From 2002-2012, Real Private-Sector Compensation Growth in Right to Work States Was Nearly Thrice as Great as in Forced-Unionism States


New Census Data Show People Go Where the Money Is

According to newly released and revised data from the U.S. Commerce Department's Bureau of Economic Analysis, eight of the top 11 states for private-sector compensation growth from 2002 to 2012 had Right to Work laws on the books throughout the period. Meanwhile, none of the 11 states with the least compensation growth had a Right to Work law before 2012.  Image: KMJ 580 Radio (Fresno, Calif.)

In a Sunday column for the Washington Examiner analyzing which regions of the U.S. are growing the fastest (see the link above), Michael Barone acknowledges that, of course, “it’s still possible to live a comfortable and productive life in a city that’s not growing.”  Nevertheless,

a great nation needs growth to give people opportunity to move upward and to allow the downwardly mobile to live as comfortably as they did growing up.

New and revised data released by the U.S. Bureau of Economic Analysis on Wednesday show that, over both the short term and the long term, economic growth in our country is heavily concentrated in states (now 24 in number) with  Right to Work laws barring the termination of employees for refusal to pay dues or fees to an unwanted union.   Private-sector employee compensation growth (including wages, salaries, benefits and bonuses) is illustrative.

From 2011 to 2012, private-sector compensation, adjusted for inflation with the U.S. Bureau of Labor Statistics CPI-U, grew by 2.4% in Right to Work states as a group, nearly a full percentage point more than the 1.5% average for forced-unionism states.  (Indiana, which adopted its Right to Work law in early 2012, is counted as a Right to Work state here.  Michigan, whose Right to Work law didn’t take effect until today, is counted as a forced-unionism state.)

From 2002 to 2012, Right to Work states (excluding Indiana) experienced overall real compensation growth of 14.3%, nearly triple the 5.4% average for forced-unionism states.  Eight of the top 11 states for private-sector compensation growth over the decade are Right to Work states.  But not one of the 11 states with the least compensation growth had a Right to Work law prior to 2012.

State-by-state compensation growth in any given year may largely reflect where the various regions of the country are in their business cycles.  But the fact that Right to Work states consistently lead forced-unionism states by a wide margin in compensation growth over 10-year periods can’t be easily dismissed.  And this is just one of many important pieces of evidence indicating Right to Work states are “where the money is.”