Right to Work Laws’ Economic Benefits Easier to Discern Than Michigan Pundit Supposes

Interest high in Right to Work; gains unclear

Intercensal Estimates of the Resident Population

Median Age and Age by Sex – U.S. Census Bureau

Veteran Michigan business pundit Rick Haglund admits that substantial evidence indicates that passage of a Michigan Right to Work law will promote employment growth in a state that ranked the worst in the nation for net private-sector job losses from 2001 to 2011.  But Mr. Haglund worries that the new jobs created won’t pay enough.  (See the first link above.)

He shouldn’t worry so much.  Once adjusted for interstate differences in cost of living with the help of indices calculated and published by the Missouri Economic Research and Information Center (MERIC), the average wage and salary compensation per private-sector employee in 2011 in the 22 states that then had Right to Work laws on the books was $35,000, or roughly $300 more than the average in forced-unionism states.  (Indiana became the 23rd Right to Work state early this year.)

U.S. Census Bureau data furnish a concrete and compelling confirmation that Right to Work states have  superior records of creating and retaining jobs that pay well enough to support a family.

From April 1, 2000 to July 1, 2011, Right Work states’ total population of children aged 17 and under increased by 10.5%, even as the 17-and-under population of forced-unionism states fell by 2.9%.  (See the second two links above for more information.  Since Indiana did not become a Right to Work state until 2012, it is counted as a forced-unionism state here.)

Eleven of the 12 states with the greatest percentage growth in their minor population are Right to Work states:  Arizona, Florida, Georgia, Idaho, Nevada, North Carolina, South Carolina, Tennessee, Texas, Utah and Virginia.  The only forced-unionism state in the top 12 is low-union-density Colorado, which ranked #8.  And if Hurricane Katrina-ravaged Louisiana is excluded 13 of the 14 states with the greatest percentage declines in their minor populations are forced-unionism states:  Connecticut, Illinois, Maine, Massachusetts, Michigan, Montana, New Hampshire, New York, Ohio, Pennsylvania, Rhode Island, Vermont, and West Virginia.  The only Right to Work state other than Louisiana to fall in the bottom 15 was North Dakota.  And even North Dakota is now headed in a positive direction:  From April 1, 2010 to July 1, 2011, its minor population actually rebounded by o.9%.

The reason for the disparity in 17-and-under population growth in Right to Work and forced-unionism states isn’t immigration from abroad, which affects both types of state roughly equally.  In fact, forced-unionism California’s percentage increase in minor population from 2000 to 2011 was less than one-fortieth as large as the average Right to Work state’s, even though the Golden State took in far more immigrants than any of the other 49 during that period.

The real reason for the disparity is that parents and prospective parents are moving in droves to Right to Work states.  They find these states, with their generally higher real incomes and lower living costs, to be more attractive places in which to live and, particularly, to raise children.

The fact that Right to Work status is strongly correlated with superior minor population growth does not in itself prove that  Right to Work laws are the cause.  But the correlation certainly is consistent with the predictions of Right to Work proponents that Michigan can attract more productive, well-compensated jobs by passing such a law.  As eminent statistician and Yale University Professor Emeritus Edward Tufte has said, “Correlation is not causation but it sure is a hint.”