The Gallup polling also showed that unions are favorable across generations and party lines.

• 77% of adults ages 18–34, 74% of adults ages 35–54, and 67% of adults ages 55 and older approve of unions. 

• 89% of Democrats, 70% of Independents, and 52% of Republicans approve of unions. 

This is just one of many recent surveys demonstrating the broad popularity of unions:  

• Unions are more popular than big business. People in the U.S. favor unions over big business by more than 16 percentage points—the greatest gap ever recorded.
• 56 million U.S. workers would join a union tomorrow if they could. 43% of nonunion workers would vote to unionize their workplace if given the opportunity. 

• Majority views union decline as bad for U.S. Most people in the U.S. say the decline in union density is bad for the country (60%) and bad for working people (62%). 

It should be no surprise that the public views unions favorably: Unions help workers win higher wages, advocate for safer and healthier workplaces, support a thriving middle class, and strengthen democracy by boosting civic participation.  

Get the fact sheet

Now is the time for policymakers to pass comprehensive legislation making it easier for workers to unionize. A new EPI report shows that tripling U.S. union membership would deliver: 

• 14.5% wage increases for the typical worker, equal to more than $7,700 per year or nearly $270,000 over a 35-year career. 

• $1.2 trillion shifted into workers’ pockets every year, reversing a third of the growth in inequality since 1979.  

• Health insurance for 6.8 million more people.  

• Greater equality and smaller racial wage gaps. Unions raise wages for everyone and help prevent pay disparities, especially for Black and Hispanic workers.  

Read more about the benefits of rebuilding union power—and the roadmap to get there.

Key takeaways:

• So-called right-to-work (RTW) laws undermine workers’ ability to form unions. Unionization rates are clearly lower in RTW states—and since unions raise wages, that suppression lowers pay.   

• States with RTW laws are also more likely to have other anti-worker laws and generally weaker labor standards. This is likely because both RTW and other anti-worker policies stem from the same anti-worker political roots, and because RTW’s suppression of unions deprives these states of strong potential political champions (unions) for other pro-worker policies.  

• Non-RTW states are more likely to have pro-worker policies like higher minimum wages and prevailing wage laws, restrictions on noncompete agreements, pay transparency policies, and more protective unemployment insurance benefits. 

• As a result, workers in RTW states are paid 6.7% less on average than workers in non-RTW states—more than double the 3.2% wage penalty we found in 2015. That means the RTW wage penalty has increased in recent years and now translates to over $4,000 less per year for a median full-time worker in a RTW state.

• The RTW wage penalty is steeper for women (7.3%) than for men (6.3%), and for Black (9.7%) and Hispanic workers (10.0%) than for white workers (5.4%).   

• Lawmakers already have the policy tools they need to boost wages and improve other outcomes for workers: 

• • At the state level, rolling back existing RTW laws is the most powerful lever.  

• • At the federal level, the Protecting the Right to Organize Act (which includes a ban on RTW) would be transformational for efforts to organize workers.  

• • Policymakers could also make progress on numerous other fronts, such as making UI systems more protective and raising minimum wages. 

In the United States, so-called right-to-work (RTW) laws are anti-union state policies promoted by big business interests to weaken unions and limit workers’ bargaining power. Despite the name, RTW laws do not provide any sort of job protection or right to a job. Rather, the deceptively named policy starves unions of resources, making it harder for them to negotiate collectively for better wages, benefits, and working conditions.

RTW laws emerged in the 1940s as part of anti-union campaigns to suppress worker organizing and maintain Jim Crow labor relations in Southern states; these campaigns worsened economic inequality and racial disparities (Childers 2024). Today, 26 states have active “right-to-work” statutes.1

As intended, RTW laws reduce union density (the share of workers who are either members of a union or covered by a union contract). These policies prohibit unions and employers from negotiating over union security—the contract terms under which workers covered by a union contract either join the union or pay an agency fee covering their share of representation costs. This deprives unions of critical resources and suppresses union membership (Sherer et al. 2026). RTW states—specifically those with RTW laws for at least 25 years—have an average union density rate of 6.2%, far less than half the union density rate in non-RTW states (16.0%) (see Appendix Table 1).

RTW laws not only reduce the number of workers with collective bargaining agreements but also limit unions’ political power to advocate for stronger labor standards for workers more broadly. This is, in part, why states without anti-union restrictions are more likely to pass protections such as prevailing wage mandates, restrictions on noncompete agreements, higher minimum wages, and pay transparency laws.

To assess the effects of RTW laws on outcomes for workers, we analyze whether wages are lower in RTW states after controlling for key demographic-, job-, and state-level characteristics (see Appendix Table 1 for full demographic controls as well as median and average wages by RTW status). We find that wages in “right-to-work” states are, on average, 6.7% lower than in non-RTW states. This penalty is worse for Black and Hispanic workers, as well as young workers and those without college degrees. Notably, the penalty is also larger for nonunion workers. This is because strong unions benefit workers across the state, not just those in unionized workplaces (Shierholz et al. 2026). In RTW states with weaker unions, nonunionized workers do not experience these positive “spillover” effects.

Pro-worker policies are more common in states without RTW laws

The strong correlation between wages and states’ RTW status is not surprising. Not only do RTW states have lower unionization rates, leaving workers with less leverage to bid up wages, but they often maintain other anti-worker policies. Combined, these anti-worker policies tilt bargaining power toward employers, weakening workers’ ability to garner higher wages. States without RTW laws are more likely to have a wide array of stronger labor standards in place that raise pay, protect workers’ ability to switch jobs, and support those who lose one. These same states—where unionization rates have not been suppressed by RTW laws—have a better safety net and stronger labor standards in part because stronger unions give workers more political power and the ability to better lobby for pro-worker policies writ large (Shierholz et al. 2026).

Figure A displays the incidence of these labor standards for states with and without anti-union RTW laws.2 This is far from a complete list of relevant policies that may correlate with RTW status and wage levels, but they are illustrative.

Figure A

Prevailing wage

Prevailing wage laws apply to certain contracts for public works and require that contractors and subcontractors pay the employees performing such work a prevailing wage rate. The prevailing wage rate is defined as the average wage paid to similarly employed workers in a specific occupation in the area of intended employment. Federal law requires this of federal contracts while state and local laws may apply to state and local contracts.

Prevailing wage laws are more common in non-RTW states. Figure A shows that nearly all (96.0%) of non-RTW states have prevailing wage laws, while only 23.1% of RTW states have these protections for workers on state contracts.3 Without prevailing wage requirements, contractors may reduce their workers’ wages to win bids on government contracts—putting contractors who pay their workers fair wages at a disadvantage.

Restrictions on noncompetes

Noncompete agreements are employment provisions that ban workers at a company from joining a competing business or starting their own for a set period after leaving a job. Noncompetes undermine economic dynamism and innovation; they depress business formation and labor mobility, hurt productivity and growth, raise prices, shrink workers’ wages, and restrict workers’ freedom (Shierholz 2024).

One of the most effective ways workers achieve higher wages is by securing another offer, and then either renegotiating their current salary or leaving for the new higher-paying job. It is not surprising then that workers in states that enforce noncompetes are paid less than similar workers in states that do not enforce noncompetes (Starr 2019). States without anti-worker RTW laws are nearly four times as likely to restrict noncompetes as RTW states (44.0% vs. 11.5%).4 In this analysis, we include only full bans on noncompetes and states with income-based restrictions. States with only small carve-outs for certain occupations provide a much weaker standard and are, by definition, less broad, so those aren’t included.

