Commentary

Guess Where Factory Job Growth Is Happening Most? Hint: Not in Forced-Unionism States

Stan Greer
By Stan Greer | April 11, 2018 | 12:20 PM EDT

Map of Right to Work states (Screenshot)

Regardless of whether or not you think Donald Trump deserves the credit for it, there is no denying the fact that factory-sector employment growth has sharply accelerated since he moved into the White House. 

According to the U.S. Labor Department, the number of manufacturing jobs nationwide grew by just 0.1%, or 18,000, in 2016, the last year of the Obama presidency.  But since the beginning of 2017, manufacturing employment growth has averaged more than 18,700 a month, according to National Association of Manufacturers economist Chad Moutray.  In March, even as overall payroll job growth slowed, manufacturers added another 22,000 workers.

The surprising resilience of manufacturing employment is good news for American workers. 

On average, according to the U.S. Commerce Department, annual compensation (including the cash value of health insurance, pension fund contributions, and other noncash benefits as well as wages and salaries) per American manufacturing employee is $77,268, or roughly 60 percent higher than per employee compensation across the entire nonagricultural private sector.

But factory job growth is not spread out evenly across the country.  More and more, it is concentrated in states where laws prohibiting the forced payment of dues or fees to a labor union as a condition of employment have been adopted and taken effect.

As of today, 28 states have passed and 27 are enforcing Right to Work laws that protect employees from being forced to bankroll a union, or be fired.  (Missouri passed a Right to Work law last year, but union officials have blocked the statute from taking effect for now.)

Last year, 93 percent of the entire net U.S. increase for manufacturing employment occurred in the 27 states with active Right to Work laws.  Less than 4 percent occurred in the 22 states that have never passed Right to Work legislation.

Not a single forced-unionism state enjoyed a net gain of as many as 3,000 factory jobs last year.  Meanwhile, 11 Right to Work states (Arizona, Florida, Georgia, Indiana, Michigan, Nevada, South Carolina, Tennessee, Texas, Utah and Wisconsin) gained 3,200 or more.

And while the Right to Work manufacturing advantage has widened recently, it has been substantial for many years.  From 2012 to 2017, for example, manufacturing employment expanded by 5.5 percent in the 23 states that had Right to Work laws on the books for the entire five years.  That’s more than triple the 1.7 percent gain for the 22 states that were still forced-unionism in 2017. 

In 2017, more than 53 percent of America’s 12.4 million manufacturing jobs were located in Right to Work states.  On average, these jobs paid better than their counterparts in forced-unionism states, when regional differences in the cost of living are taken into account.

Commerce data, adjusted for cost-of-living differences according to an index calculated by the Missouri Economic Research and Information Center, a state government agency, show that in 2016 the average annual compensation per Right to Work state manufacturing employee was more than $4,100 higher than the average for states that still lacked Right to Work protections at that time.

In the global marketplace that has emerged over the past three decades, less and less assembly-line production of low-cost goods is going to occur in the U.S. and other wealthy countries.

That doesn’t mean that in the future American manufacturing won’t be able to sustain and create jobs that enable millions and millions of workers to provide well for themselves and their families.  But these jobs require employees who are willing and able to develop their skills and show individual initiative.

Right to Work laws foster an ideal environment for modern manufacturing by empowering employees who disagree with Big Labor obstructionism and “hate the boss” class warfare to resist by quitting the union and withholding all financial support for it.

That is a key reason why Right to Work states now represent the future for high-paying manufacturing jobs and businesses in the U.S.

Stan Greer is senior research associate at the National Institute for Labor Relations Research. NILRR’s website is www.nilrr.org. He is also editor of the National Right to Work Committee’s newsletter.

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