Give Up Blog

Sunday, November 06, 2005

Right to work or just ripped off?

That Walmart story from the LA times got me thinking about why WalMart loves the South so much, as do many other employers who like no worker protection regulation.

Consider this figure:

The unionized states have workers that make approximately 20% more than the states that are hostile to unionization. But then you ask, well, those what about unemployment? Don't unions drive out jobs? Again, not really.

There really isn't much difference between the right to work and all other states (the first two bars). If there is an effect at all it is slight and can't be justified given the standard deviations indicate the unemployment rates aren't significantly different. Further, when you evaluate the data by actual union characteristics (the 3rd-5th bars) you see unionization doesn't appear to negatively affect overall unemployment for a state at all. So, by all means red states, oppose workers rights and get paid less, see if we care. On top of that you get WalMart all over the damn place and at a Medicaid cost of $900 per worker per year, you'll bankrupt your states in no time.

Next we'll discuss why the red states just won't go bankrupt (hint: the blue states subsidize them outrageously).

Bureau of Labor Statistics, 2002 and 2003 Occupational Employment and
Wage Estimates. www.bls.gov

Bureau of Labor Statistics, State and Regional Unemployment, 2002 and 2003 Annual Averages. www.bls.gov

3 Comments:

Anonymous said...

Unionization rates are much higher among public employees than private sector employees. The wages paid to public employees are also less sensitive to the market than those paid to private employees. For those states with relatively high unionization rates and high wages, I have to wonder whether this is primarily a demonstation of the power of public employee unions.

How would unemployment and (private sector) wages vary with unionization if one were to look at the unionization of private sector employees alone? That might make for a very interesting comparison with the figures provided.

8:56 PM, December 03, 2005

Anonymous said...

I forgot to add ... It would also be interesting to look at the cost of living relative to wages. I'm guessing that the cost of living is lower in states with lower wages. I'm also guessing that higher rates of unionization correlate with higher costs of living.

12:14 PM, December 04, 2005

Anonymous said...

I have to agree with anonymous who posted above on the cost of living. additionally, the first graph is misleading. The scale used makes it seem that RTW states earn about half as much as non-RTW states. (The bars are only half as tall.) If you look at the numbers, RTW states have an average wage that is 85% of non-RTW states. If one has spent time in both the Southeast (which is primarily RTW), and the Northeast (which is primarily non-RTW), one knows that once the cost of living is taken into account, workers in the RTW states are probably earning more than those in non-RTW states in real terms.

Additionally, there is probably some heterogeneity in occupations that needs to be accounted for before a valid comparison can be made. For example, when comparing NY and NC, one might expect NY to have way more high paid employees in the financial sector than NC does. This would cause NY wages to be higher on average than NC wages, even though unionism is virtually non-existent in the financial sector.

My advice would be for readers of this post to evaluate the persuasiveness if this argument against RTW laws with extreme caution!

12:32 PM, June 22, 2007