States with Forced Unionization Have Higher Costs of Living

Stan Greer of the National Institute for Labor Relations Research wrote an interesting piece about forced unionism for CNS News.

At first glance, data from the U.S. Commerce Department showed that the average compensation for full- and part-time private-sector employees in California was approximately $59,000, thus indicating a high standard of living that would make other states envious.

However, Greer noted that “working-age Californians recognize they don’t live so well relative to their counterparts in other states.” For that reason, demographer Wendell Cox argued that “2.2 million more residents have moved out to other states than in” since 2000.

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A poll by the University of California says that more than half have “serious” or “some” intentions of leaving the state. Households between the ages of 30 and 49, when Americans generally start buying homes and start raising families, are the ones most eager to leave the Golden State. An average of nearly 60 percent of that age demographic wants to make an interstate move.

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What is often forgotten in these discussions is that employees’ standard of living, whether they’re unionized or union-free, depends on their cost of living and tax burden, along with nominal pay. As a result, many Right to Work states have higher standards of living than states with forced-unionism like California.

For years, Missouri Economic Research and Information Center (MERIC) has published cost of living indices that help employees determine what their living standards would look like when they move to a different state.

According to MERIC’s data for 2018, of the 14 states with the highest overall cost of living, not one has a Right to Work law which prevents the firing of employees for refusal to join or pay dues to an unwanted union. However, 13 of the 14 states with the lowest cost of living were and are still Right Work states.

In addition to housing, food, and utility costs, overall tax burdens are significantly lower in Right to Work states than in forced-unionism states. The Tax Foundation revealed in 2018 that people living in forced-unionism states coughed up over over 31.6 percent of their income in federal, state, and local taxes. This represented a 13 percent higher share than the average in Right to Work states.

A recent report from the National Institute for Labor Relations Research that analyzed U.S. Census Bureau data discovered that the average cost of living-adjusted, after-tax income per household in Right to Work states in 2018 was $60,806. This was $4,300 higher than the average in states without Right to Work.

These findings are not shocking when understanding the role that unions play in the political system. More often than not, they bankroll the campaigns of politicians who love big taxes, enlarge the size of public administration, and pass regulations that make it more expensive for people to make a living.

 

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