The Standard of Living in Right to Work States

by

Barry W. Poulson, Ph.D.
Professor of Economics
University of Colorado, Boulder

Twenty-two states now have Right to Work laws. In these states employees do not have
to financially support a union with monopoly bargaining privileges at their work place in
order to keep their jobs. In states that do not have Right to Work laws, an employee of a
unionized firm must financially support the union in order to get or keep his or her job.
Individual employees in these states are coerced into paying union dues, regardless of
whether they desire union representation. Union officials often defend this coercion on
the grounds that employees are better off in states without Right to Work laws. They
point to evidence that money incomes are higher in the 28 forced-unionism states.

But to answer the question of whether employees are better off in forced-unionism states,
we must look beyond money income. Just as money income varies across regions, so do
other factors that influence individual well being. Other tangible factors vary across
regions, such as cost of living and the burden of taxation. To ascertain whether
employees are really better off in forced-unionism states, we must compare money
income after adjusting for cost of living and taxes. It is this adjusted income measure that
captures the real purchasing power of employees’ disposable income in the different
states. Intangible factors that influence individual well being, such as freedom from
coercion, also vary across regions. In the present study, we approach this issue utilizing a
new data base and a different methodology than that utilized in previous studies.

Poulson SOL Study.pdf 180.7 KB