Compared to Ohio, Wage Trends Favor Workplace Freedom States
Average wages in Ohio, Michigan, Indiana, and Kentucky were each leapfrogged by multiple workplace freedom states from 2001 to 2011 based on U.S. Bureau of Labor Statistics (BLS) data. Comparing Ohio and its 5 neighboring states to the 22 workplace freedom states – whose ranks Indiana joined in February 2012 – Ohio, Michigan, and Indiana were 3 of only 5 states with wage growth below 30 percent over the course of the decade.
In terms of BLS-calculated wages, slow wage growth resulted in an erosion of the relative advantage in Ohio and neighboring forced-unionism states, where workers can be required to pay a union boss as a condition of employment, versus workplace freedom states. Without adjusting for taxes or cost of living, the statewide average wage in Ohio fell from 7th-highest to 9th-highest.
Even as workplace freedom states added new jobs at much higher rates than Ohio and Ohio’s neighbors, the average wage in Michigan fell from 1st to 4th. Indiana’s average wage fell from 10th to 17th, while Kentucky’s average wage fell from 16th to 20th.
Ohio and neighboring states are highlighted in the following table.
If 2001-2011 trends persist, by 2021 Ohio’s average wage will be less than the average wages in Tennessee, Louisiana, Florida, North Dakota, and Alabama, as well.
The total number of jobs in Nevada increased by nearly 80 percent from December 1991 to December 2011, even as Nevada’s average wage overtook Ohio’s between 2001 and 2011. Wyoming, which also overtook Ohio in average wages between 2001 and 2011, added jobs at a rate of more than 40 percent from 1991 to 2011.
Meanwhile, Ohio’s economy added jobs at a rate of less than 6 percent. From 1991-2011, every workplace freedom state created jobs at a much higher rate than Ohio.
Between 2001 and 2011, 20 of the 22 workplace freedom states reported faster average wage growth than Ohio. Only Georgia and Idaho saw their average wage increase by a slower rate than Ohio’s.
Capital, a factor regularly ignored by union bosses who point to higher wages in predominantly northeastern forced-unionism states, accounts for much of the continued wage disparity between Ohio and workplace freedom states. In Ohio, Michigan, and Pennsylvania, an advantage in public and private infrastructure dating back to the 19th century has propped up wages while businesses have gradually moved south and west.
As Opportunity Ohio founder Matt Mayer wrote in his book Taxpayers Don’t Stand a Chance, “Without a doubt, the locus of economic freedom and prosperity in the 1850s resided in the manufacturing North.”
“Recall it was to Ohio that the runaway slaves in Harriet Beecher Stowe’s ‘Uncle Tom’s Cabin, or Life Among the Lowly’ so desperately tried to reach. In 1861, the North had twice as many people as the South. It had more than two times the miles of railroad track and nearly five times the number of factories,” Mayer explained. “Those factories employed nearly ten times as many workers.”
“This concentration of economic power, enhanced by the devastation wrought in the South during the Civil War, would remain geographically fixed in the North for the next 100 years,” Mayer added. “Many states in the South maintained anti-freedom policies through the 1960s.”
Workplace freedom states have been fast gaining ground when compared to Ohio. For decades, right to work (RTW) states have seen greater income growth than forced-unionism states nationwide.
“The real income for the average person in a RTW state was 1.6 times higher in 2008 than it was in 1977. However, for non-RTW states, it was only 1.5 times higher,” wrote the authors of a March 2012 report from the free-market Buckeye Institute.