“And the right course politically at this stage is to have states carry out their own right-to-work legislation. And as you know, right-to-work states, those 22, have created 3 million jobs over the last 10 years. The union states have lost about half a million jobs. So right to work is the way to go if you want good jobs.”
-- Former Massachusetts Gov. Mitt Romney at American Principles Project Palmetto Freedom Forum in Columbia, S.C. on Sept. 5, 2011
Romney’s comments go to the heart of the right-to-work debate, so they deserve some scrutiny and analysis.
Right-to-work states are those that prohibit “closed shops,” which require their workers to become dues-paying union members as a condition of employment. Twenty-two states have outlawed this practice.
Romney refers to the 28 states that don’t have right-to-work laws as “union states.” Workers in these states can forego union membership in a unionized workplace, but they still have to pay dues. Labor groups have their reasons for pushing mandatory dues on employees: they don’t want non-members asking for the same benefits and wages that union officials painstakingly negotiated for the workers in their ranks.
But is there really a documented link between “good jobs” and these state laws?
We searched the Labor Department’s Bureau of Labor Statistics Web site to find data on each state’s non-farm, seasonally adjusted employment during the past 10 years. Just as Romney said, right-to-work states have better employment numbers on the whole.
Romney’s camp relied on numbers from the BLS household survey. The data, which his team compiled in July, show that right-to-work states experienced a net gain of 3.6 million jobs during the past decade, while “union states” saw a net loss of 900,000 jobs over the same time span.
Romney obviously understated the true numbers, but he was still correct in saying that right-to-work states added jobs while the others experienced dips.
The former governor based his numbers off the bureau’s household survey rather than its payroll survey, which questions employers and only counts workers who receive pay from those employers.
The household survey, which goes out to households, counts unpaid family workers and the “unincorporated self-employed” among the employed. This is like placing the “employed” label on 16-year-olds who mow their parents’ lawns. These individuals don’t qualify for union membership, so it’s questionable whether their work status matters in the right-to-work debate. (For more on the differences between the two surveys, read the BLS explanation on page four of this document.)
Still, Romney relied on the more inclusive household survey, which tends to show higher employment numbers. The less inclusive payroll survey indicates that right-to-work states gained only 1.6 million jobs over the past 10 years while union states lost 2 million, even more than Romney claimed.
Romney spokesman Ryan Williams defended the use of the household survey.
It “provides a more robust set of data analysis options. For instance, if we wanted to look at changes in the unemployment rate or the labor force for Right to Work vs. Forced Unionization states we would need to be using [the household survey],” Williams said. “The point of our analysis is that Right to Work states have healthier economies and more job creation, so all economic opportunities are relevant, not just those in potentially unionized workplaces.”
On the whole, union-friendly states fare worse than right-to-work states when it comes to job creation in the past decade, regardless of which BLS data you look at. But despite Romney’s assertion, those figures don’t prove that right-to-work laws help attract jobs.
“It’s the same as saying that states with names that start with the letters ‘n’ through ‘z’ grew faster over the past decade,” said Gordon Lafer, associate professor at the University of Oregon Labor Education and Research Center. “That’s actually true, but it’s not meaningful in policy terms.”
Lafer also said that the lower labor standards and wages associated with non-union jobs do not necessarily correlate with employment growth. If that was the driving factor, he said, companies would simply move abroad instead of crossing state borders.
Romney’s analysis also fails to recognize that factors other than union policy can affect employment numbers. Jared Berstein, a former Labor Department economist and a senior fellow with the left-leaning Center on Budget Policies and Priorities, said other variables affect the job-growth equation, including natural resources, infrastructure, workforce quality, location, standard of living, schools, tax rates and other policy decisions not related to unionization.
“I think it’s important to get away from cherry-picking statistics, because there are so many moving parts,” Bernstein said.
The bottom line is that the right set of jobs numbers can favor pro-union arguments just as easily as anti-union arguments.
Bernstein and Lafer point to Oklahoma, where manufacturing jobs in Oklahoma peaked at 177,000 in 2000, the year before the state passed its right-to-work legislation.
BLS data shows that manufacturing jobs have declined there every year since 2001, with the exception of an 8-percent increase in 2011.One could use those numbers to say that Oklahoma hit the skids after becoming a right-to-work state.
“I don’t blame that on Right to Work, and the same is true of vice versa,” Bernstein said.
Here’s another example: Texas and Alaska both experienced employment increases of slightly more than 11 percent during the past decade. Both states also have lots of oil, but only one of the behemoths has a right-to-work law.
We understand that many people may have a philosophical belief that right to work laws are better for employees, and they frequently cite job growth data to make their case. (Others have argued that strong government unions inhibit job growth.) The counter argument from union advocates is that right to work states have lower wages and benefits.
But the fact remains that resources and other factors can affect employment as much as labor laws, and one factor should not be given greater weight than another.
The Pinocchio Test
Romney’s remarks appeared rooted in actual Labor Department data, even though he spouted some numbers that didn’t match his own analysis. Regardless, the former governor exaggerates the importance of these statistics, and he fails to acknowledge that factors other than labor laws play a role in determining job growth.
Romney earns two Pinocchios for his claim that “good jobs” and job growth result from right to work laws. His statistics are technically correct but his reasoning is too simplistic and ultimately could be misleading to ordinary people.