A dollar buys more in right-to-work states

Aug 4, 2017

study released by the respected Tax Foundation yesterday ranks Washington among the top 10 most expensive states in which to live. 

The study calculates the real buying power of $100 in each state to measure the true cost-of-living.  Once again, Hawaii, New York, California, New Jersey and Maryland rank as the top five highest-cost-of-living states, with Washington rounding out the top ten.  States in the south--Mississippi, Alabama and Arkansas, followed by South Dakota and Kentucky--boast the five lowest costs-of-living.  In these states a worker’s raw income may be lower, but he can buy more with it.

For example, spending $100 in Mississippi will get you consumer goods that cost $116.01 in a state closer to the national average, while spending $100 in Hawaii gets you just $84.18 worth of goods, and only $86.73 in New York.  In other words, Mississippians are 16% richer than their nominal incomes suggest, while residents of Hawaii and New York are around 15% poorer.

In Washington, spending $100 here buys what would cost only $95.42 in other states.  That’s a decline from three years ago, when the same study showed the real value of $100 in Washington was $96.90.  This means relative to other states, our cost-of-living is getting more expensive.

As I read the Tax Foundation report, I recalled a hearing on a right-to-work bill that was heard by the Senate Commerce, Labor & Sports Committee earlier this year.  During the hearing on SB 5692, the union officials opposed to ending forced unionism and giving Washington workers the right to choose whether they want a union to represent them, testified that a right-to-work law would result in lower wages for workers. 

During my testimony I pointed out that once the cost of living is factored in, workers in right-to-work states do not earn less than their counterparts in forced unionism states.  In fact, once the cost of living is considered, workers in right-to-work states actually earn more than their counterparts in forced unionism states like Washington.

I was heckled by union members for explaining this fact during my testimony.   Senator Karen Keiser even declared I was offering “alternative facts.”  I’m not sure what that means, but I think it means I was being accused of making them up.

Of course, I wasn’t making anything up.  As this most recent Tax Foundation study reveals, the simple fact is all of the top 10 highest cost-of-living states are also forced unionism states, where workers have no choice but to pay a union for representation they may not want.  Taking a broader look at the 20 highest cost states, all but three are forced unionism states. 

Conversely, of the 20 lowest cost-of-living states, where a dollar buys the most, all but one are right-to-work states with laws protecting worker choice.  And expanding the view to look at the 30 lowest cost states, all but five are right-to-work.

So yes, workers in right-to-work states may earn lower wages compared to workers in forced unionism states.  But since right-to-work states have a significantly lower cost of living, the same income will buy a much better standard of living for a family living in a right-to-work state than in a forced unionism state.

To put it in perspective, a worker earning $50,000 after taxes in right-to-work state Mississippi would have to earn an after-tax income of $67,000 in forced unionism New York just to afford the same standard of living.   That same Mississippi worker would have to earn $61,000 to enjoy the same standard of living here in forced unionism Washington.

The data shows consistently that people living in right-to-work states enjoy a more affordable cost of living.  Working families also benefit because they are not forced to give part of their take-home pay to union executives.  The Tax Foundation assessment of the real value of $100 in each state reinforces the fact that a working family’s income goes farther in right-to-work states.

Of course, facts often get in the way of a good sound bite, and the “right-to-work-for-less” slogan is a prime example.  It sounds good, so expect to hear it a lot, but the facts simply don’t back it up.

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