Minimum wage

Raising the minimum wage is particularly important for lower-wage workers. While the federal minimum wage has sat at $7.25 an hour since 2009, losing over 30% of its purchasing power, workers in 31 states enjoy a higher wage floor (Zipperer 2026). Non-RTW states are three times as likely to have minimum wages higher than the federal minimum compared with RTW states (92.0% vs. 30.8%). This is not a small difference. As of 2026, the average value of the minimum wage in non-RTW states is 60% higher—$5.36 more per hour—than in RTW states.5

Pay transparency

Pay transparency laws prevent employers from lowballing wage offers by requiring them to include wage information in job postings. While they vary, all laws include some requirement that employers provide salary information in job postings or if directly requested by applicants. Lack of knowledge about wages and benefits keeps potential workers in the dark and limits their ability to learn about and apply for better paid opportunities. A study on Colorado’s newly passed wage transparency law found that wages increased 4.2% faster than those in neighboring states without such laws (Shedge 2025). Further, wage transparency has the potential to reduce gender- and race-based discrimination by arming jobseekers with more information and limiting employers’ ability to pay different amounts to similarly qualified candidates. Only two RTW states have a pay transparency law, compared with 64% of non-RTW states.6

Unemployment insurance

Access to unemployment insurance (UI) also shapes workers’ ability to seek better wages. When a worker is laid off and their household income falls, unemployment insurance supports them and their family until they find another job. UI is a joint federal-state program that relies on state UI systems to effectively deliver benefits to unemployed workers. States differ in their rules and approaches under the federal UI framework, leading to wide variation in the share of unemployed workers receiving UI benefits (the UI recipiency rate).

Better UI not only cushions workers and their families but also provides workers with additional leverage in the labor market. When UI access and generosity fall, job seekers are forced to settle for lower wages and employers leverage this by offering less (Dahl and Knepper 2026). On the flip side, research shows a positive relationship between more UI generosity and wages (Rinz and Wasser 2026). The UI recipiency rate is significantly higher in non-RTW states compared with RTW states (32.8% vs. 18.7%).7 This is not surprising because non-RTW states have stronger unions, which fight to increase UI eligibility, ease of access, benefit levels, and benefit duration—to the benefit of all workers, union and nonunion (Hertel-Fernandez and Gould-Werth 2020). As with other pro-worker policies, better UI access can contribute to higher wages in non-RTW states.

Other policy levers

Not only do workers in non-RTW states enjoy higher wages, but they also benefit from increased economic security thanks to higher health insurance rates, higher public education spending, paid family and medical leave access, and no preemptions against higher labor standards. Every non-RTW state expanded Medicaid compared with fewer than two-thirds of RTW states (61.5%).8 Unsurprisingly, the uninsured rate is higher in RTW states than in non-RTW states (8.9% vs. 6.2%).9

Investments in public education deliver a more productive workforce and more informed and engaged society. Increased funding for schools not only improves educational attainment, but also increases wages and family incomes (Jackson, Johnson, and Persico 2016). Non-RTW states spend 45% more on public education than RTW states ($24,084 vs. $16,620).10 Paid family and medical leave provides essential benefits that help workers maintain their livelihoods while taking care of themselves and their families. These laws are also shown to increase labor force participation, job retention, and earnings (Glynn 2020). Only one RTW state has comprehensive paid family and medical leave provisions for private-sector workers, compared with 56% of non-RTW states.11

Finally, some cities, counties, and other local governments enact policies that raise standards for working people, but some state legislatures force those standards back down with preemption—the use of state law to void local ordinances. Preemptions apply to policies such as minimum wage, prevailing wages, paid leave, and fair scheduling (EPI 2025). Preemption laws interfere with local governments’ ability to set job quality standards. They suppress wages, exacerbate racial inequities, and reduce worker power (Sherer, Cohn, and Ahdoot 2025). These preemptions are more common in RTW states.

Workers in RTW states are paid less

Our analysis of the relationship between wages and RTW status puts states into three categories: long-term RTW states, always non-RTW states, and “switcher” states that have changed their RTW status since 2011.12 Appendix Table 1 provides descriptive statistics for these three groups of states, and Appendix Figure A provides a map of states by RTW status. Our estimates focus on comparisons between long-term RTW states and always non-RTW states.

A simple comparison of hourly wages, the primary variable of interest, reveals that average wages are 22.9% higher in non-RTW states ($40.28 in non-RTW states vs. $32.78 in RTW states). Median wages are 19.2% higher in non-RTW states ($28.79 vs. $24.16). Because there are differences between worker-, job-, and state-level characteristics in RTW and non-RTW states, and since some of these characteristics will directly impact workers’ wages, it is important to control for these factors in a multivariate regression model. This allows us to more accurately identify the relationship between RTW status and wages.

We estimate log wage equations using Bureau of Labor Statistics Current Population Survey Outgoing Rotation Group (CPS-ORG) data for 2023–2025. We pool three years of data to minimize any spurious year-specific economic relationships, thereby helping us achieve more precise estimates. The total sample consists of 234,155 workers, ages 16+, who earn wages and salaries. About 42% of the sample lives in states with RTW laws (see Appendix Table 1 for the sample’s full demographic breakdown).13

In Table 1, we construct a regression model, starting with an unadjusted framework and building up to a model that controls for the full range of explanatory variables. The dependent variable is the natural log of hourly wages.

The variable of interest is an indicator variable when the worker lives in a long-term RTW state. We also include an indicator in the regression for a switcher state, though that is not our focus of interest (see Appendix Table 2 for a complete set of regression results, including the coefficient for switcher states). There are currently 26 states with RTW laws on the books and 25 without them including Washington, D.C. (see Appendix Figure A). There are five switcher states that have adopted RTW in recent years: Indiana (2012), Michigan (2013), Wisconsin (2015), West Virginia (2016), and Kentucky (2017). In 2023, Michigan became the first state to repeal its RTW statute. We separate the five switcher states from the analysis to better isolate the relationship between wages and the long-run effects of RTW.

The naïve model, without any controls, suggests that workers in RTW states are paid 17.8% less than workers in non-RTW states (Model I in Table 1).14 But many factors contribute to wage differences: demographic characteristics such as age, race/ethnicity, gender, and level of education are relevant as well as job-related factors such as work hours, occupation, and industry. Since these vary across states, they reduce the measured relationship between RTW status and wages. Model II shows that when the analysis compares more similar workers with each other, the RTW penalty drops to 14.0%.15

There are other factors that are different in RTW states, aside from these individual and job-related characteristics. Most importantly, the cost of living. The cost of living in non-RTW states is higher than in RTW states, as shown in Appendix Table 1. In prior research, Gould and Kimball (2015) showed that choice of price indicator makes no material difference on the measured relationship between RTW and wages. Here we include the Bureau of Economic Analysis’ Regional Price Parity index: The regional price parity index is higher in non-RTW states.16 Not surprisingly, this correlates with wage levels and therefore is important to include in the model. As with earlier studies, we also include state unemployment rates to control for differences in economic conditions.

After including the full set of demographic, individual-, and state-level labor market and cost of living controls (Model III), our analysis finds that workers in RTW states are paid 6.7% less than similar workers in non-RTW states. For the average worker, this is a difference of $2.70 per hour, or more than $5,600 for full-time workers at 2,080 hours over the year. However, because the average is skewed upward due to wage inequality, an assessment at the middle of the wage distribution provides a more conservative but perhaps more robust estimate of the RTW wage penalty. Acknowledging that this is a likely understatement of the full relationship, the RTW wage penalty for the median worker at full-time hours is over $4,000 for the year.

Table 1

This does not mean that RTW laws are a causal explanation for this 6.7% wage penalty. As demonstrated earlier in this report, RTW status correlates strongly with a number of other anti-worker policies. Other research has attempted to calculate the causal effects of RTW laws on wages. Using the switcher states in the most recent period, Fortin, Lemieux, and Lloyd (2022) found smaller wage penalties, which is to be expected given the shorter time frame for measurement post-adoption. Our wage penalty for switcher states—shown in the final column of Appendix Table 2—is much smaller (closer to zero) than the coefficient for long-term RTW states, though not statistically significant at conventional levels. Dasgupta and Merchant (2023) also examine states recently adopting RTW laws and find a statistically significant decline in annual wages by almost $1,900. Again, these states are more recent RTW adopters, so the full effects we find may take time to materialize.

We find that this relationship between long-term RTW status and wages remains economically and statistically significant under alternative specifications of our econometric model. For instance, removing major industries and occupations changes the coefficient to -0.071. Restricting the model to RTW status as of 2026—removing the separate indicator for states that switched since 2011—yields a coefficient estimate of -0.060. Doing the same but dropping Michigan (since its status changed in the measurement period) results in a coefficient of -0.064. In our final model, we do not include an indicator for unionization, unlike Gould and Kimball (2015). If we reintroduce that variable, the coefficient is -0.063.

