State Right-to-Work Laws Show Real Payoffs for Wages and Economic Growth, Study Finds
WASHINGTON, July 16 – Today, the Competitive Enterprise Institute (CEI) released the second installment in CEI’s three-part series, The High Cost of Big Labor, that looks at how the 24 states with right-to-work laws, which give workers the right to not join unions or pay union dues as a condition of employment, compare to the other states. In “An Interstate Analysis of Right to Work Laws,” authors Richard Vedder and Jonathan Robe find states with right-to-work laws perform better on multiple economic measures, from income growth to economic growth, compared to states without such laws.
“The evidence is clear that right-to-work laws improve the wage and economic conditions of a state’s workforce,” said CEI senior fellow and labor policy expert Aloysius Hogan. “Income levels, for example, would now be higher by some $3,000 per person, or $13,000 for a family of four, if non-right-to-work states had adopted such laws several decades ago. The financial impact of that gap is obviously substantial. Lawmakers should pass right-to-work laws if they want to raise the standard of living for the workers and families in their respective states.”
States without right-to-laws allow labor unions to sign collective bargaining agreements that force workers to join a union or at least pay dues. The resulting higher union presence, the report explains, tends to increase the adversarial relationship between workers and employers and make a state less attractive for businesses to locate.
The top 10 states most negatively affected by the lack of a right-to-work law are: Alaska, Connecticut, California, New Jersey, Illinois, Hawaii, Maryland, Wisconsin, New York, and Michigan.
Other facts and figures include:
- Real total personal income grew by 165 percent in right-to-work states over a 31 year span, outpacing the national average of 123 percent growth.
- Between 2000-2009, approximately 4.9 million people migrated from non-right-to-work states to those states with right-to-work laws.
- The overall effect of a right-to-work law increases economic growth rates by 11.5 percentage points.