Wages are 3.1 percent lower in so-called “right to work” (RTW) states, for union and nonunion workers alike—after correctly accounting for differences in cost of living, demographics, and labor market characteristics—according to “Right-to-Work” States Still Have Lower Wages, a new paper by EPI senior economist Elise Gould and research assistant Will Kimball. The negative impact of RTW laws translates to $1558 less a year in earnings for a typical full-time worker.

With Governor Scott Walker recently signing RTW legislation into law in Wisconsin, and lawmakers considering similar legislation in New Mexico, West Virginia, and Kentucky, it is important to examine the effect that RTW legislation has on workers’ wages. Gould and Kimball update a 2011 paper to reflect the latest data and cost of living measures. They also conduct a series of rigorousness tests and find that the 2011 econometric model holds up under any reasonable alternative specifications.

“It’s abundantly clear that right to work laws are negatively correlated with workers’ wages,” says Gould. “Our model uses widely-agreed upon variables, and holds up under a series of tests to ensure that the model is sound and not being skewed by the inclusion or exclusion or particular variables or estimate technique.”

In addition to the effect on wages, workers in non-RTW states are 2.4 times as likely to be in a union or be protected by a union contract than in RTW states. Meanwhile, workers in RTW states are less likely to have employer-sponsored health insurance or pension coverage.

“Policymakers who are concerned by the three-and-a-half decades of wage stagnation that have plagued American workers should be trying to strengthen unions,” said Kimball. “Collective bargaining is a clear way to raise wages, and right to work laws undercut it.”

RTW laws are not used to protect workers from being forced to join a union or contribute to a political cause they do not support. Under federal law, no one can be compelled to join a union as a condition of employment, and workers cannot be forced to pay dues used for political purposes. RTW legislation instead entitles employees to the benefits of a union contract without paying any of the cost. This has the effect of weakening workers’ ability to bargain collectively, thus limiting the effectiveness of unions in negotiating higher wages and benefits for their members.

This paper is part of EPI’s Raising America’s Pay project, a multiyear research and public education initiative to make wage growth an urgent national policy priority. Raising America’s Pay seeks to explain wage and benefit patterns—and the role of labor market policies and practices in suppressing pay—and identify policies that will generate broad-based wage growth.