Americans for Prosperity has a very good article that describes how States that force unionization do poorer than right-to-work States. Statistics are included.
Right to Work and Productivity: The Numbers
Thursday, February 19th 2009
Americans for Prosperity believes in defending workers’ right to a secret ballot. However, union organizers and liberals want to take this right away. This would make it easier for union bosses to pressure workers into joining unions. Their contention is that unions make states and workers more prosperous.
Are they right? Let’s take a look at the issue and some data.
An article by Robert Reich, President Clinton’s Secretary of Labor, discusses two key points through which to view liberals intentions on this issue.
1) The only way to get the economy back on track is to boost the purchasing power of the middle class by expanding unions so workers get higher wages.
2) Create a Utopian view of life in 1955 (1/3 of workers belonged to unions and wages were high) and says now because less that 8 percent of the private sector is union, wages are low & impossible to form unions.
Conservative Perspective on Forced Unionization:
* It is a myth that government can make people rich by propping up wages. If you force wages to be artificially high you are going to force companies out of business.
* You will also make other people unemployed.
* You price people out of the labor market.
* These are the policies that extended the Great Depression.
* People today understand that unions aren’t beneficial.
* It would be great to see unions work with companies to make them better and more profitable—they offer no value and shouldn’t be able to force people to join.
* They should find a way to appeal to workers where they would actually want to join.
* Powerful union makes it hard to fire employees and discourage businesses from investing.
* Union companies have to invest in more equipment to get more out of each worker since wages are so high.
* Productivity growth has actually been slightly HIGHER in the right-to-work states on average than the union shop states, showing that the workplace restrictions imposed by unions may be counterproductive.
Right-to-work States Outperform,1997-2007
Productivity Growth Job Growth Economic Growth Right-to-work 18.6% 17.6% 41.6% Union shop 17.3% 8.9% 33.5%
Private Sector, Real chained 200 dollars.
Sources: GDP by state from U.S. Bureau of Economic Analysis and state employment from U.S. Bureau of Labor Statistics
The following chart compares economic growth in the ten states with the greatest percentage of the private sector workforce in unions to the ten states with the lowest percentage
The ten most heavily unionized states saw 29.2% job growth and a 45.3% increase in GDP. The ten states with the lowest union concentration had substantially better economic performance: a 36% increase in private sector jobs and a 69.9% increase in GDP.
States that have allowed this freedom experienced tremendous growth as business move their operations to states that promote a friendly business environment.
Right to work states have had more than double the population growth of union shop states since 1990. The right to work states saw, on average, a 65.5% increase in GDP over the 16 year period while states with union shops laws only experienced an average of a 45% increase. The wages of workers in right to work states rose an average of 23% in right to work states while in union shop states average wages only rose 15%.
III. Research that EFCA is bad for business
Top line summary of the research: Studies have found that:
1) Real GDP was depressed by about $3.5 trillion dollars from 1947 to 2000 due to unions. If you added the decrease in real wages paid to employees, the total impact rises to more than $50 trillion.
2) From 2001 to 2006, the economies of states where unionizing is more difficult outperformed more than union-friendly states in total economic growth, job growth, gross state product, and per-capita disposable income.
* One study found that union-produced “deadweight” loss to the US economy of 0.91% of GDP in 1980 and 0.34% of GDP in 2000 (noting that the effect on GDP declined as union membership declined).
* The study also found a shortfall in real GDP of about $3.5 trillion dollars from 1947 to 2000 due to unions. If you added the decrease in real wages paid to employees as a result of unions to the impact on the country’s GDP, the total impact of unions for the period 1947 to 2000 exceeded $50 trillion.[source: Richard K. Vedder, Ph.D. & Lowell E. Gallaway, Ph.D., “Do Unions Help the Economy? The Economic Effects of Labor Unions Revisited,” National Legal and Policy Center and The John M. Olin Institute for Employment Practice and Policy (2002), ]
* The Michigan-based Mackinac Center for Public Policy – using data from the U.S. Bureau of Economic Analysis – compared union-heavy Michigan to less unionized states with right-to-work laws. The report found that:
– Michigans average annual growth in real gross state product (the market value of all goods and services produced in a state) was only 1.8 percent from 1977 to 1999. Right-to-work states, with much lower levels of unionization, saw their real gross state product growth rate almost double Michigans rate at 3.4 percent.
– Michigans average annual employment growth was only 1.5 percent from 1970 to 2000, whereas right-to-work states grew by 2.9 percent.
– Michigans manufacturing growth actually declined during this time period by 0.3 percent whereas right-to-work states saw an increase in manufacturing job growth by 1.5 percent.
– The overall poverty rate for right-to-work states dropped by 6.7 percent from 1969 to 2000, while Michigans poverty rate increased by 0.6 percent.
Low State Unemployment Rates / Dec 2008: Preliminary Figures
U.S. National Average¦ 7.2
State Rate Right To Work (see list below)
Wyoming …….. 3.4 Right To Work
North Dakota …. 3.5 Right To Work
South Dakota 3.9 Right To Work
Nebraska …… 4.0 Right To Work
Utah ……………..4.3 Right To Work
Iowa ……………..4.6 Right To Work
New Hampshire 4.6
New Mexico 4.9
Oklahoma ……… 4.9 Right To Work
West Virginia ……4.9
Kansas ………….. 5.2 Right To Work
Montana ………… 5.4
Virginia ……………5.4 Right To Work
Louisiana ………… 5.9 Right To Work
Texas …………….. 6.0 Right To Work
Arkansas 6.2 Right To Work
Idaho 6.4 Right To Work
Alabama 6.7 Right To Work
Arizona 6.9 Right To Work
New York 7.0
New Jersey 7.1
(source: Regional and State Employment and Unemployment Summary, Bureau of Labor Statistics, 01/27/09; Local Area Unemployment Statistics, Bureau of Labor Statistics;
Right to work states
* According to the National Right to Work Legal Defense Foundation, there are 22 “right to work” states:
Of the 22 “right to work” states, 15 had unemployment rates below the national average in December 2008; 7 had unemployment rates higher than the December national average
4. Florida 8.1 (December Unemployment Rate)
5. Georgia 8.1 (December Unemployment Rate)
10. Mississippi 8.0 (December Unemployment Rate
12. Nevada 9.1 (December Unemployment Rate)
13. North Carolina 8.7 (December Unemployment Rate)
14. North Dakota
16. South Carolina 9.5 (December Unemployment Rate)
17. South Dakota
18. Tennessee 7.9 (December Unemployment Rate)
[source: National Right to Work Legal Defense Foundation, “Employees in Right to Work States,” http://www.nrtw.org/d/rtwempl.htm – The National Right to Work Legal Defense Foundation, established in 1968, is a “nonprofit, charitable organization providing free legal aid to employees whose human or civil rights have been violated by abuses of compulsory unionism.”]