Right-to-work states have laws in place that give employees the right to decide for themselves whether or not to join a union. On the other hand, states that don't have similar laws and in which union monopolies exist require many workers to join labor unions and pay union dues. A controversy exists as to the effectiveness of labor unions and whether they benefit workers in states with pro-union atmospheres. To objectively evaluate the issue, you can look at earnings data and other factors that affect workers.
Individuals in right-to-work states generally earn higher wages than those in forced-unionized states, according to research by the National Institute for Labor Relations Research. In 2008, individuals working in states with 10 percent or more of private-sector workers subject to unionization laws earned cost-of-living-adjusted weekly wages of $770, on average. In right-to-work states, or states with low rates of private-sector unionization, individuals earned $818 weekly, on average, adjusted for the cost of living. This means that, for 2008, workers in right-to-work state earned nearly $2,500 more for the year than their forced-unionized worker counterparts.
Disposable income can be understood as the money you have leftover for saving or spending after deducting mandatory charges like federal and state taxes. In contrast, discretionary income consists of money you have leftover after paying personal expenses like bills, mortgage, rent and utilities. The National Institute for Labor Relations Research took the U.S. Commerce Department's data for 2008 that showed the average disposable income per capita in each state and adjusted it for the cost of living. The analysis found that right-to-work state workers in 2008 had disposable incomes of $34,878, adjusted for cost of living, while unionized-state workers ended up with about $2,000 less for the year.
Looking at employment totals is an important indicator of economic growth. In states with right-to-work laws, employment growth significantly outpaces both that of non-right-to-work states and nationally, according to a 2011 research report from the Indiana Chamber of Commerce Foundation. From the years 1977 through 2008, nationwide total employment grew 71 percent. During this same period, employment grew 100 percent in right-to-work states and only 57 percent in non-right-to-work states.
A greater proportion of the American population can be found in right-to-work states, according to analysis of U.S. Census bureau data in the 2011 report by the Indiana Chamber of Commerce Foundation. In 1970, about 29 percent of Americans lived in right-to-work states, compared to about 40 percent in 2008. Though birth rates and other factors may contribute, much of this shift is a result of the migration of workers to right-to-work states. In fact, nearly 5 million Americans moved from non-right-to-work states to right-to-work states during the 2000 to 2009 period.
- National Institute for Labor Relations Research; Union Monopoly Linked to Lower Purchasing Power; August 2009
- Investors.com; Jobs, Income Data Show Right-To-Work States Working; Sean Higgins; June 2011
- Indiana Chamber of Commerce Foundation; Right-to-Work and Indiana's Economic Future; Richard Vedder et al.; January 2011