Right-to-Work Laws Don't Lower Private-Sector Pay

COMMENTARY Trade

Right-to-Work Laws Don't Lower Private-Sector Pay

Sep 22nd, 2015 1 min read
COMMENTARY BY

Research Fellow, Labor Economics

As research fellow in labor economics at The Heritage Foundation, James Sherk researches ways to promote competition and mobility.

Currently, 25 U.S. states have right-to-work (RTW) laws. These laws prohibit union security agreements, allowing employees to decide for themselves whether or not they will join and financially support a union. Historically, unions argue that RTW laws reduce employee wages by 3 percent, but a recent Heritage Foundation study found no basis for these claims when cost of living was taken into account.

•In states where membership is voluntary, only 7 percent of workers are union members.
•In 45 states, government employees earn more than their comparative private-sector counterpart.
•In RTW states government employees make approximately 5 percent less than in non-RTW states.
•The reduction in government payroll in RTW states is an important economic benefit of RTW laws.
•Practically every Southern state and none of the Northeastern states have passed RTW laws.

Studies that unions used to support the claim that RTW laws reduce private-sector wages are fundamentally flawed by only partially controlling for cost-of-living differences. The Heritage Foundation found that while workers in RTW states do earn lower wages, they also have below-average living costs resulting in little effect on a workers' real purchasing power. 

-Source: Sherk, James, "Right-to-Work Laws Don't Lower Private-Sector Pay" Heritage Foundation, September 1, 2015.

-This piece originally appeared in the National Center for Policy Analysis

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