Income Argument Against Right-To-Work Legislation Isn't Valid

Michigan Capitol Confidential ^ | 12/14/2012 | Tom Gantert

[MichCapCon]

News reports about the pending right-to-work legislation are filled with dire predictions and statistics that fit specific story lines.

The Detroit Free Press, for example, ran a story after right-to-work legislation was introduced in the state House and Senate claiming that right-to-work states had lower-income residents than non-right-to-work states.

"The data on wages tell a fairly clear story," the Free Press story said. "Of the top 10 states in per capita income in 2011, seven were not right-to-work states. Of the bottom 10 states with the lowest per capita income, seven were right-to work states.”

However, Mackinac Center for Public Policy Fiscal Policy Analyst James Hohman said there are flaws in that logic.

The Free Press inaccurately used per capita income data to support a claim about wages, Hohman said.

Per capita personal income is different than wages. Per capita income includes such compensation as welfare payments and unemployment benefits and investment gains, all of which have little to do with the impact right-to-work has on wages, he said. Hohman estimated that per capita personal income is made up of about 65 to 70 percent of wages.

Also, the Free Press implied that where right-to-work states rank in terms of per capita income is due to right-to-work legislation.

That isn't necessarily true either, Hohman said.

Many right-to-work states lagged behind non-right-to-work states in per capita income before right-to-work even became an option in 1947.

For example, from 1929 to 1946, Texas’ per capita income was $540, which at that time put it 36 percent below the average per capita income of non-right-to-work states. In 2011, Texas’ per capita income was $40,147 and was just 8 percent below the average per capita income of non-right-to-work states.

“In other words, the gaps in incomes have existed before right-to-work laws and have only narrowed since,” Hohman said.

[SeminoleCounty]

From what I understand, this is a very light RTW law...nothing like the Southern states RTW

Also, whenever per capita income is considered....the cost of living in that area also must be considered. Texas PCI may be 8% below national average...but that income goes way farther than in most states...esp since Texas has no state income tax or property/luxury tax on cars (I think Florida may be the only other state with this non-tax combo)

[GeronL]

All the law does is say you do not have to pay union dues to get a job

[Chode]

and since Texas has NO personal income tax, what does THAT do to the gap since most of the non right to work states have one...

[jdsteel]

Are you trying to tell me that figures don’t lie but liars figure???

[waynesa98]

Your on he right track, but the ? is not just pretax pay vs post tax income. Its purchasing power. 250K in NYC is way different then West VA, Tx, or AZ and AK. Look at internal USA migration trends, tells you everything you need to know.

[octex]

Comparing wages and per capita income between RTW and non-RTW States is an useless exercise, because it does NOT give consideration to the differences in Cost of Living between the States.

A $250,000 house in Texas might cost possibly $750,000 or more in some of the States in the midwest, northeast, mid-Atlantic or CA.

Wages vs. cost of living is relative. Wages paid in RTW States are sufficient to maintain a good middle class lifestyle (for those who WANT to work instead of living on taxpayers’ money).

[Chode]

yup, that too...