In each of our regressions discussed above, we include a three-year average as it improves data reliability and allows us to run smaller groups of the data (see next section). When we run our analysis using just 2025, our results do not change. In fact, when we run our three-year final model for the periods 2021–2023, 2022–2024, and 2023–2025, our coefficients remain in the -0.070 to -0.068 range.

Wage penalties are steeper for women, Black, Hispanic, and nonunion workers in RTW states

The RTW penalty is not uniform across demographic groups and other labor market characteristics. Table 2 below shows the results of a series of final-model regressions (comparable to Model III in Table 1) for a set of demographic groups.

We find that women’s wages in RTW states are penalized at a higher rate (7.3%) than men’s (6.3%). The wage penalty also persists across all racial and ethnic groups, but it is almost twice as large for Black (9.7%) and Hispanic (10.0%) workers as for similar white workers (5.4%) and more than twice as large as for Asian American and Pacific Islander (AAPI) workers (4.6%). Young workers between the ages of 16 and 24 face a greater penalty (8.4%) than older workers. And workers without a college degree experience a much higher penalty (7.8%) than workers with a college degree (4.7%).

Table 2

It is particularly important to note that RTW laws have a statistically significant negative effect on the wages of nonunion workers, as shown in the last row of Table 2. Our analysis indicates that nonunion workers in RTW states have wages that are 6.3% lower, on average, than their counterparts in non-RTW states. Union members likely experience a smaller penalty (3.6%) because their wages tend to be higher than those in nonunionized workplaces, regardless of the state’s RTW status (McNicholas et al. 2025). However, the wage impact of unions extends beyond those directly covered by a union contract. Unions lift wage standards across entire industries, meaning that nonunion workers in states with higher union density are more likely to receive better pay.

As the gap in wages and labor standards between RTW and non-RTW states has grown, so has the wage penalty

Using our final model (Model III in Table 1) with pooled 2023–2025 data, we find a 6.7% RTW wage penalty—a larger penalty than we found in earlier examinations. For example, we found a 3.2% wage penalty using data for 2009 (Gould and Shierholz 2011) and pooled 2010–2012 data (Gould and Kimball 2015). Some of the increase in the current estimate of the RTW wage penalty reflects small changes (likely improvements) in our methods. But part of the higher estimate persists even when we apply our current methods to earlier data: Applying these methods to the 2010–2012 data yields an RTW wage penalty of 4.7%.

One method change concerns “switchers”—states that changed from non-RTW to RTW status (or back) since 2019. In the 2010–2012 period, there were no switchers to affect the data.17 In our analysis, we isolate switchers from the long-term RTW group, but the RTW penalty remains negative and significant no matter how one deals with the issue of switcher states. For example, recategorizing the five switchers to match their 2012 status (all non-RTW) lowers the measured RTW wage penalty in the 2010–2012 period to 4.1%, but it remains significant.

Other changes relative to our earlier research include controlling for public-sector status; removing union as an independent variable from the regression; using the full working age range of 16 and up (as opposed to 18–64); and correcting an issue with nonrandom missing values to the metropolitan variable. We’ve further clustered standard errors at the state level as suggested by Douglas (2024), which does not affect the size of the coefficients, only the size of their standard errors and resulting statistical significance.18

Setting those minor model differences aside, a consistent comparison over time sees the RTW wage penalty rising from 4.7% in 2010–2012 to 6.7% in 2023–2025. One possible reason why this RTW wage penalty grew could be the increasingly divergent policy trajectories of RTW and non-RTW states over this period.

For example, the gap between minimum wages in RTW states and non-RTW states has grown since 2010, largely because policymakers in most RTW states have refused to increase their minimum wage despite the fact that the federal minimum wage has been stagnant in nominal terms since 2009. In that year, the average minimum wage in RTW states was $7.25 while the average minimum wage in non-RTW states was $7.54. That gap has grown enormously, from just $0.29 per hour in 2009 to $5.36 per hour by 2026 ($14.24 in non-RTW states vs. $8.89 in RTW states).

There were other potentially relevant policy changes between 2012 and 2025. The first state-level pay transparency law was passed in Maryland in 2020. Seventeen states followed suit in subsequent years, 15 of which were non-RTW states. On the flip side, six states have repealed their prevailing wage laws since 2012—all of which were RTW. Only one state, Michigan, reinstated its prevailing wage law. It did so in 2023, the same year it repealed RTW. While this is far from an exhaustive list, it’s not surprising that the measured RTW wage penalty has grown over time.

Repealing anti-union “right-to-work” laws and strengthening labor law is key to raising wages

The wage penalty for workers in RTW states has grown since the last time we conducted this research a decade ago. Long-standing and more recently enacted anti-union RTW laws in 26 states, in tandem with other anti-worker policies, have further eroded workers’ collective bargaining power, suppressed wages, and lowered labor standards. These outcomes are linked to clear policy choices, and lawmakers at every level of government have the tools they need to restore workers’ union rights, strengthen labor standards, and lift wages. Across the U.S., 56 million workers say they want a union in their workplace, yet only 10% of all workers have one (Shierholz et al. 2026). Current federal and state labor laws—including anti-union RTW laws—place too many obstacles in workers’ path to unionizing and give employers too much power to interfere with workers’ free choice.

First and foremost, states with RTW laws should follow Michigan’s recent lead and repeal them. Repealing state RTW laws will enable workers to unionize and raise wages across the country. Indeed, recent EPI research finds that equalizing collective bargaining rights across all states by repealing RTW laws that affect private employees and ensuring collective bargaining rights for public employees would increase national union density by almost 50% (from 9.9 to 14.4%) (Shierholz et al. 2026). States should also consider passing constitutional amendments that affirm collective bargaining rights and explicitly bar RTW-style restrictions, such as the 2022 Workers’ Rights Amendment in Illinois (Sherer 2026).

At the federal level, lawmakers should pass the Protecting the Right to Organize (PRO) Act. The PRO Act is designed to address major weaknesses of the National Labor Relations Act (NLRA), which has been severely eroded by amendments and court decisions. Among many other reforms, the PRO Act would eliminate the option for states to maintain anti-union RTW laws—restoring full bargaining rights to workers in all states as intended when the NLRA was originally passed in 1935 (McNicholas, Poydock, and Rhinehart 2021). Since its first introduction in 2019, the PRO Act has passed the House of Representatives twice with bipartisan support (Shierholz et al. 2026).

In addition to proposed PRO Act reforms that would enable newly unionized workers to pursue arbitration to achieve a first contract (if an employer fails to negotiate in good faith), federal labor law should set a minimum standard that such contracts include a cost-of-living adjustment (COLA). To further expand the benefits of collective bargaining, Congress should amend the NLRA to require default collective bargaining at any firm where CEO-to-worker pay ratios exceed 100 times what a typical worker makes in their industry (as this ratio would be one proxy for whether conditions at an employer are particularly unequal) (Shierholz et al. 2026). 

Legislators at both the state and federal level should also look to the list of anti-worker laws that are typically found in RTW states for more opportunities to rebalance unequal power in the labor market and improve wages and working conditions. These policies include:

• Raising the minimum wage;
• Banning noncompete agreements;
• Strengthening federal unemployment insurance guidelines and state UI systems;
• Removing state restrictions that preempt local governments from raising wages and strengthening labor standards.

These are among just a few of the policy levers states can use to raise wages and standards (EPI 2026b).

Our analysis suggests that repealing anti-union RTW laws and enabling workers to increase unionization levels are key to raising wages, both because RTW laws directly suppress unionization rates (and unions raise wages), and because weakening unions limits workers’ collective ability to shape other public policies.

Acknowledgements

The authors are grateful to Josh Bivens, Jennifer Sherer, Hilary Wething, and Ben Zipperer for their helpful comments and expertise.

Appendix

Appendix Figure A

Appendix Table 1

Appendix Table 2

Notes

1. See Appendix Figure A for RTW status. As of 2026, these states are Alabama, Arizona, Arkansas, Florida, Georgia, Iowa, Idaho, Indiana, Kansas, Kentucky, Louisiana, Mississippi, North Carolina, North Dakota, Nebraska, Nevada, Oklahoma, South Carolina, South Dakota, Tennessee, Texas, Utah, Virginia, Wisconsin, West Virginia, and Wyoming.

