College Graduates Are Flocking to Right to Work States

By Stan Greer | June 12, 2017 | 11:11am EDT
(Wikimedia Commons Photo)

Federal data on the American workforce and employment and unemployment rates show that, even as our country’s economy experienced during the Obama presidency its most anemic recovery since the Great Depression, employer demand for college-educated employees continued to rise at a surprisingly rapid clip. 

From 2009 to 2015, the total population of the U.S., aged 25-64, grew by 3.9 percent, but the number of people in that age bracket with at least a bachelor’s degree grew by 11.1 percent.  During those same years, the mean annual earnings advantage for a worker with a bachelor’s degree over a worker with a high school diploma only rose from $26,038 to $29,867.

And as of this May, according to the U.S. Bureau of Labor Statistics, the labor force participation rate for civilians aged 25 or older (including people 65 and over) with one or more higher-education degrees was 74.0 percent (not seasonally adjusted), or 11.2 percentage points higher than the overall labor force participation rate.

Last month, the nationwide unemployment rate for the pool of 55.1 million college-educated adults 25 and over was just 2.1 percent, or roughly half the average for the workforce as a whole.

The bottom-line significance of these data is that employers across the country typically have more difficulty finding a qualified college-educated person to fill a position than a college-educated person has finding a good job.

Of course, not everyone who holds a bachelor’s degree and is in the work force is doing well economically.  But generally speaking there is still a “seller’s market” for college-educated labor in America today.

Furthermore, many businesses that sustain large numbers of jobs for people with associate’s degrees, high school diplomas, or less education also require a substantial number of college-educated people to operate efficiently.

Therefore, the rate at which a state is gaining college-educated people, relative to the national average, is in itself a good indication of how successful the state is in creating and retaining good jobs.

The seven states with the highest percentage growth in their college-educated populations, aged 25-64, from 2009, when the last recession ended, through 2015, the most recent year for which such data are available, are North Dakota, Wyoming, Texas, Utah, North Carolina, South Carolina and Virginia. These states are located in the Southeastern, Southwestern, Plains and Rocky Mountains regions of America. And they are culturally as well as regionally diverse.

What these states have in common is that they all have on the books Right to Work laws that make it illegal to force employees to join or pay dues or fees to an unwanted union as a condition of employment.

On the other hand, states without Right to Work protections for employees dominate the ranks of laggards in increasing their college-educated populations. All of the five bottom-ranking states – New Hampshire, New Mexico, New York, Rhode Island, and Vermont – and 11 of 12 states with the smallest percentage gains in college-educated population are forced-dues states. (Indiana, Michigan and Wisconsin, whose Right to Work laws took effect in 2012, 2013 and 2015, respectively, are excluded from this analysis.)

The 22 states that had Right to Work laws in effect the entire time from 2009 through 2015 experienced an aggregate gain of 13.9 percent in college-educated population, aged 25-64.  That increase is roughly half again as great as the overall percentage gain for the 25 states that still didn’t have Right to Work laws as of 2015.

The simple fact is, highly educated employees, like other employees, benefit from Right to Work laws.  Employees of all kinds prefer to live in Right to Work states when they can because living costs are lower and real incomes are higher.

For example, a recent analysis by City of University of New York (CUNY) professor Mitchell Langbert found that, after controlling for other kinds of deregulation, workforce education, and other factors, cost of living-adjusted annual wages per employee are on average nearly $4,300 higher in Right to Work states than in forced-unionism states.

Langbert’s analysis reinforces what the Census data already show: Forced-unionism states seeking a “brain gain” should pass Right to Work laws.  Policymakers in the 22 states that still lack Right to Work protections for employees should pay heed.

Stan Greer is a Senior Research Associate for the National Institute for Labor Relations Research.


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