Jobs and income growing much faster in Right-to-Work states

Government data show freedom from forced unionization means better outcomes for workers.

Illinois is increasingly surrounded by Right-to-Work states, and those states are outperforming Illinois in jobs growth and income growth, according to government data.

And the economic advantage of laws that protect worker choice extends beyond the Midwest. Right-to-Work states outperform forced-unionization states in job creation and income growth across the U.S.

A Right-to-Work law protects the paychecks and choices of individual workers. In a forced-unionization state like Illinois, a union can get a worker fired if that worker refuses to pay dues to the union. Not so in Right-to-Work states, where every worker has the choice to opt in or out of union membership along with the associated dues and fees. What’s happened in Indiana and Michigan since they enacted Right-to-Work laws? Both states have achieved better jobs growth and income growth than Illinois, according to data from the Bureau of Labor Statistics and the Bureau of Economic Analysis. Indiana enacted Right to Work in February 2012, and since then, Hoosier payrolls have grown by 5.7 percent, compared to 3.4 percent growth in Illinois. Since Michigan enacted Right to Work in March 2013, Michigan payrolls have grown by 4.5 percent, compared to 2.3 percent growth in Illinois during the same period.

Job creation in industrial sectors such as manufacturing especially improves under Right-to-Work laws. Since Indiana passed its Right-to-Work law, Hoosier manufacturing jobs increased by 44,500, while Illinois lost 8,300 manufacturing jobs in the same time period. And Michigan added 46,900 manufacturing jobs since it enacted Right to Work, while Illinois lost 10,900 factory jobs during that time.

Not only has job creation fared better in Illinois’ Right-to-Work neighbors, but personal income has grown faster in those states, too. In every year since enacting Right to Work, Indiana and Michigan have seen more growth in their residents’ personal income than has Illinois.

The data confirm that the regulatory advantage of worker freedom attracts businesses, which leads to stronger job creation, which leads to rising incomes.

According to a CNBC poll of its Global CFO Council , two-thirds of chief financial officers said a Right-to-Work law is either “important” or “very important” when they decide where to grow their businesses. Illinois residents are at a severe disadvantage in this regard. Over 1,100 businesses have black-listed Illinois because it is not a Right-to-Work state, said Jim Schultz, the director of the Illinois Department of Commerce and Economic Opportunity, according to Crain’s Chicago Business. That means Illinois families are missing out on thousands of work opportunities because Illinois politicians don’t want individual workers to have a choice as to whether to pay fees to a union.

The situation of Illinois with respect to its neighbors mirrors what is happening across the nation. Texas has led Right-to-Work states with its jobs boom, but, as illustrated by the successes of Indiana and Michigan, it’s not just a Texas story. Right-to-Work states across the country are creating jobs at twice the rate of forced-unionization states – and have been as far back as federal jobs data is available. Since 1990, the job count in Right-to-Work states is up 47 percent, compared to 21 percent in forced-unionization states.

Viewed on an annual basis, Right-to-Work states have an average jobs-growth rate of more than 1.5 percent per year, compared with 0.75 percent annual growth in forced-unionization states.

Put in Illinois terms, that’s the difference between creating 90,000 jobs per year versus only 45,000 jobs per year. Tens of thousands of Illinois families are missing out on work opportunities due to the state’s lack of a Right-to-Work law.

Springfield lawmakers must abandon their tired rhetoric about Right to Work and consider the facts: Opportunities are growing much faster in Right-to-Work states than in forced-unionization states, and Illinois’ Right-to-Work neighbors are leaving the Land of Lincoln in the dust in the race for new businesses and facilities. And if state lawmakers won’t take up worker freedom, Illinois’ local governments should take it on themselves to enact Right-to-Work ordinances.