2. States are categorized as “RTW” or “non-RTW” based on their status as of 2026.

3. Authors’ analysis of prevailing wage laws from DOL (2023) and state legislative websites.

4. Authors’ analysis of noncompete restriction policies from EIG (2026).

5. Authors’ analysis of minimum wage data from EPI (2026c).

6. Authors’ analysis of pay transparency laws from GovDocs (2026).

7. Authors’ analysis of UI recipiency rate data from DOL-ETA.

8. Authors’ analysis of Medicaid expansion policies from KFF (2026).

9. Authors’ analysis of uninsurance rates by state, 2023 through 2025, from Carter (2025).

10. Authors’ analysis of per-pupil education spending data from NCES-NPEFS (2024).

11. Authors’ analysis of paid family and medical leave policies from Wielk (2026).

12. Prior to 2012, the last state to change its status was Oklahoma in 2001.

13. This analysis builds on earlier work by Gould and Kimball (2015); see the report for a full description of the methodology and list of controls.

14. Interpreting the results from these semilogarithmic functions requires utilizing the exponential function on the coefficient. Specific to the binary variable coefficient (β1) for RTW, the percent change in workers’ wages resulting from a state being RTW can be calculated by the formula: 100*[exp(β1)-1]. Typically, the result of this equation will be very close to the coefficient itself but will differ more as the coefficient becomes larger. We show the coefficient in the first row of Table 1 and the exponentiated result as a percent in the third row.

15. Full regression results for covariates in all three models can be found in Appendix Table 2.

16. Because the 2025 BEA RPP data were not yet available at the time of publication, we assign an average of 2022–2024 data to all years in our sample (2023–2025).

17. Gould and Kimball (2015) classify Indiana as non-RTW as its RTW law had just taken effect.

18. We do not control for state-level fixed effects, as Douglas (2024) suggested, because state-level fixed effects perfectly correlate with RTW status and would deem our results uninterpretable.

References

Bureau of Economic Analysis, Regional Price Parities by State and Metro Area: All items (BEA-RPP). Various years [Release date: February 19, 2026]. Public data series accessed via the Regional Data interactive tool. Accessed August 1, 2026. 

Carter, Caitlin. 2025. “Health Insurance Coverage by State: 2023 and 2024.” U.S. Census Bureau, September 11, 2025. 

Childers, Chandra. 2024. The Evolution of the Southern Economic Development Strategy: Rooted in Racism and Economic Exploitation: Part One. Economic Policy Institute, May 2024. 

Dahl, B. Gordon, and Matthew Knepper. 2026. “Unemployment Insurance, Starting Salaries, and Jobs: Evidence from Multi-state Firms.” The Review of Economic Studies, rdag056. https://doi.org/10.1093/restud/rdag056.

Dasgupta, Kabir, and Zofsha Merchant. 2023. “Understanding Workers’ Financial Wellbeing in States with Right-to-Work Laws.” FEDS Notes (The Federal Reserve), September 8, 2023.

Department of Labor (DOL). 2023. “Dollar Threshold Amount for Contract Coverage Under State Prevailing Wage Laws.” Last modified January 1, 2023. 

Department of Labor, Employment and Training Administration (DOL-ETA). Various years. Unemployment Insurance Chartbook. Public data series accessed via the interactive tool. Accessed August 6, 2026. 

Douglas, Christopher C. 2024. Right-to-Work States Do Not Have Lower Wages. Mackinac Center, December 2024. 

Economic Innovation Group (EIG). 2026. “State Noncompete Law Tracker.” Last modified March 24, 2026. 

Economic Policy Institute (EPI). 2025. “Workers’ Rights Preemption in the U.S.” Last modified February 2025. 

Economic Policy Institute (EPI). 2026a. Current Population Survey Extracts, Version 2026.7.8, https://microdata.epi.org.

Economic Policy Institute (EPI). 2026b. Holding the Line: State solutions to the U.S. Worker Rights Crisis.

Economic Policy Institute (EPI). 2026c. “Minimum Wage Tracker.” Last Modified July 1, 2026. 

Fortin, Nicole, Thomas Lemieux, and Neil Lloyd. 2022. “Right-to-Work Laws, Unionization, and Wage Setting.” National Bureau of Economic Research Working Paper no. 30098, June 2022. http://www.nber.org/papers/w30098. 

Glynn, Sarah Jane. 2020. “The Rising Cost of Inaction on Work-Family Policies.” Center for American Progress, January 21, 2020.

Gould, Elise, and Will Kimball. 2015. “Right-to-Work” States Still Have Lower Wages. Economic Policy Institute, April 2015.

Gould, Elise, and Heidi Shierholz. 2011. The Compensation Penalty of “Right-to-Work” Laws. Economic Policy Institute, February 2011. 

GovDocs. 2026. “Pay Transparency Laws by State and Province.” Last modified July 2026.

Hertel-Fernandez, Alexander, and Alix Gould-Werth. 2020. Labor Organizations and Unemployment Insurance: A Virtuous Circle Supporting U.S. Workers’ Voices and Reducing Disparities in Benefits. Washington Center for Equitable Growth, October 2020.

Jackson, C. Kirabo, Rucker C. Johnson, and Claudia Persico. 2016. “The Effects of School Spending on Educational and Economic Outcomes: Evidence from School Finance Reforms.” The Quarterly Journal of Economics 131, no. 1: 157–218. https://doi.org/10.1093/qje/qjv036.

KFF. 2026. “Status of State Medicaid Expansion Decisions.” Last modified May 21, 2026. 

McNicholas, Celine, Margaret Poydock, and Lynn Rhinehart. 2021. “How the PRO Act restores workers’ right to unionize” (fact sheet). Economic Policy Institute, February 4, 2021. 

McNicholas, Celine, Margaret Poydock, Heidi Shierholz, and Hilary Wething. 2025. Unions Aren’t Just Good for Workers—They Also Benefit Communities and Democracy. Economic Policy Institute, August 2025.

National Center for Education Statistics, National Public Education Financial Survey (NCES-NPEFS). 2024. Public data series accessed via the Common Core of Data database. Accessed July 1, 2026. 

Rinz, Kevin, and David Wasser. 2026. “Unemployment Insurance Generosity and Wage Determination.” Federal Reserve Bank of Cleveland Working Paper no. 26-11, May 2026. https://doi.org/10.26509/frbc-wp-202611.

Shedge, Nirav. 2025. Pay Transparency Laws and Wage Dynamics: Evidence from Colorado. Social Science Research Network, November 2025. 

Sherer, Jennifer. 2026. Rights to Unionize and Collectively Bargain: State Solutions to the U.S. Workers Rights Crisis. Economic Policy Institute, February 2026.

Sherer, Jennifer, Emma Cohn, and Ruby Ahdoot. 2025. “Updated EPI Tracker Shows More States Obstructing Progress on Workers’ Rights: Harmful Preemption Laws are Increasing Inequality and Repressing Democracy.” Working Economics Blog (Economic Policy Institute), March 6, 2025.

Sherer, Jennifer, Nina Mast, Elise Gould, and Emma Cohn. 2026. Everything You Need to Know About Anti-Union “Right-to-Work” Laws. Economic Policy Institute, forthcoming 2026.

Shierholz, Heidi. 2024. “Banning Noncompete Agreements.” Testimony before the U.S. Senate Banking, Housing, and Urban Affairs Subcommittee on Economic Policy, July 30, 2024. 

Shierholz, Heidi, Celine McNicholas, Josh Bivens, Jennifer Sherer, Ben Zipperer, and Margaret Poydock. 2026. The Case for Tripling Union Membership: How Rebuilding Union Power Would Strengthen Workers, the Economy, and Our Democracy. Economic Policy Institute, July 2026. 

Starr, Evan. 2019. “Consider This: Training, Wages and the Enforceability of Covenants Not to Compete.” ILR Review 72, no. 4 (August): 783–817. https://doi.org/10.1177/0019793919826060.

Wielk, Emily. 2026. “State Paid Family Leave Laws Across the U.S.” Bipartisan Policy Center. Last updated April 23, 2026. 

