CEI Report Finds Unionization Costs Individuals More Than $10,000 in Some States

New CEI Report Finds Unionization Costs Individuals More Than $10,000 in Some States

Big Labor Holding Back Employee Wages and State Economic Growth

WASHINGTON, July 29 – Today, the Competitive Enterprise Institute (CEI) released the third installment in a three-part series, The High Cost of Big Labor, that finds a gaping disparity in economic achievement between states with significant union presence and those with right-to-work laws. In “The Unintended Consequences of Collective Bargaining,” authors Lowell Gallaway and Jonathan Robe rank the states according to the negative impact unionization has had on each state’s economy over the last 50 years.

“Collective bargaining has harmed state economic and wage growth, as this new CEI report demonstrates,” said Iain Murray, CEI Vice President for Strategy. “In fact, in states with high levels of unionization, this union presence has cost individuals more than $10,000 in income over the last 50 years. That is a 15 percent cumulative reduction in worker wages.”

Similarly, when looking at overall state economies over this period, the authors show a reduction in state economic growth as high as 10-12 percentage points in some states.

“Michigan lost about 23 percent in real per capita income over 50 years, compared to South Carolina on the other end with a 3.5 percent loss,” said Murray.

The top five "worst" states were: Michigan, Alaska, Nevada, New York, and Hawaii. The five states that fared best were: South Carolina, North Carolina, Mississippi, South Dakota, and Texas.

The first report in the three-part series, Understanding Public Pension Debt, ranked the states on their respective public pension shortfalls, while the second report, An Interstate Analysis of Right to Work Laws, ranked the states according to how right-to-work laws, or the lack there of, have affected state economies.

Note: The study analyzes 1964-2011. Idaho, Oklahoma, Michigan and Indiana enacted right-to-work laws in 1986, 2001, 2012 and 2012, respectively.