Right-to-work correlated with higher per capita income among the states

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In the wake of autoworker union giant Michigan passing right-to-work legislation, numerous reports have been released comparing incomes in right-to-work states with forced unionization states.

But until recently, a key ingredient in determining the efficacy of the right to work without being forced to pay union dues has been ignored – cost of living adjustments. A new report from the Mackinac Center for Public Policy finds that when comparing apples to apples by correcting for different costs of living among the states, per-capita incomes are actually higher in right-to-work states than in forced unionization states.

Correcting for cost of living becomes very important when one realizes a dollar in Kentucky will buy you significantly more than a dollar in New York or California. Thus, an individual making $30,000 per year in Kentucky is significantly better off than an identical individual making the same nominal income in New York. In short, $30,000 in Kentucky has significantly greater purchasing power than $30,000 in New York. Dollars are worth less in New York simply because there’s so many of them floating around in that densely populated financial capital of the country.

Thus, to truly ascertain how right-to-work legislation affects the quality of life for individuals in different states, we must correct for the different costs of living across the country. And once we do, it turns out right-to-work states have 4.1% higher per-capita incomes than those in forced unionization states.

In additions, since 2001, right-to-work states have added 1.7 million jobs while forced unionization states have lost 2.1 million jobs. Right-to-work states also boast unemployment rates a full percentage point lower than their unionized counter parts.

So why is Kentucky not giving its citizens the same right to work that our neighbors in Tennessee and Indiana have? The mystery continues.