Zipperer, Ben. 2026. Setting High Standards for a Federal Minimum Wage. Economic Policy Institute, May 2026. 

Key takeaways

• The label “right to work” is intentionally misleading. RTW laws provide no job protections. What they do is make it harder for workers to form and sustain strong unions.
• RTW laws are intended to weaken unions. They are linked to lower unionization rates, lower wages and benefits, and worse safety outcomes for all workers.
• RTW laws have racist, anti-union origins dating to the 1940s. For decades, big business and white supremacist groups promoted RTW laws to diminish workers’ collective bargaining rights and block multiracial organizing.
• RTW laws don’t boost job growth but do erode job quality and increase inequality.
• Trends on RTW are reversing. No state has adopted a new RTW law since 2017, and multiple states have repealed or rejected RTW.

This report updates a two-decade body of research tracking the teacher pay penalty—the growing pay gap between public school teachers and their college-educated peers.1 Because public school teachers must attain at least a bachelor’s degree to teach in the U.S., this research compares weekly earnings of public school teachers (elementary, middle, and secondary)2 with those of college graduates who chose other careers. Documenting the widening divergence between the wages of teachers and their college-educated counterparts over time allows for a historical analysis of an issue that is critical to the future of the United States: the quality of our education. If teachers’ compensation doesn’t catch up with that of similarly educated and experienced professionals, schools will struggle to retain and attract qualified workers into the profession.

Data and relevant information

In analyzing differences in pay between public school teachers and other college graduates, I use two sources of data, both from the Bureau of Labor Statistics (BLS).3 First, I use Current Population Survey Outgoing Rotation Groups (CPS-ORG) data for the weekly wage analyses (BLS 2025a). I focus on weekly wages, rather than weekly hours worked or the length of the work year, to account for the “summers off” issue that affects teachers but not other college graduates.4 The sample is restricted to full-time workers (working at least 35 hours per week) aged between 18 and 64, with at least a bachelor’s degree, since teachers today need at least a bachelor’s degree to teach. Note that the 2025 annual data do not include October due to the U.S. federal government shutdown.

The sample is further limited to those who reported their wage information directly (those who didn’t respond and whose wages were estimated by BLS are excluded).5 To preserve data confidentiality, the BLS records weekly wages only up to a defined threshold, so the wage amounts above this threshold aren’t specifically identifiable in the data. This is called top-coding. Historically, the threshold was rarely updated. As a result, a growing share of workers are assigned top-coded wages that are below their actual wages, which has generated a growing understatement of college graduate wages relative to those of teachers. EPI replaces original top-coded values with Pareto-distribution implied means above the original CPS top-code separately for men and women.6 CPS demographic variables (e.g., gender, race/ethnicity, state of residence, marital status, age) are also used for the regression analyses.

The BLS’s National Compensation Survey’s Employer Costs for Employee Compensation program (BLS 2025b) is the second data source. Specifically, I pull data on employer costs per hour worked for detailed categories of compensation for “primary, secondary, and special education school teachers” in the public sector, and the same data for “civilian professionals,” which is the broadest category available that largely corresponds to college graduates. “Benefits,” in this analysis, refer to employer costs for health and life insurance, retirement plans, and payroll taxes (covering Social Security, unemployment insurance, and workers’ compensation).

The remaining components of compensation are “W-2 wages,” a measure that corresponds to the wages captured in the CPS data used above. W-2 wages are the wages reported to employees and to the Internal Revenue Service. They include “direct wages,” defined by the BLS as “regular payments from the employer to the employee as compensation for straight-time hourly work, or for any salaried work performed,” and other wage items, including “supplemental pay.” Supplemental pay includes premium pay for overtime, bonus pay, profit-sharing, and paid leave.

Findings

I present the results of this research in four sections. First, I examine trends in the simple (i.e., not regression-adjusted, but adjusted for inflation) average weekly wages for public school teachers and other college graduates from 1979 through 2025. Second, I report annual estimates of the relative national teacher weekly wage gap. The relative gap is estimated using standard regression techniques to control for systematic differences in age, education, state of residence, and other factors known to affect wage rates. Third, I analyze the regression-adjusted estimates of the teacher wage gap for each state and the District of Columbia. Lastly, I factor in nonwage benefits to estimate a total compensation penalty that accounts for the estimated teacher wage penalty, along with the teacher “benefits advantage”—teachers’ relatively larger share of compensation coming from benefits, like health insurance or retirement plans. I use these figures to estimate a total compensation differential at the national level (which is not possible to calculate for each state).

Simple level differences: Weekly wage trends

The average weekly wages of public school teachers and other college graduates are shown in Figure A. These data are national annual averages adjusted only for inflation (i.e., not regression-adjusted). It is important to keep in mind that real improvements in living standards require wages to outpace inflation, which has not been the case for teachers—but has for other college graduates. 

Figure A

Figure A shows that the inflation-adjusted average weekly wages for teachers were relatively flat from 1996 through 2021, indicating that teacher wages, on average, were just keeping up with the rate of inflation. By 2025, teacher wages were 6.2% less than they were on average in 1996. The average weekly wages of other college graduates also experienced a stretch of stagnation, but for a shorter time span (2002–2014), after which real increases ensued. Since 1996, the wages of other college graduates increased by 28.8%.

Illustrated in Figure A is a noteworthy fall in teacher wages that occurred in 2022 due to high rates of inflation. A similar decline did not occur in the wages of other college graduates as private-sector wages can be more responsive to economic conditions, whereas that is not possible with public-sector teacher pay. At the time, I posited that a new, lower trend in teacher wages would likely occur post-2022. History has shown that teacher pay has barely kept up with moderate rates of inflation—as indicated by the flat trend in Figure A—and pay increases following 2022 seemed unlikely to be large enough to recoup that significant decline. Thus far, they have not.

Addressing the long-term stagnation of teacher wages requires that future increases in pay meet and exceed rates of inflation in the future to recover the decline in wages since 2021, and to drive an increasing trend in teacher wages to close the gap relative to other college graduates.

Relative differences: Regression-adjusted trends

The discussion of weekly wages shown in Figure A is centered around simple averages—meaning, they are not adjusted for fundamental differences that may exist between the samples of teachers and other college graduates. In this section, I move to regression adjusted estimation, which helps to account for ways the two groups may differ fundamentally on factors that typically affect pay—such as age, educational attainment, race/ethnicity, and state of residence. For instance, all else being equal, one would expect experienced workers to earn more than younger workers who are just starting out in their careers. Controlling for age within a regression model accounts for such differences across the two samples. Thus, I employ standard regression techniques to estimate weekly wages of public school teachers relative to other similarly situated college graduates working in other professions, which can provide a more apples-to-apples comparison of earnings.7

Figure B reports regression-based results that show how much less (or more) teachers earn in weekly wages relative to other college graduates. A weekly wage “penalty” for teachers is reported when the regression estimates suggest that teachers, all else equal, are paid less than other college graduates. Teachers’ weekly wage penalties are reported as negative numbers in Figure B. When teachers are paid relatively more, the reported gap is positive and is referred to as a “premium.” The regression analysis provides estimates for all teachers (which includes a gender control), as well as separately for women and men. 

Figure B

The historical trends in relative teacher pay are depicted in Figure B. The overall trend represents three decades of teacher wages faring ever more poorly compared with other similarly qualified professionals. In the pre-1994 period, the teacher wage gap averaged 8.7%, but the relative gap worsened considerably starting in the mid-1990s. The teaching penalty hit a record of 26.9% in 2024, before slightly improving to an estimated 25.2% in 2025. However, this slight improvement is unlikely to be sustained, given that similar improvements throughout this long series have historically proven temporary.

In sum, teachers earned on average 74.8 cents on the dollar in 2025 compared with what similar college graduates earned working in other professions—much less than the relative 93.9 cents on the dollar that teachers earned in 1996.

Separating the analysis by gender shows that in the period from 1979 through 1993, the relative female teacher weekly wage (i.e., comparing female teachers with other female college graduates) was at a premium that averaged 3.3%. But starting in 1996, the female teacher wage gap quickly went from a small premium to an ever-increasing penalty—landing at a 20.0% penalty in 2025.

