Who Are Right-to-Work Laws Good For?

Originally Published on 11/03/2017 by Crain's Chicago Business

Before Republicans—and even some Democrats—band together and steamroll the state into passing the right-to-work laws that they claim are essential for job growth in Illinois, let's ask an important question. Even if the governor is right that such laws are better for business, are they good for anything and anyone else? Evidence suggests the answer is no.

Indiana may be getting more jobs—as the governor, the Chamber of Commerce and various Republicans assert—but it appears that, as Indiana is shelling out billions to lure corporations to the state, only the corporations are getting rich.

By every measure, Illinois residents are better-off than their counterparts in every neighboring state. Median household income in Illinois in 2015 was $59,588. In Indiana—just $50,532. Are other nearby states doing better than Illinois—where unions collect dues from everyone who gets the benefits they have negotiated? The answer is no. Median income in Wisconsin's was $55,638, in Iowa $54,736, In Missouri $50,238, and in Kentucky a mere $45,215.

And it's not simply median income where Illinois residents do better. Gov. Bruce Rauner and Republicans may be right that Indiana is better for business, but business is not better for the people of Indiana—even when they're employed. According to the American Community Survey, in 2014 Illinois per capita income was $30,417, and median family income $71,796. In Indiana, per capita income was $5,000 less and household median a whopping $11,000 less. No wonder businesses like Indiana, where they are squeezing blood from the proverbial turnip.

As important, between 2011 and 2015 income in Illinois grew faster than in the surrounding states. Springfield rhetoric aside, median income in Illinois increased by $6,354 compared to just $4,000 in Indiana. In tough times, with unemployment unacceptably high, particularly among African-Americans, Illinois residents are doing far better than their neighbors to the east.

A little farther afield the picture does not improve. In Wisconsin, Missouri, Iowa, Michigan and Kentucky, median per capita, family and household incomes are all significantly lower than in Illinois. Businesses may do better in those states but residents surely do not.

Median income in Indiana actually declined over the last decade from a high in 2000 of $55,182. The state may have added more jobs than its neighbors, but it did so by impoverishing its residents. According to From 2007 to 2009, Indiana added 14,726 low-wage jobs as it shed 35,814 middle-wage and 23,369 high- wage jobs. The only Indiana statistic that was higher than its neighbors was the increase in poverty, which soared 29 percent.

Right-to-work ideologues argue that while lower wages may come as part of the package, the job growth is worth it. But as the old Gershwin song goes, "It ain't necessarily so." A 2016 Pew Report on job growth reveals that 9 of the 15 states with the most and the least growth were right-to-work states. In other words, such laws make no difference at all. Where the right-to-work laws do appear to make a difference is in poverty. Of the 20 states with the highest individual, family and household incomes, only three are right-to-work states. On the other hand, of the 20 states with the lowest incomes, 18 have enacted right-to-work laws. Such states also rank lowest in educational funding and attainment and health status while among the highest in reliance on federal government programs like food stamps and the earned Income Tax Credit. These states rely on pro-union/high wage states like Illinois, California and New York to send dollars their way through the redistribution of federal tax dollars.

The inescapable conclusion is that corporations—not real people—are the primary beneficiaries of right-to-work laws and that collective action by and on behalf of workers leads to lives with relative security, dignity and the possibility of better days.