The Benefits of Right-to-Work Laws
February 3, 2015
Illinois is not a right-to-work state, meaning that employees who go to work for employers with union contracts are forced to join unions and pay dues or pay agency fees. Because these dues and fees are required, unions are largely unaccountable to workers. Moreover, strong union activity in Illinois has discouraged businesses from locating in the state, which only hurts job opportunities and prospects for Illinois residents.
In a new report, Paul Kersey, the director of labor policy at the Illinois Policy Institute, highlights the many economic problems facing Illinois, including declining employment, stagnant wages and declining tax revenue due to residents leaving the state in droves.
How to combat this problem? Kersey says passing right-to-work legislation, which allows employees to choose not to join unions, would improve the Illinois economy and benefit workers. States with right-to-work laws still have unions -- the difference is, those unions are more accountable to their members, who can withdraw their support. Moreover, Kersey says right-to-work states are much stronger economically than their non-right-to-work counterparts:
- From 2002 to 2012, states with right-to-work laws saw a 7.2 percent increase in payroll employment, compared to a 2 percent increase in other states.
- As of September 2014, right-to-work states had an average unemployment rate of 5.5 percent, compared to 6 percent in non-right-to-work states.
- From 2000 to 2010, right-to-work states saw population growth that was twice as fast as that in other states (13.6 percent compared to 7.3 percent).
- Median wages in right-to-work states appear $4,345 lower than in other states. However, once you take into account cost of living and local taxes, right-to-work state wages rise. In fact, the cost of living is 16.6 percent higher in states without right-to-work laws.
- Right-to-work economies grew by 62 percent from 2002 to 2012, compared to just 46.5 percent growth in other states.
Why do right-to-work laws produce such growth? Kersey explains: these laws attract new employers and encourage investment, which leads to greater demand for labor and higher wages. And more business development means more competition, which further stimulates growth and produces gains for employees.
Source: Paul Kersey, "An economic profile of Right-to-Work states," Illinois Policy Institute, January 2015.
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