My previous research (using decennial Census data) confirmed that, over a longer timeframe, the relative wage estimates for female teachers moved from significant premiums to large penalties. For example, I documented that relative female teacher earnings were at a 14.7% premium in 1960, which lessened to 10.4% in 1970 and to near parity in 1980 (pre-1979 years not shown in Figure B). Using the estimates from 2025, the cumulative change has been a 34.7 percentage-point deterioration in the relative wage of female teachers since 1960.8

There is an important story behind the declining relative wages experienced by female teachers. Historically, the teaching profession relied on a somewhat captive labor pool of educated women who had few employment opportunities. This is thankfully no longer the case, but increased opportunity costs are a part of the story, and they are reflected in these results. Expanding opportunities for women enabled them to earn more as they entered occupations and professions from which they were once barred.

The wages of male teachers have long been outpaced by those garnered by male college graduates who chose other professions. My previously documented estimates going back to 1960 have never been even close to parity. But similar to their female counterparts, the relative male teacher penalty grew considerably over time—from 20.5% in 1960 to 34.5% in 2025.9

The historically large and worsening male teacher penalty partly explains why about 3 in 4 teachers today are women—a ratio that has not changed much since 1960. The pay penalty experienced by male teachers is unfortunate given the recent statistics and reporting of boys struggling in school. Performing poorly in school is associated with problems encountered later in life—including addiction, mental and physical health issues, and involvement with the criminal justice system.10 Further, Thomas Dee (2010) found that a teacher’s gender has large effects on student test performance, teacher perceptions of students, and students’ engagement with academic material.

It shouldn’t be surprising, then, that today a much smaller share of college-educated women choose the teaching profession over expanding opportunities with better pay—even as three-quarters of teachers are women. Moreover, the very large, persisting male teaching penalty goes a long way in explaining why men who may want to teach are compelled to choose other career paths, which are on average much more lucrative.

Relative teacher weekly wage penalties by state

To this point, I have reported the relative teacher wage gaps for the country as a whole, but there is a lot of state-by-state variation. To produce regression estimates by state, I pool six years (2020–2025) of CPS data to assure ample sample sizes for each state. Again, I compare public school teachers with nonteacher college graduates within each state and estimate regression-adjusted weekly wage gaps for each state and the District of Columbia.

Figure C

As in previous reports, Figure C shows that in no state does the relative (i.e., regression-adjusted) weekly wage for teachers equal or surpass that of their nonteaching college graduate counterparts. The results in Figure C are sorted from the largest (40.7%) to the smallest (10.4%) penalties across the U.S.

The teaching penalty was at least 25% in 25 states, and at least 30% in 11 states. Colorado’s 40.7% teacher penalty is the first time in this research series that a penalty was estimated at or above 40%; on average, teachers in Colorado earned 59.3 cents on the dollar compared with similar college graduates in 2025.

The map in Figure D illustrates the state penalties reported in Figure C.

Figure D

Adding benefits to the analysis

This section adds a nationwide analysis of benefits to see how they affect total compensation between teachers and other college graduates. Teachers are thought to have a “benefits advantage,” which refers to the understanding that, on average in the U.S., teachers generally receive a larger share of their total compensation in benefits—such as health insurance, other insurance, and retirement plans—compared with employment benefits received by other professionals.

Keep in mind that a larger share of total compensation via benefits means a smaller wage share, given that total compensation is made up of these two components. Here, I calculate how the relatively more generous benefits package for teachers partially offsets the large teacher wage penalty.

The BLS Employer Costs for Employee Compensation (ECEC) series measures the average employer cost per employee hour worked for total compensation, wages and salaries, benefits, and costs as a share of total compensation. I compare benefits packages of primary, secondary, and special education public school teachers with those of comparable workers (specifically, workers in professional occupations).11 Table 1 shows a summary of my calculations.

Table 1

The first two columns in Table 1 under “W-2 wage share of compensation” report the share of W-2 wages that make up total compensation for professionals in all occupations and for state and local K–12 public school teachers. The shares of compensation for W-2 wages and benefits add up to 100. The W-2 shares allow for an examination of how important wages are relative to benefits in the total compensation package.

In 2025, W-2 wages made up 69.4% of teachers’ total compensation, while the share was 79.3% for nonteaching professionals. That means that for every dollar of teachers’ total compensation, 69.4 cents went to wages, and 30.6 cents went to benefits. For professionals, 79.3 cents went to wages, and 20.7 cents went to benefits. Therefore, for every dollar of total compensation, public school teachers receive more in benefits than other professionals, but less in wages. I refer to this as the “benefits advantage.”12

The right-side columns in Table 1 provide the information needed to assess total compensation on average for the United States from the “public school teachers” vantage point. The “wage penalty” column reports the teacher wage penalty estimates from Figure B, followed by the benefits advantage calculation for teachers. Combining the two gives us a measure of how teachers compare with other professionals on total compensation, which is reported in the last column. Per usual, the benefits advantage for teachers partially offsets their estimated relative wage disadvantage, but teachers are still left with a significant total compensation gap of 14.5% in 2025—down somewhat from 16.7% in 2024. This slight change was due to a 0.5 percentage point relative increase in the teacher benefits advantage, and a 1.7 percentage point decrease in the relative teacher wage penalty.

As reported in Table 1, the teacher total compensation gap over the last decade has varied in a rather narrow range from 10.2% in 2019 to a high of 17.0% in 2022. Generally, over the long run, the teacher wage penalty has been worsening as the teacher benefits advantage has grown larger—albeit at a slower rate than the wage penalty. Of course, even if the teacher benefits advantage exceeded the large teacher wage penalty, the standard of living for teachers would likely fall as they would have little in the way of earnings to make ends meet.

How much further can teacher pay fall behind?

Teaching is one of the most consequential professions—not just for kids and their families, but for the country as a whole. Educating each and every child, regardless of means, is among our highest ideals as a country, and the future of the U.S. economy depends on it. The highest standard is still worth fighting for, even as we have always fallen short of the ideal.13

Given the critical role that teachers have on student outcomes (Chetty, Friedman, and Rockoff 2014), I have been updating this series on teacher pay for over 20 years. After Larry Mishel, Sean Corcoran, and I wrote two books on the subject in 2004 and 2008, it was not obvious that the trends we depicted would continue to get worse—but overall, they have.

The nearly 50-year trends documented in this paper have no doubt already taken a serious toll on the teaching profession. That toll shows up in teacher retention, recruitment, and staffing (Fortin and Fawcett 2023; NCES 2023); college students forgoing teaching careers citing pay as a main barrier (Croft, Guffy, and Vitale 2018); parents actively steering their children into professions that pay better than teaching (PDK 2019); fast-tracking credentials in response to permanent teacher shortages (Povich 2023); the heavy use of unqualified teachers (Tamez-Robledo 2023; Lopez and Van Overschelde 2024); and the reliance on unqualified substitute teachers (Franco and Kemper Patrick 2023).

I have long asserted that providing teachers a standard of living commensurate with that of similar nonteacher professionals is not simply a matter of fairness—teacher pay is a central issue in public education, and thus a matter of national consequence. The quality of a public education hinges on our willingness to fairly and sufficiently invest in both schools and teachers, including the full public school workforce, its infrastructure, and essential wrap-around services (Wething and Bivens 2025).

It would be willful blindness to ignore the toll that the decades-long teacher pay penalty has had on the quality of public education. Regrettably, policymakers have failed to deliver sustained and effective interventions capable of mitigating—let alone substantially improving—the trends outlined in this long-running series. This is an unfortunate reality, especially in a country as wealthy as the United States, with more than enough resources for its public schools to be the envy of the world.

Notes

1. See Allegretto, Corcoran, and Mishel 2004, 2008; Allegretto and Tojerow 2014; Allegretto and Mishel 2016, 2018, 2019; and Allegretto 2023 and 2024.

2. The teacher sample does not include kindergarten or pre-kindergarten; if included, the teacher pay penalties would be even larger. 

3. Allegretto and Mishel 2019, Appendix A provides a comprehensive discussion of the data and methodologies that were used to produce our teacher weekly wage and total compensation estimates. 

