Right to Work Status Continues to Be Positively Correlated With Job and Compensation Growth

Right to Work States Faster Growth, Higher Purchasing Power

The latest update of an economic fact sheet that the National Institute for Labor Relations Research has regularly published for a decade shows that states with Right to Work laws continue to benefit from faster economic growth according to a wide array of measures.

This week, the National Institute for Labor Relations Research published the spring 2013 edition of an analysis comparing Right to Work and forced-unionism states according to 11 different economic and demographic criteria.

The data analyzed come primarily from official U.S. government sources.  In a couple of instances, the Institute also makes use of data compiled by nonpartisan private organizations.

There is absolutely no doubt about the fact that Right to Work status is correlated with faster growth in jobs and employee compensation, net in-migration of young adults in their career-building years, greater numbers of single-family housing starts, and a host of other desirable outcomes for a state.  It also appears that, when interstate differences in cost of living are taken into account, Right to Work status is correlated with higher disposable income per capita.

Correlation alone, of course, does not establish causality.  A recent paper by economists Eric Fruits and Randall Pozdena and several other studies over the years have credibly argued that there is a causal relationship between Right to Work laws and faster economic growth, but it is difficult to prove anything definitively in economics.

Does that mean that forced-unionism advocates should be free to ignore data showing, for example, that from 2002 to 2012 real private-sector employee compensation in Right to Work states grew nearly three times as fast, in percentage terms, as it did in forced-unionism states?  Big Labor zealots such as Gordon Lafer of the University of Oregon often claim as much.  But that’s simply wrong.

At a bare minimum, data like those cited in the new Institute fact sheet and its predecessors indicate it is extraordinarily unlikely that compulsory unionism does anything whatsoever to increase overall employee compensation growth.  That is only possible if there is some other massive and extrinsic advantage Right to Work states have over forced-unionism states in the aggregate.  No such advantage has ever been identified.

Laws promoting forced union dues undermine American constitutional principles.  They grant ample protection for the freedom of the individual employee who wants a union to join one, but far less protection for the individual freedom of his or her counterpart who doesn’t want to join a union.

The only potential justification for offering unequal protection under the law for pro-union and anti-union employees is that such a system reaps substantial economic benefits.

But the data collected by the Institute strongly indicate that, if anything, workers and the general public are economically harmed, rather than helped, by forced unionism.

Since compulsory unionism is contrary to the U.S. tradition of limited government, the burden of economic proof should logically be on this system’s proponents.  And the fact that a wide array of economic growth data show that forced-unionism states are performing worse than Right to Work states suggests Big Labor advocates face a steeply uphill battle to make such a case.