Early last week, the Jefferson City-based Missouri Economic Research and Information Center (MERIC), a state government agency, published its latest set of state comparative cost-of-living indices. (See the link below.)
MERIC’s new indices estimate the average annual cost of living in 2016 for each state. The National Institute for Labor Relations Research has now used these data to calculate average annual costs of living for Right to Work and for forced-unionism states.
Twenty-six states had Right to Work laws protecting employees from federal labor law provisions authorizing forced union dues in 2016. The latest two states to pass Right to Work laws, Kentucky and Missouri, are counted as forced-unionism states in the Institute analysis, since their protections against compulsory union dues and fees weren’t yet on the books last year.
The 26 Right to Work states combined had a population-weighted cost of living 6.5% below the national average in 2016. The forced-unionism states combined had a population-weighted cost of living 17.4% above the national average. (MERIC itself does not weigh states based on population size in calculating its indices. For that reason, the national average for population-weighted states does not equal 100.) On average, forced-unionism states were 25.6% more expensive to live in than Right to Work states.
The correlation between forced-unionism status and a higher cost of living is robust. Not one of the 14 highest-cost states in 2016 has a Right to Work law. But all of the nine lowest-cost states, and 15 of the 17 lowest-cost states, were already Right to Work last year.
Correlation does not equal causality, but there is a case to be made that compulsory unionism actually fosters a higher cost of living. Union officials wielding forced-dues privileges funnel a large share of the conscripted money they reap into efforts to elect and reelect politicians who favor higher taxes on and heavier regulation of businesses, including the real estate and energy businesses. And many economists credibly argue that excessive government regulation is a major factor behind high housing, energy, and other costs in forced-unionism states like California, New York, New Jersey, Connecticut and Massachusetts.
But even if it could be established that forced unionism did not cause higher living costs, the strong correlation between forced unionism and higher costs would still be relevant in assessing the economic impact of Right to Work laws. What matters most to employees seeking better lives for themselves and their families and employers seeking good employees is not nominal wages and salaries. It is what those wages and salaries can buy in the location where they are earned.
That’s why, when U.S. Commerce Department data on annual wages and salaries and other types of income in the 50 states are published late next month, honest efforts to make comparisons between Right to Work and forced-unionism states will always be informed by MERIC’s or some other nonpartisan comparative cost-of-living index.