4. In Allegretto and Mishel 2019, we provide evidence that teachers work weekly hours similar to those of other professionals.

5. Our earlier work documents that BLS’s imputation method overstates teacher earnings, which is not the case for the other college graduate sample (Allegretto, Corcoran, and Mishel 2008, 9).

6. For more about top-code adjustments, see Economic Policy Institute 2026b.

7. The wage model includes controls for both public and private school teachers. The weekly wage penalty estimates are based on the coefficient on the public school teacher indicator. Regression for all teachers includes a gender control. The percentage gap is calculated as (eb -1) x 100. See Allegretto and Mishel 2019, Appendix A, for specification details.

8. See Allegretto, Corcoran, and Mishel 2008 for 1960, 1970, and 1980 estimates using decennial censuses.

9. The 1960 results are not shown in Figure B. They can be found in Allegretto, Corcoran, and Mishel 2008, 7.

10. See Abrams 2023.

11. The ECEC provides compensation data for a narrower category of “primary, secondary, and special education school teachers” and for a broader category of “teachers.” I analyze the narrower category, which closely matches the definition of teachers in the CPS-ORG data, using data limited to state and local public-sector workers. The inclusion of kindergarten and special education teachers in the benefits analysis does not produce any more substantial differences than if they were excluded (as they are in the CPS sample used to estimate the wage penalty). Greater methodological detail is provided in Appendix A of Allegretto and Mishel 2019.

12. My analysis accounts for differences in annual weeks worked, as it is based on the usual weekly wages of teachers and other college graduates, not hourly wages or annual earnings. One reason health and pension costs are higher for teachers is that teacher health benefits are provided for a full year, while teacher salaries are for less than a full year.

13. See Allegretto, Garcia, and Weiss 2022. This paper describes inequities in public education funding. We also argue that the federal government should play a larger role in funding public education.

References

Abrams, Zara. 2023. Boys Are Facing Key Challenges in School. Inside the Effort to Support Their Success. American Psychological Association, April 2023.

Allegretto, Sylvia A., Sean P. Corcoran, and Lawrence Mishel. 2004. How Does Teacher Pay Compare? Methodological Challenges and Answers. Washington, D.C.: Economic Policy Institute.

Allegretto, Sylvia A., Sean P. Corcoran, and Lawrence Mishel. 2008. The Teaching Penalty: Teacher Pay Losing Ground. Washington, D.C.: Economic Policy Institute.

Allegretto, Sylvia A., Emma García, and Elaine Weiss. 2022. Public Education Funding in the U.S. Needs an Overhaul: How a Larger Federal Role Would Boost Equity and Shield Children from Disinvestment During Downturns. Economic Policy Institute, July 2022.

Allegretto, Sylvia A., and Lawrence Mishel. 2019. The Teacher Weekly Wage Penalty Hit 21.4 Percent in 2018, a Record High. Economic Policy Institute, April 2019.

Allegretto, Sylvia A., and Ilan Tojerow. 2014. Teacher Staffing and Pay Differences: Public and Private Schools. Monthly Labor Review. U.S. Department of Labor, Bureau of Labor Statistics, September 2014.

Blad, Evie. 2024. Teachers Report Lower Pay, More Stress Than Workers in Other Fields. Education Week, June 19, 2024, sec. Teaching & Learning, Teaching Profession.

Bureau of Labor Statistics (BLS). 2025a. Current Population Survey.

Bureau of Labor Statistics (BLS). 2025b. Employer Costs for Employee Compensation Historical Listing: National Compensation Survey, data tables. Accessed July 12, 2026.

Chetty, Raj, John N. Friedman, and Jonah E. Rockoff. 2014. Measuring the Impacts of Teachers II: Teacher Value-Added and Student Outcomes in Adulthood. American Economic Review 104, no. 9 (September 2014): 2633–2679.

Croft, Michelle, Gretchen Guffy, and Dan Vitale. 2018. Encouraging More High School Students to Consider Teaching. ACT Research & Policy, June 2018.

Dee, Thomas S. 2010 The Why Chromosome. Education Next, January 26, 2010.

Economic Policy Institute (EPI). 2026a. Current Population Survey Extracts, Version 2026.7.8, https://microdata.epi.org. Accessed July 6, 2026.

Economic Policy Institute (EPI). 2026b. “Methodology: Wage Variables.” EPI Microdata Extracts documentation.

Fortin, Jacey, and Eliza Fawcett. 2023. How Bad Is the Teacher Shortage? Depends Where You Live. New York Times, August 29, 2023.

Franco, Marguerite, and Susan Kemper Patrick. 2023. State Teacher Shortages: Teaching Positions Left Vacant or Filled by Teachers Without Full Certification. Learning Policy Institute, July 2023.

Lopez, Minda, and James P. Van Overschelde. 2024. Unlicensed Teachers Now Dominate New Teacher Hires in Rural Texas Schools. The Dallas Observer, June 20, 2024.

Merod, Anna. 2023. Low Pay, Long Hours Top Reasons Teachers Consider Leaving. K-12 Dive, September 12, 2023.

National Center for Education Statistics (NCES). 2023. Most Public Schools Face Challenges in Hiring Teachers and Other Personnel Entering the 2023-24 Academic Year. October 2023.

Phi Delta Kappan (PDK). 2018. Teaching: Respect but Dwindling Appeal. The 50th Annual PDK Poll of the Public’s Attitudes Toward the Public Schools. Supplement to Kappan magazine.

Povich, Elaine S. 2023. Plagued By Teacher Shortages, Some States Turn to Fast-Track Credentialing. Stateline, July 24, 2023.

Steiner, Elizabeth D., Ashley Woo, and Sy Doan. 2023. All Work and No Pay — Teachers’ Perceptions of Their Pay and Hours Worked: Findings from the 2023 State of the American Teacher Survey. RAND Corporation, September 12, 2023.

Tamez-Robledo, Nadia. 2023. These States Have the Most ‘Underqualified’ Teachers Stepping in to Fill Open Positions. EdSurge, April 4, 2023.

Wething, Hilary and Josh Bivens. 2025. U.S. Investment in Public Education is at Risk: Vouchers, State Budget Austerity, and Federal Attacks on the Department of Education Threaten Children’s Futures. Economic Policy Institute, August 2025. 

Raymond Windmiller, Executive Officer
Executive Secretariat
U.S. Equal Employment Opportunity Commission
131 M Street, NE
Washington, DC 20507

Re: Proposed Rule for Removal of Reporting Requirements (RIN 3046-AB37)

Dear Commissioners,

I write to submit this comment on behalf of the Economic Policy Institute (EPI), responding to the Equal Employment Opportunity Commission’s proposed rule to rescind and remove the requirements for filing the EEO-1, EEO-2, EEO-3, EEO-4, EEO-5, and EEO-6 reports1, and the recordkeeping and record preservation requirements related to these reports, under 29 CFR part 1602.

EPI is a nonprofit, nonpartisan think tank created in 1986 to include the needs of low- and middle-income workers in economic policy discussions. EPI conducts research and analysis on the economic status of working America, proposes public policies that protect and improve the economic conditions of low- and middle-income workers, and assesses policies with respect to how well they further those goals. For 18 years, EPI’s Program on Race, Ethnicity and the Economy (PREE) has been a nationally recognized source for expert analysis of the many ways that race, ethnicity, gender, class and policy decisions intersect to affect economic outcomes.

We strongly oppose the EEOC’s proposal to rescind the EEO reporting, recordkeeping and record preservation requirements. If implemented, this rule would undermine the Commission’s capacity to enforce federal laws against employment discrimination. Furthermore, this rule would deprive employers, researchers, policymakers and advocates of their ability to independently analyze and use this unique data source to develop and advocate for policies that support the EEOC’s mission of ending workplace discrimination.

The U.S. Equal Employment Opportunity Commission (EEOC) is a cornerstone in upholding the civil rights of U.S. workers. Established under the same law that officially prohibited employment discrimination (Title VII of the Civil Rights Act of 1964), the EEOC embodies the fact that effective federal laws against employment discrimination require consistent enforcement. For the last 60 years, EEO reports have been central to the agency’s capacity to enforce the law and to monitor and track the nation’s progress toward ending workplace discrimination.

