Right to Work States Far Outpace Forced-Dues States in Net Growth in Businesses With 20 or More Employees
While small businesses with fewer than 20 employees constitute a critical part of the U.S. economy, they are not the principal source of jobs today or of job creation for the future. Â More than three quarters of all private-sector employees across America work for enterprises with 20 or more people on their payrolls. Â For the foreseeable future, the bulk of business job opportunities will come from such enterprises.
Consequently, a state’s ability to attract and retain businesses with at least 20 employees is a strong indicator of how well that state is doing in providing opportunities for people hoping to advance in their careers and for job seekers.
And U.S. Labor Department tracking the number of business enterprises with diverse workforce sizes in the first quarter of each year (see the link below) Â clearly show that states with Right to Work laws on the books are far outpacing states that lack such laws in net gains for private business establishments with 20 or more employees.
Overall, from 2003 to 2013, the 22 states that banned forced union dues for the entire decade experienced a 12.0% increase in the number of businesses with 20 employees or more. Â Meanwhile, the 26 states where forced union dues are still permitted saw an aggregate gain of just 3.6%, less than a third as much as the increase for Right to Work states.
(Indiana and Michigan, which adopted Right to Work laws in 2012, are excluded. Â The above analysis includes data from two forced-unionism states, Alaska and Montana, and one Right to Work state, Wyoming, for which Labor Department data are incomplete. Â Excluding the data from these three states would change the Right to Work and forced-unionism averages reported above only slightly.)
The positive correlation between Right to Work status and net growth in private enterprises with 20+ employees  is very robust.  Of the 11 states with the greatest increases in such enterprises from 2003-2013, nine (Florida, Idaho, Nebraska, North Dakota, Oklahoma, South Dakota, Texas, Utah and Wyoming) are Right to Work states.  The sole exceptions are Alaska and Montana.
But of the 11 states with the smallest net gains (or actually net losses) in private business enterprises with 20 or more employees, 10 (California, Illinois, Kentucky, Maine, Missouri, New Hampshire, New Jersey, Ohio, Rhode Island and Vermont) are still forced-unionism today, and one (Michigan) adopted a Right to Work law only very recently.
The states ranking in the cellar for growth in all but the smallest enterprises over the past decade are located all over the country. Â Some are very high-tax and some are low-tax. Â Some have workforces with educational attainment well above average, while others have less educated workforces. Â What they have in common is the absence of a Right to Work law.
From 2003 to 2013, the number of private businesses employing at least 20 people grew by 12.0% in states with Right to Work laws, but by just 3.6% in states lacking such laws. Image: stock photo