Choose RTW States for Less Poverty and More Economic Opportunity

Posted by Olivia Grady on Friday, May 4th, 2018 at 11:17 am - Permalink

Unions have advocated for years that wages are 3% higher in forced-unionism states than in Right-to-Work states. However, on September 1, 2015, James Sherk, formerly of the Heritage Foundation, released a report, which found that Right to Work doesn’t lower private-sector pay when differences in cost-of-living are accounted for.

New analysis from the National Right to Work Committee further shows that poverty is lower and there is greater economic opportunity in Right-to-Work states than in forced-unionism states.

For example, the Administration for Children and Families, a division of the U.S. Department of Health and Human Services, published a report last fall on participation in the Temporary Assistance for Needy Families (TANF) program. The report illustrated that there are fewer families using TANF in Right-to-Work states than in forced-unionism states. In forced-unionism states, 11.6 residents out of one thousand used the program, while only 3.9 residents in Right-to-Work states were participants. States with the most participants were California, Kentucky, New Mexico, Alaska, Delaware, New York, Hawaii, Pennsylvania, Rhode Island and Montana. (Important to note, Kentucky was still a forced-unionism state at the end of 2016.)

In addition, poverty, according to the federal government’s supplemental poverty measure, is lower in Right-to-Work states because cost-of-living differences are taken into account.

Further, according to the latest data (2002), there were 2.8% more residents in forced-unionism states who were dependent on Medicaid and the Children’s Health Insurance Program (CHIP) than in Right-to-Work states.

Right-to-Work laws also attract economic opportunity.

On January 7, 2017, Kentucky Governor Matt Bevin signed Right-to-Work into law. The result has been tremendous economic growth.

The Kentucky Cabinet for Economic Development reported on December 30, 2017, that Kentucky had brought in $9.2 billion in corporate expansion and new-location projects in 2017. As a result, more than 17,200 jobs had been created. Good jobs have been created in the automobile industry, high technology industry, advanced manufacturing, distribution and logistics, and primary metals. An example was EnerBlu, a California company that decided to move from California, a forced-unionism state, to a Right-to-Work state, Kentucky.

In addition, net manufacturing employment was three times higher in Right-to-Work states in the past five years than in forced-unionism states. In 2016, the average annual compensation per Right-to-Work state manufacturing employee was $77,691 compared to about $73,000 for non-Right-to-Work states.  

Finally, Right to Work leads to higher living standards by lowering the cost of living. Indiana, for example, was 20.2% less expensive to live in than forced-unionism states before passing Right to Work. After Right to Work was passed, it became even less expensive (24.9%). Indiana’s per capita disposable income also increased. It was about $1360 higher than the average of Big Labor states before Right to Work compared to $3800 higher afterwards.  

States and local governments should continue to pass Right to Work to increase the number of jobs available and lower poverty.