists that, instead of reining in Big Labor special privileges, Rhode Island should imitate two other forced-unionism states in New England, Massachusetts and Connecticut, by lavishing even more taxpayer subsidies on higher education.
Unfortunately for MacKay, U.S. Census Bureau data show the number of college-educated people in Connecticut and Massachusetts grew by just 22.9% and 24.1%, respectively, from 2000 to 2011. That’s far below the national average of 32.5%. Both Connecticut and Massachusetts had slower growth than in 21 of the 22 states that had Right to Work laws at the time. Even Rhode Island, with 24.9% growth, did slightly better than these two England States. The Right to Work average was 39.3%.
It seems that, if you want more college-educated employees, the best way to get them is to furnish good opportunities for them to use their talents and learning, not pour even more tax dollars into the already-bloated higher education system. This may come as a surprise to the Scott MacKays of this world, but most Americans would recognize that it’s only common sense.