Workers in Right to Work States Have Higher Disposable Income Than Those in Non-Right to Work States
It is well known that Right to Work laws, at the heart, are about individual freedom and the rights of workers to decide whether a union merits their financial support.
After all, Right to Work laws make it unlawful for employees to be fired for refusing to pay union dues.
But beyond individual freedom, study after study shows state Right to Work laws are a boon to state economies where they’ve been enacted, and all the evidence shows Montana would be no exception.
In fact, Bureau of Economic Analysis numbers show over the past decade, the number of people employed jumped 21.1% in Western Right to Work states, while Montana saw less than half that growth with 10.1%.
Right to Work Neighbors Outpace Montana
When adjusted for taxes and cost of living, households in Montana’s neighboring states, all of which have Right to Work laws, have nearly $7,000 higher annual disposable income than households in Montana.
And in 2019, real compensation per private sector employee was $35,846 in Montana while the average in the neighboring Right to Work states of Idaho, North Dakota, South Dakota and Wyoming stood at $45,975.
This is neither surprising nor unique because all across the country Right to Work states have a similar advantage.
In fact, George Mason University’s Nobel Prize-winning economics department found that families in Right to Work states average $2,800 more in purchasing power than families in non-Right to Work states.
And a more recent study conducted by Dr. Barry Poulson — a past president of the North American Economics and Finance Association and economics professor at the University of Colorado — showed even more striking results.
Dr. Poulson found that families in Right to Work metro areas have nearly $4,300 more in purchasing power than families in non-Right to Work metro areas, and real private sector compensation in Western Right to Work states over the past decade has consistently been over $10,000 greater than that of Montana.
PHH Fantus, the nation’s longtime leading business relocation firm, reports that at least half of all businesses, when seeking to expand or relocate, automatically eliminate non-Right to Work states — states like Montana.
Right to Work States Lead in Job Creation
And following the COVID-19 pandemic, states are looking for every possible advantage in attracting good, high-paying jobs Montana is missing out on.
The late Rutgers University professor Leo Troy, widely recognized as one of the preeminent labor economists in America, observed in a 2006 study that “right-to-work laws are strongly correlated with faster growth in jobs and personal income.”
In a journal article published in early 2010, Ohio University economist Richard Vedder, the author of more than 100 academic papers as well as several books and a specialist in labor, taxation and education issues, reported that there is a “very strong and highly statistically significant . . . positive relationship between” Right to Work laws “and economic growth.”
Right to Work Brings Indiana Jobs and Business
Looking at the most recent states to pass Right to Work laws, ending forced unionism in Montana would mean an instant boost to the Big Sky State’s economy.
In just the first eight months after the Indiana Right to Work Bill was signed into law, the Hoosier State gained over 100,000 new jobs according to the Bureau of Labor Statistics.
And, according to Dan Hasler, the head of the Indiana Economic Development Corporation, it took mere months before dozens of businesses started moving to Indiana.
Prior to passing Right to Work, Indiana was one of only six states where worker compensation declined from 2001-2011, according to the U.S. Department of Commerce.
However, in the first two years as a Right to Work state, Indiana became a leader in worker compensation gains. In fact, from 2003-2013, worker compensation grew almost twice as fast as it did in forced-unionism states.
According to the Bureau of Labor Statistics, from 2009-2019, civilian noninstitutional employment grew by 14.3% in the Hoosier State, compared to merely 10.3% in Montana over that same time period.
Michigan Economy Improved in the Years After Passage of Right to Work
Ten months after Indiana ended forced unionism within its borders, Michigan passed its own state Right to Work law.
With the law going into effect in March 2013, it was immediately clear that Right to Work had a positive impact on Michigan’s economy.
In fact, in Michigan’s first 19 months with Right to Work, the state had a 3.3% gain in manufacturing employment, far outpacing forced-unionism states, which clocked in at a dismal 0.6%.
According to the Bureau of Labor Statistics, over the past decade private sector job growth in Michigan was 17.7%, compared to 15.1% in Montana during that same time period.
Wisconsin Also Saw Rapid Job Growth Following Passage of Right to Work
And, over its first 12 months as a Right to Work state, from February 2015 to February 2016 Wisconsin gained 49,100 private-sector jobs — a level of job growth the state hadn’t seen in over a decade.
Then, when Right to Work went into effect immediately in January 2017, Kentucky saw $9.2 billion in new business investments that year, nearly doubling its previous record, and bringing over 100,000 new jobs to the Bluegrass State.
Right to Work Will Bring the Montana Economy Back
These of course are businesses and jobs the Big Sky State would love to host.
“Tragically,” said Montana Citizens for Right to Work Executive Director Randy Pope, “all those companies moving to Right to Work states aren’t even considering Montana.”
“Now as the numbers show, Right to Work could boost Montana as well.
“It’s time for an injection of the Right to Work principle to get the Big Sky State economy back in top gear,” said Pope.
To read more on why Montana should pass the Right to Work law, go here.