Report Card Exposes Big Labor’s Hold on State Governments across the Country

Published July 1, 2008

As the presidential campaign builds, one thing has become apparent–the political Left in this country is aligned with Big Labor in a big way. Union political contributions overwhelmingly favor Democrats over Republicans, with an average of 80 percent of all union contributions going toward the former.

At the same time, private-sector labor union membership is at a historic low of around 7 percent of the workforce. Public-sector union membership is skyrocketing, with membership rates over 36 percent nationally.

If the elections this November strongly favor the Left, we can expect to see pro-union, anti-worker legislation forced on the states like never before. Public-sector unions will wield more power over state budgets and virtually control the labor market through mandated wage requirements and complicated project labor agreements.

Variables, Hard Stats

With these developments in mind, the Alliance for Worker Freedom compiled its first state-by-state labor report card. The 2007 Index of Worker Freedom: A National Report Card (IWF) gives state legislators, policy analysts, and the public a “snapshot” of how their state ranks on a variety of labor issues.

While other labor publications focus on policy implementation or measure quantitative data such as union density, this index incorporates both policy variables and measurable labor statistics to provide an examination of all key labor issues.

In incorporating the important factors affecting worker freedom nationwide, the index focuses on 10 variables: right to work, minimum wage, union density, paycheck protection, prevailing wage, defined contribution pension for public-sector employees, public employee collective bargaining rights, public-sector union membership, entrepreneurial activity, and workers compensation.

The study analyzes data for all 50 states and analyzes and incorporates not only legislative data but also quantitative data from the U.S. Census and Bureau of Labor Statistics (BLS) and Office of Labor Management Standards (OLMS), plus data gathered from local- and state-level nonprofits and think tanks and other sources.

High Rankings, Strong Growth

The study found states in the higher (better) rankings of the IWF directly correlate, allowing for outliers, with population growth when compared to the national average. Interestingly, states with high IWF scores and high population growth rates have a relatively low level of union density. States were ranked on a 0 to 10 scale, with higher rankings indicating higher levels of worker freedom.

All the first-quartile states rank below the national average in union density and well above the overall U.S. population growth rate. Thus it seems plausible to conclude that a state’s IWF score is a solid metric of worker freedom, as there is a positive correlation between a high IWF score and other key variables.

As one would expect, states that score in the bottom quartile on the IWF have relatively high population loss and high union density rankings. The bottom quartile states’ average population growth rate is far below that of the United States as a whole, and their union density is almost double the national average.

Utah Has Most Freedom

“Red” states have fared better than “blue” states according to the index, and states that grow in population have higher scores than those experiencing population flight or no growth. Utah scored the highest on the index, with a nine out of 10, earning the state an “A” grade. No state earned a perfect 10.

Six states scored zero, meaning they have essentially no real worker freedom. Those states, in continuing to maintain heavily regulated and controlled labor markets, are forcing population flight and repressing economic growth.

As nearly any economist will note, having a large small-business and entrepreneurial class is one of the best formulas for job creation and economic growth. All the states that scored an “F” had small-business creation below the national average and union density well above the national average.

Dishonor Roll

The following states scored zero out of 10, earning an “F” grade:

  • Connecticut, ranking 43rd in population growth;
  • Hawaii, ranking 23rd (and I speculate it finished that high only because of its desirable geographic location);
  • Minnesota, ranking 27th in population growth;
  • New York, with a 47th population ranking, actually lost people, showing a -.05 percent growth rate and a union density almost double the national average;
  • Pennsylvania, ranking 37th in population growth; and
  • Rhode Island, ranking dead last at 50th in population growth, having lost 0.6 percent of its population.

The index shows a higher level of worker freedom provides a better environment for a state’s workers and may actually bring an influx of population that further improves the state’s economy.

Brian M. Johnson ([email protected]) is Executive Director of policy for the Alliance for Worker Freedom, an organization dedicated to supporting worker freedom.

For more information …

The Alliance for Worker Freedom’s inaugural Index of Worker Freedom: