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

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.