Economic Development, Government, and Human Resources

Right to Work economies represent a mixed bag

January 5, 2013
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Right-to-work legislation is hardly a new concept.

Way back in 1943 when the country was embroiled in World War II, Alabama and Florida lawmakers became the first in the nation to enact such legislation. After the war, nine more states followed in their footsteps.

According to the National Right to Work Legal Defense Foundation, 11 states had ratified RTW laws by 1948 and three more did the same in the 1950s. By the end of 2012, 24 states, including Michigan, had such legislation on the books.

Of course, Michigan’s economic destination as an RTW state is still to be determined. But 22 of the 24 RTW states have had the legislation in place since 1993, and their economic outcomes are a mixed bag today.

As of last November, 15 RTW states had lower unemployment figures than the nation’s seasonally adjusted 7.7 percent rate, while nine were above the national rate. North Dakota and Nebraska had the lowest figures at 3.1 percent and 3.7 percent, respectively. North Dakota’s was also the nation’s lowest, largely due to its natural gas boom. Nevada’s 10.8 percent was the highest among RTW states and also the country’s highest.

Twenty-one of the 24 RTW states had lower unemployment figures than Michigan, which was at 8.9 percent in November. Only Nevada and North Carolina had a higher percentage of unemployed.

However, only five of the 24 RTW states had higher median household income in 2011 than the U.S. average of $50,443. Nebraska, North Dakota, Utah, Virginia and Wyoming exceed that average, with Virginia leading the pack at $62,444. Virginia, though, is home to a lot of the federal government’s work force and organizations that lobby Washington.

Just nine RTW states had a higher household income than Michigan. Median household income in Michigan that year was $48,308, a figure the state established as a non-RTW workplace. Indiana, the state that served as one reason for the change made in Lansing, had an unemployment rate of 8 percent in November and a median household income in 2011 that was lower than Michigan’s, at $46,020.

Both Indiana and Michigan enacted RTW legislation in 2012.

The Right-to-Work numbers

Here is a comparison of the most recent unemployment figures and median household income for the nation's 24 right-to-work states, along with the year each state enacted its RTW legislation.

 

State

 

Year

Unemployment Rate

(Nov. 2012)

Median Household Income

 (2010-2011)

Alabama 1943 7.5% $42,407
Arizona 1946 7.8% $48,498
Arkansas 1947 7.0% $40,553
Florida 1943 8.1% $45,281
Georgia 1947 8.5% $45,741
Idaho 1985 6.8% $47,997
Indiana 2012 8.0% $46,020
Iowa 1974 4.9% $50,391
Kansas 1975 5.4% $46,827
Louisana 1976 5.8% $40,559
Michigan 2012 8.9% $48,308
Mississippi 1960 8.5% $40,227
Nebraska 1946 3.7% $54,488
Nevada 1952 10.8% $49,929
North Carolina 1947 9.1% $45,210
North Dakota 1948 3.1% $54,488
Oklahoma NA 5.2% $46,459
South Carolina 1954 8.3% $41,549
South Dakota 1947 4.4% $47,003
Tennessee 1947 7.6% $41,044
Texas 1993 6.2% $48,902
Utah 1955 5.1% $56,331
Virginia 1947 5.6% $62,444
Wyoming 1963 5.1% $54,178
USA NA 7.7% $50,443

Note: The unemployment rate is seasonally adjusted.

Sources: National Right to Work Legal Defense Foundation Inc.; Bureau of Labor Statistics, U.S. Department of Labor; and U.S. Census Bureau, Median Household Income 2010-2011.

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