Commentary

Manufacturing Moves to Right to Work States

Stan Greer
By Stan Greer | March 15, 2017 | 3:46 PM EDT

Governor Scott Walker signs Right to Work legislation in Wisconsin. (AP Photo)

For many years, it was a pillar of conventional labor-policy wisdom that manufacturing jobs in the U.S. were overwhelmingly located in states that did not protect employees from being forced to pay union dues or fees as a job condition.

Back in 1957, an editorial research report published by Congressional Quarterly claimed, somewhat dismissively:  “It is worthy of note that the movement to ban compulsory unionism has spread most readily in areas where the economy has rested largely on agriculture and small business.”

And as recently as 2011, Indiana state Sen. David Long (Fort Wayne), then majority leader of his chamber, now president pro tempore, reportedly sought to justify his reluctance to fight for passage of  a statute prohibiting forced dues on the grounds that “[n]o industrial state has a right-to-work law.” (Indiana went on to become America’s 23rd Right Work state in early 2012.)

Such comments have always been misleading at best. Ever since the first state Right to Work laws were enacted back in the 1940’s, the share of total U.S. manufacturing employment located in such states has been consistently rising.

For example, in 1975, when 19 states already had Right to Work laws, 26.4 percent of all nationwide employment in manufacturing establishments was located in those 19 states, according to the U.S. Labor Department.

All of these states have continuously offered Right to Work protections for employees ever since. And their share of U.S. employment in manufacturing establishments rose to 29.9 percent in 1985, 33.4 percent in 1995, and 34.4 percent in 2005.

Between 2012 and 2016, another four states – Indiana, Michigan, Wisconsin, and West Virginia – the first three of which have large manufacturing sectors, switched over from forced-unionism to Right to Work.

It is largely thanks to the 1.63 million manufacturing payroll jobs located in Indiana, Michigan, Wisconsin, and West Virginia last year that the total for all Right to Work states exceeded the total for all forced-unionism states by more than 200,000 in 2016.

However, it is also notable that total manufacturing payroll employment just for the 22 states that already had Right to Work laws as of 2011 increased by 5.9 percent over the next five years, according to data released by the Labor Department on March 13. That’s roughly double the percentage increase for the 24 states where compulsory union dues were still permitted in 2016. (Early this year, Kentucky and Missouri became the 27th and 28th Right to Work states.)

And on average, cost of living-adjusted cash pay and benefits for factory-sector employees in Right to Work states are significantly higher than for their counterparts in compulsory-unionism states.

U.S. Commerce Department statistics, adjusted for regional cost-of-living differences according to an index calculated by the Missouri Economic Research and Information Center, a state government agency, show that in 2015 average annual compensation per Right to Work state manufacturing employee was $76,454. That’s roughly $3,800 higher than the average for states that still lacked Right to Work protections in 2015.

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 obstruction and “hate-the-boss” class warfare to resist by quitting the union and withholding all financial support for it. That’s a key reason why the 28 Right to Work states now represent the future of high-paying manufacturing jobs and businesses in the U.S.

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

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