The Truth About Wages in Right-to-Work States

The Truth About Wages in Right-to-Work States

Private sector wages are not reduced in right-to-work states as union advocates have argued, according to a new report released Tuesday by The Heritage Foundation.James Sherk, a research fellow in labor economics at The Heritage Foundation and the author of the study, cited an Economic Policy Institute paper that claimed right-to-work laws reduce wages by 3 percent.Sherk found the conclusions “fundamentally flawed” because the study only partially accounted for the cost of living differences across states. He said this is a problem because companies in states with higher costs of living pay their employees higher wages to account for steeper expenses.Every state with compelled union membership and Virginia, a right-to-work state, has living costs above the national average, which is how EPI arrived to its finding that right-to-work states have lower wages.Once cost of living was accounted for in the Heritage study, Sherk said EPI’s results “disappeared” and right-to-work laws had no effect on private sector wages.
Sherk’s study did find government employees make about 5 percent less in right-to-work states, but he attributed this to government unions’ ability to affect wages by electing “political allies” who will give them “favorable contracts.”“All of these arguments of right-to-work wages really evaporate when you look under the hood of all these studies,” Sherk said.Though more than three-quarters of Americans believe union membership should be voluntary, 25 states still have compulsory unionization.