Business

States without Right to Work have higher taxes and living costs, fewer private sector jobs, new watchdog report says

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Proposal 3 would prohibit Right To Work laws

By Guy Page

The Fiscal Alliance Foundation released a new white paper today showing how some other states with heavy union influence and without Right To Work laws suffer from declining jobs and growing taxation and cost of living. 

The report examines Proposal 3, the proposed constitutional amendment on the November general election ballot,  in the context of Vermont’s current economic challenges—including declining private-sector employment, high taxes, high living costs and population loss—and compares employment, affordability, tax and migration data across states with different labor policies.

“Before Vermonters make a permanent change to the state Constitution, they deserve a comprehensive analysis of what it could mean for workers, taxpayers and Vermont’s economy,” said Paul Craney, Executive Director of the Fiscal Alliance Foundation. “This white paper looks at where Vermont stands today on jobs, taxes and affordability, and examines the economic experience of states that have taken different approaches to labor policy.”

The full white paper, The High Stakes of Proposal 3: What Vermont Voters Should Know Before Changing Their Constitution, examines Vermont’s economic position and the experience of other states in greater detail. 

Supporters of Vermont’s public unions disagree that Prop 3 will be harmful. According to the website Yeson3Vt.org, Prop 3 will provide constitutional protection to union efforts to improve wages and worker safety. “Large, national corporations increasingly try to cut corners when doing business in Vermont. They try to lower wages, ignore safety standards, and silence workers. Prop 3 stops them……While Vermonters have statutory rights today, rights that exist only in law can be changed by future politicians or struck down by courts. By placing these protections directly in our Constitution, Prop 3 provides permanent stability for the middle class.”

Supporters of Prop 3 include organized labor, the majorities of both Vermont House and Senate for two consecutive sessions, and former Gov. Howard Dean, who penned an op-ed in support of Prop 3 that has appeared in Vermont newspapers this week. 

According to the FAF white paper, from 2015 to 2025, private-sector employment grew 12.6% nationally and 17.2% in Right-to-Work states, nearly twice the growth rate of non-Right-to-Work states. Vermont moved in the opposite direction. Private-sector employment declined 0.6%, making it one of only three states to lose private-sector jobs over the decade.

Vermont also diverged from national trends in union membership, FAF said. From 2013 to 2025, the share of Vermont workers belonging to unions increased from 10.9% to 13.1%, while the national rate fell from 11.3% to 10%.

Vermont remains a high-cost state, with living costs 13.5% above the national average and a state and local tax burden of 13.6% of personal income. Higher wages alone do not mean greater affordability—purchasing power matters, FAF noted. The report found that cost of living averaged 16.6% above the national average in non-Right-to-Work states versus 4.3% below average in Right-to-Work states. After adjusting for those costs, residents of Right-to-Work states had nearly $3,500 more in disposable income per capita, despite lower absolute wages. 

“A bigger paycheck doesn’t necessarily mean a family is better off,” said Elizabeth Brown, State Director of the Fiscal Alliance Foundation. “The real affordability question isn’t simply, ‘What do you earn?’ It’s ‘What can you afford with what you earn?’ Higher wages don’t improve affordability if those gains are swallowed by higher taxes and living costs.”

Brown will be a guest today, 12:30 PM Friday September 18 on Chronicle Conversations on WVMT AM 620, FM 101.3 and wvmtradio.com. Calls and comments are welcome at 888-414-0303.

Stronger union states also carry higher tax burdens

Among the 17 states with the greatest share of public employees under union monopoly representation, state and local taxes consumed 12.7% of personal income—32% more than the average among the third of states with the least government-union bargaining power, according to the analysis cited in the report. Just over 46% of government-sector employees in Vermont are subject to “exclusive” union representation in the workplace, 10 percentage points above the national average.

“Vermont taxpayers already carry one of the heavier tax burdens in the country, and every increase in government labor costs eventually has to be paid for,” said Craney. “Giving collective bargaining permanent constitutional protection could increase pressure on public-sector wages, benefits and pensions and ultimately on the taxpayers who fund them. Before putting that language in the Constitution, Vermonters deserve to understand what it could cost.”

Illinois offers a warning

Illinois is the only state to have adopted a comparable constitutional labor amendment, passing Amendment 1 in 2022. Since then, its private-sector employment performance has been weak, while the state continues to carry some of the nation’s largest pension obligations. Illinois had an estimated $533 billion in unfunded pension obligations before the amendment, and subsequent legislation added another $11 billion in pension liabilities without new revenue to fund them, according to the analysis cited in the report.

“Illinois should give Vermonters pause,” said Brown. “Its experience raises questions about private-sector growth and long-term pension obligations that Vermont should examine carefully. California and Virginia voters rejected similar constitutional measures, and Vermont should conduct the same due diligence before becoming only the second state to take this step.”

Proposal 3 Is about choice

Right-to-Work laws do not prohibit unions or collective bargaining. They address whether an employee can be required to financially support a union as a condition of employment. Vermont currently has no Right-to-Work law prohibiting such requirements in the private sector. Proposal 3 would make it substantially more difficult for Vermont to adopt one in the future.

“This isn’t about being pro-union or anti-union. It’s about choice,” said Brown. “Workers should be free to join and support a union—and free not to financially support one. Before Vermont permanently limits the choices available to future workers, taxpayers and voters, we should understand the potential consequences, including the effect on an already challenged business climate.”

