As the AFL-CIO hierarchy and its allies push for minimum-wage hikes in state after state, union spokesmen and their allies repeatedly invoke the high cost of living in forced-unionism states in the Northeast and in the Pacific western states as grounds for hiking the amount employers are legally required nationwide to pay employees with modest experience and skills.
For example, in late February Kenneth Quinnell, a regular contributor to the AFL-CIO Now blog, wrote a post regarding a National Low Income Housing Coalition (NLIHC) study showing how many hours “a minimum-wage worker would have to work in each state to afford a two-bedroom apartment at a fair market rent” while still having 70% of his or her income left over for non-rent expenses. (Quinnell’s entire post is available at the link below.)
The NLIHC data showed that, even though a disproportionately large share of forced-unionism states have adopted statewide laws mandating a nominal minimum wage that his higher than the current national minimum, minimum-wage workers are still worse off, on average, in forced-unionism states. Specifically, 10 of the 11 states where rental housing is least affordable for minimum-wage earners lack Right to Work laws. But 11 of the 16 states where rental housing is most affordable for minimum-wage earners are Right to Work states.
But the same union officials who understand full well that compulsory-unionism states like New York, New Jersey and California are far more expensive than the national average when they are pushing for minimum wage increases can forget entirely about regional disparities in cost of living when they are attacking Right to Work laws.
Many statistics regarding incomes in Right Work and forced-unionism states cited by Big Labor propagandists ignore regional cost-of-living differences completely. Others rely heavily on regional cost-of-living indices created by the union-label Political Economy Research Institute (PERI) that show forced-unionism strongholds like New York and New Jersey as having a cost of living far closer to the national average than do nonpartisan researchers who have no ax to grind. Moreover, the PERI does not publicly disclose just how it calculates interstate cost of living differences.
Unlike the PERI, the Missouri Economic Research and Information Center (MERIC) relies on the highly respected Council for Community and Economic Research (C2ER) for the raw data it uses to calculate the relative cost of living in each of the 50 states. C2ER’s metropolitan-area cost-of-living data have been cited by the U.S. Commerce Department’s Statistical Abstract and an array of other standard references. The PERI’s cost-of-living data are cited almost exclusively by partisans of compulsory unionism.
This week, the National Institute for Labor Relations Research adjusted 2013 disposable income in the 50 states as reported by the Commerce Department in March for cost of living by using MERIC’s annual cost-of-living indices for 2013.
The Institute found that the average cost of living-adjusted disposable income per capita in Right to Work states last year was$38,965, roughly $2200 higher than the forced-unionism state average. Nine of the 10 top-ranking states (Iowa, Kansas, Nebraska, North Dakota, Oklahoma, South Dakota, Texas, Virginian and Wyoming) have Right to Work laws on the books. The sole exception in the top 10 is forced-unionism Illinois, whose economic positives are offset by extraordinarily poor job creation and overall income growth. Moreover, nine of the 11 bottom-ranking states for cost of living-adjusted disposable income per capita lack Right to Work laws.
The strong correlation between Right to Work status and higher cost of living-adjusted disposable income does not in itself prove that Right to Work laws cause incomes to rise, but it strongly tends to disprove loud assertions by union propagandists that compulsory unionism is good for workers’ pocketbooks.