NCPA - National Center for Policy Analysis

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

September 9, 2015

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.

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