Some of the content for this news article was sourced from a Fiscal Alliance Foundation statement.


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Categories: Business

5 replies »

  1. We dont need unions. We need, less regulations, less taxes, and less greedy politicians and business owners. On the flip side, we need workers, who appreciate what they are getting and need to be paid accordingly, hence the greedy business owners. If all get a break, more to go around, in theory of course. It’s a broken system, aleays will be.

  2. Every single person should have the right to work without paying a thieving union dues when they don’t want to. For the state to require participation in a union is illegal as hell. They are openly admitting to being paid off by the unions.

  3. Prop 3 and Prop 4 Warning: Progressive Agenda At Play

    Vermonters who are not paying attention are likely to vote yes on both Prop 3 and Prop 4 because most people are not paying enough attention to the deception game at play here.

    plain and simple message to the voting public: VOTE NO on both Prop 3 and Prop 4

    Both are slight-of-hand progressive agendas to accomplish their nefarious means.

    When Joe or Jane Public reads these over in the voting booth, they will likely think these are harmless, do-good ideas that sound like they are good for everyone, and they’ll unwittingly vote yes on both propositions. Vermont is going to put itself into a can of worms if both of these State constitutional amendments get passed. Guy has interviewed excellent watchdog folks to warn of the consequences should either of these pass, but is the message to VOTE NO really getting out there? I’m not sure it is.

    People already have a right to unionize and a right to work without joining a union. We don’t need Prop 3

    Vermont already has statutory anti-discrimination laws. Specific clauses regarding equity measures could foster legal conflicts or group-based hierarchies rather than strict individual rights. We don’t need Prop 4.

  4. Some things to think about.

    Time To File A RICO Case Against Teachers’ Unions
    I & I Editorial Board
    September 18, 20262 comments
    If you want evidence that teachers’ unions are nothing more than taxpayer-funded left-wing rackets, look no further than the evidence dug up by the Progressive Policy Institute — a group founded by centrist Democrats.

    The stronger the union presence in a state, the worse students do on literacy instruction.

    It’s no secret that, despite the fact that taxpayers fork over roughly $1 trillion every year to finance public K-12 schools, math and reading scores are in decline.

    “Children have lost so much ground, they not only know less than their counterparts did a decade ago; older children know as little as they have this century,” notes the PPI’s Rachel Canter. A new Gallup poll finds that just 32% of adults are “completely” or “somewhat” satisfied with the U.S. school system, down from 51% in 2019.

    But that broad brush obscures important differences. Namely, that some states are doing much better than others. And what do these states have in common? Teachers’ unions are weaker.

    Wall Street Journal (screenshot)
    “When my colleagues and I compared the Fordham teachers’ union strength ranking to ExcelinEd’s early literacy tracker, we found a strong, negative correlation between the two — the more powerful the unions, the fewer literacy policy principles the state had adopted,” Canter wrote in the Wall Street Journal. (See the chart at right.)

    Sure, there are some outliers, but even those prove the point that teachers’ unions are a racket. As Canter notes, needed reforms in New Mexico, Maryland and Massachusetts came “despite pushback from their unions.”

    The Massachusetts literacy reform bill requiring “evidence-based literacy instruction” in public schools has been described as “the greatest legislative loss for the teachers’ union in a decade.”

    It’s not as though there isn’t evidence that these reforms work. Mississippi embarked on a comprehensive, science-based literacy effort more than a decade ago, and saw its students go from the bottom of the barrel nationwide to at or near the top 10 in reading and math.

    So let’s see if we have this right. Each year, teachers’ unions collect more than $700 million in dues, all paid by taxpayers, and promise to “champion high-quality public education” and “fulfill the purpose of public education,” according to the mission statements of the American Federation of Teachers and the National Education Association.

    Yet they wage wars against reforms that they know will improve education outcomes. Not just literacy programs, but merit pay, school choice, and countless other common-sense reforms.

    So, what are these unions doing with all that money they collect if not fighting to fulfill their stated missions?

    Turns out, they are far more interested in getting Democrats elected and pushing far-left causes.

    Earlier this year, a report from Defending Education found that national teachers’ unions “have directed roughly $669 million toward left-wing political groups, advocacy organizations and campaigns since 2015,” a number that tops $1 billion when you count state and local affiliates.

    This includes more than $2.4 million to the far-left Center for American Progress, $7 million to the Democratic Governors Association, nearly $26 million to the Democrats’ House Majority PAC and $32 million to the Senate Majority PAC. And, maybe because they figure it will cut down on class sizes, more than $400,000 to pro-abortion groups.

    In 2024, the NEA and AFT gave more than $6 million to Democrats and less than $60,000 to Republicans.

    Add it all up, and you have organizations that extort money from taxpayers to finance a protection racket for themselves, their Democratic patrons, and various far-left causes (which few taxpayers would support), while engaging in fraud by pretending to be looking out for the interests of public-school students.

    We’re not lawyers, but we’d say that classifies as a criminal racket under the Racketeer Influenced and Corrupt Organizations Act.

  5. I always thought that it was unfair to workers when their union endorses a candidate that most of the employees detest. Their union dues help support a piece of crap candidate and the workers can’t do anything about it. I may be wrong but I don’t think so.

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