IN 2001, voters made Oklahoma a right-to-work state and ended compulsory unionism as a condition of employment. Evidence continues to mount validating the wisdom of that decision.
In a report from the Competitive Enterprise Institute, Richard K. Vedder and Jonathan Robe conclude that right-to-work laws “add demonstrably to the material quality of people’s lives.”
The apparent benefits of right-to-work laws are many. The authors note people have been migrating “in large numbers” from non-right-to-work states to right-to-work states. Economic growth is stronger in most right-to-work states. Personal incomes increase after passage of right-to-work laws, even after adjusting for “the substantial population growth that those laws also induce.”
Their research reviewed income levels in states that didn’t have right-to-work laws in 1977, a group that includes Oklahoma.
Vedder and Robe concluded that states without right-to-work laws during that time forfeited between $2,500 and $3,500 in per capita income. This translates into a median income loss of $13,000 per year for a family of four.
“That is the difference between, say, living in a three-bedroom home with one car and taking only one, short, nearby vacation to living in a larger four-bedroom home with two cars and taking a longer European vacation or a cruise,” Vedder and Robe write. “It is the difference between sending your children to a low-cost nearby community college and sending them to live four years at the state’s flagship university or even a private college.”
The total estimated income loss in 2012 from the lack of right-to-work laws in a majority of U.S. states was $647.8 billion.
Per capita income loss in Oklahoma was lower — $1,961— thanks to embracing a right-to-work law in 2001 and limiting the negative economic impact created by its absence. Even so, Vedder and Robe estimate the personal income losses caused by Oklahoma’s prior lack of a right-to-work law totaled more than $7.4 billion.
The authors argue right-to-work laws tend to lower union presence, and therefore reduce adversarial relationships between workers and employers. This makes a state more attractive for investment and job creation. While Vedder and Robe acknowledge that, “initially, workers’ wages typically rise a bit after joining a union,” they say unionization’s long-term impacts ultimately impede job creation and economic growth.
“In the short run, unionization may force wages up for those involved, but in the long run the debilitating impact on capital formation and the movement of human capital — workers — leads to lower growth in per capita income, so the overall long-term effect of unionization is negative, implying a positive effect of RTW laws that reduce union labor market power,” Vedder and Robe write.
Opponents often claim wages are lower in right-to-work states. But this ignores the economic conditions that existed in a state prior to approval of a right-to-work law. States that started with lower average incomes can still lag in state rankings even after enjoying significant economic improvement upon enactment of a right-to-work law.
Vedder and Robe acknowledge that some states lacking right-to-work laws are not struggling. They note much of New England is relatively prosperous despite the lack of right-to-work laws. Unions “never gained a foothold in the region’s most thriving sectors such as high technology,” they point out.
Vedder and Robe’s research is further proof that workers benefit from economic freedom, and that Oklahomans are benefiting from their decision to embrace that cause.