“Right to Work” States Employment Rates Deserve Scrutiny, Receive Some Here

One issue that would have featured prominently on Sunday talk shows before the tragic events in Newtown unfolded is “right to work” legislation.

The discourse would have been courtesy of the union busting bill that Michigan Governor Rick Snyder signed into law last Tuesday.

But the issue – whether or not employees working for a unionized company should be able to opt out of mandatory fees (read: freeload off collective bargaining) – will almost certainly grab the national spotlight again in the near future. That the law passed in a state with a strong labor tradition can only embolden corporate lobbyists in closed shop states – especially when considering that wealthy donors, allegedly, were able to push the bill through the Michigan legislature in part by threatening to make primary season a living hell for hesitant Republicans.

It is, therefore, worth discussing that the stated rationale behind these laws contains about as much integrity as your run-of-the-mill three card monte stand. Which isn’t surprising when considering that the term “right to work” seems to be exactly what George Orwell had in mind when he defined “doublespeak” (“Americans for Prosperity” comes in a close second).

Even the most seemingly logical defense of open shop laws (if we don’t stop calling it “right to work” the PR consultants win) – that states who adopt them see unemployment drop – doesn’t appear to pass the smell test.

Take a look at BLS November unemployment rates by state. Half of the 22 states that had open shop laws before 2012 can be found in the bottom half of the employment rate table:

50th – Nevada (11.5%); 46th – North Carolina (9.3%); 43rd – Mississippi (8.9%); 40th – Georgia (8.7%); 39th – South Carolina (8.6%); 37th – Florida (8.5%), 36th – Kentucky (8.4%); 34th – Tennessee (8.2%), 31st (tie) – Arizona, Alabama (8.1%), and 26th – Arkansas (7.2%).

While this, alone, doesn’t suggest causality, it seems reasonable to hypothesize that it could. Liberal economist Lawrence Mishel found in 2001 that real wages in open shop states are 4% lower, rendering workers there with less money to spend, and the state with weaker aggregate demand.

“But what about all the open shop states in the top half of the employment rate table, Sam? The states with the seven highest employment rates have open shop laws!”

Relax. I was getting there. And its true. The states with the most enviable employment rates are open shop:

1st – North Dakota (3.1%); 2nd – Nebraska (3.8%); 3rd – South Dakota (4.5%); 4th – Iowa (4.5%); 5th (tie) Wyoming, Utah (5.2%); 7th – Oklahoma (5.3%), 10th – Kansas (5.7%)

But if recent history is any indication, these figures could have less to do with labor law and more to do with the fact that, just a few years ago, nine out of ten of these states were net beneficiaries of federal largesse – some to a staggering degree.

In 2007, North Dakota netted $4,856 per capita from DC. South Dakota netted $4,414 per capita. The average Iowan took $1,075 more than he or she spent in federal taxes. And the average man, woman and child in Wyoming, Utah, Oklahoma, and Kansas netted $1,205, $792, $376 and $154 from the federal tax regime.

This leads one (a.k.a. me) to hypothesize that, thanks to the Federal government, there is higher employment in these open shop states than there otherwise would be. These income transfers – assuming they’re of similar size today – mean that there’s more to spend, which likely means that there are more jobs.

And it wouldn’t be unreasonable to expect 2012 data on net federal spending by state to corroborate this, based on the aforementioned above average employment numbers and the fact that these states have low population densities.

This might not exactly be a peer reviewed stuff here. But it certainly should lead one (a.k.a. you) to cast aspersions on the alleged jobs boom created by open shop laws.

Samuel Knight

Samuel Knight is a freelance journalist living in DC and a former intern at the Washington Monthly.