That goal is still a work in progress, as documented in an extensive body of methodologically rigorous research by economists, sociologists and other social scientists. In what follows, we explain why the Commission’s proposal to rescind all EEO data collection would be counterproductive to reaching that goal and detrimental to the U.S. economy by:

• Summarizing the research on labor market discrimination that justifies the ongoing need for EEO reporting requirements;
• Describing how broad EEO reporting requirements help to rebalance power and information asymmetries between employers and employees; and
• Presenting estimates of how much discrimination costs the U.S. economy in economic output and average living standards.

Research and national data provide compelling evidence of persistent labor market discrimination against “minorities”

In their proposed rule, the Commission claims that EEO Reports “may encourage employers to discriminate against employees who are not considered ‘minorities,’ may promote racial stereotyping, and may encourage employers to engage in discrimination to avoid potential EEOC enforcement actions or to address perceived inequitable outcomes.” In addition to this being highly speculative, it is also inconsistent with what we know from research and national statistics. Large and persistent disparities in employment and pay of Black workers relative to white workers are among the most durable features of the U.S. labor market. Compelling empirical evidence points to discrimination as a significant factor in the persistence of those disparities.

EPI’s detailed expert analysis of Bureau of Labor Statistics (BLS) data shows that the significant racial disparities in unemployment that are observed at each level of education, across age cohorts, and among both men and women strongly suggest that education or skills differentials alone can’t account for the near constant 2-to-1 Black-white unemployment gap2.

These findings are consistent with field experiments revealing that Black job applicants with equivalent, and sometimes superior, credentials to white applicants are less likely to receive job callbacks3. One of the starkest audit study findings in this regard concludes that employers treated white applicants with criminal records more favorably than Black applicants without criminal records4. Researchers also found that when résumés of Black and Asian job applicants were stripped of clues of their racial identity, they received callbacks at a much higher rate than those that clearly indicated an applicant’s racial identity5.

While audit and correspondence studies have been criticized for not adequately capturing unobserved characteristics that might influence hiring decisions, newer studies have shown how robust these findings can be to such considerations6. In fact, subsequent field experiments reveal a pattern of hiring discrimination experienced by Black and Hispanic job seekers that remained remarkably constant over time, with white applicants receiving 36% more callbacks than Black applicants and 24% more callbacks than Hispanic applicants7.

EPI’s analysis has also shown that since 1979, less than half of the observed black-white difference in average hourly wages can be explained by differences in education, experience, or region—the main factors presumed to determine pay – and discrimination has consistently played a major role8. However, changes in this racial wage gap track closely with changes in policy, including civil rights enforcement, and with structural factors that affect wage inequality. According to trend analysis research, the narrowing of the gap from the late 1960s through the 1970s can be attributed to the passage of important civil rights legislation9, combined with the 1960s economic boom, active enforcement of anti-discrimination10 and affirmative action policy11, and the narrowing of the educational attainment gap between Black and white workers12. On the other hand, retrenchment on anti-discrimination policy was found to be a significant factor in the widening of the gap during the 1980s13. Since 2000, research has shown a troubling trend of larger discriminatory differentials among the more highly educated14.

Contrary to the Commission’s proposed justification for ending EEO reporting requirements, the research literature cited above offers no evidence of systemic discrimination “against employees who are not considered minorities”. The research, however, underscores the need for ongoing monitoring of employment and pay discrimination through the collection of EEO data.

Elimination of EEO data would worsen power and information asymmetries that undermine worker protections

In an essay published under EPI’s Unequal Power project, former EEOC Chair Jenny Yang explains that “in a system that places the primary responsibility for enforcing anti-discrimination laws on individual workers, who must file complaints with their employer or a government agency, the government plays a fundamental role in rebalancing the power disparities between workers and employers.”15 She further concludes that “policies that encourage employer transparency and require data collection to support prevention and accountability are essential to addressing the inherent information asymmetry workers face.”16

EEO data helps to provide the necessary transparency and accountability across major segments of the U.S. labor market, including private employers with 100 or more employees and federal contractors with 50 or more employees (EEO-1), apprenticeship programs (EEO-2), labor unions (EEO-3), state and local governments (EEO-4), elementary and secondary schools (EEO-5) and institutions of higher education (EEO-6)17.

While the Commission now argues that reporting requirements are too broad because they include non-discriminating employers along with those accused of discrimination, that feature is actually a strength of EEO data. As the nation’s only federally collected source of firm-level information on employment by race, ethnicity, sex, and job category, the EEO-1 provides EEOC investigators with the information they need to assess each individual claim within the context of a larger group of employers.

In addition to being used in this important first step of the charge intake process, these data can also identify potential patterns of systemic discrimination within an industry, occupation, or worksite location. This information helps to direct EEOC systemic enforcement and commissioner’s charges, enabling the EEOC to investigate and address discriminatory practices in cases where workers either lack information or fear retaliation for filing an individual charge of discrimination. Many state and local government Fair Employment Practices Agencies (FEPAs) also have data sharing agreements with EEOC, allowing them to utilize EEO data for local enforcement activities. Similar data collections are too costly for most FEPAs to undertake on their own. As such, EEO data address information and power asymmetries that make it difficult and costly for workers to identify and prove discrimination.

Elimination of EEO data would limit EEOC’s ability to support economic growth through reduced discrimination

Finally, the Commission claims that elimination of the EEO surveys is consistent with the policy underlying E.O. 14192, “Unleashing Prosperity Through Deregulation,” requiring agencies to be “prudent and financially responsible in the expenditure of funds . . . to alleviate unnecessary regulatory burdens placed on the American people.” However, the Commission is overlooking the cost discrimination imposes on the economy and the long-term consequences ending EEO data collection would have on the EEOC’s ability to reduce discrimination through the enforcement mechanisms described above.

Research shows that since the 1960s, the decline in workplace discrimination has contributed to a stronger economy and more inclusive labor force. A widely cited 2019 report concludes that reduced discrimination alone accounted for almost 8% of GDP per capita growth between 1960 and 201018. Extrapolating this estimate through 2024 and applying it to published national estimates of real GDP per capita, we estimate that reduced discrimination boosted average living standards by $4,932 per person since 196019. While it is difficult to precisely measure the EEOC’s impact apart from other forces, assuming the Commission’s role in reducing discrimination accounts for 10–25% of that growth, we estimate that EEOC enforcement, aided by EEO data, helped to boost average living standards by $493 to $1,233 per person since 1960. This estimated increase in average living standards applies to all people, not just those with proven claims of discrimination. Elimination of EEO data would compromise many of the EEOC’s tools for enforcing laws against employment discrimination, and as a result, undermine economic growth.

Conclusion

For years, the EEOC has been vastly under-resourced relative to the magnitude of its enforcement responsibilities, and EEO data is essential to directing those limited resources. Changes to the categories and definitions used in EEO forms over time represent the ways in which Commissioners have grappled with how to accurately capture individual markers of identity useful in detecting unfair influence over employment opportunities for members of legally protected classes.

Under prior administrations, EEOC has convened expert panels to evaluate EEO data collections. These panels were comprised of statisticians, economists, sociologists, legal scholars, and other practitioners with decades of expertise in statistical analysis, labor and civil rights law and the study of labor market discrimination. I have had the privilege of serving on two of these panels. In both instances, panel members expressed differing opinions with respect to data quality, what conclusions could be reliably drawn from the data, and how to best improve the data collection process. Undoubtedly, there were also likely differences in panel members’ political views, but I don’t ever recall any assertion that the problem discrimination had been sufficiently reduced to justify removal of EEO reporting requirements.

In conclusion, EPI strongly urges the Commission to withdraw its proposal to eliminate all six of the EEO surveys. Failure to do so would renege on the promise of our nation’s anti-discrimination laws for workers, their families and the economy.

Sincerely,

Valerie Wilson, PhD
Director, Program on Race, Ethnicity and the Economy
Economic Policy Institute

1. The EEO-2 remains authorized under Title VII of the Civil Rights Act of 1964 but has not been collected since 1981. In this case, our recommendation to continue the surveys is a recommendation to reinstate it.

 The EEO-6 remains authorized under Title VII but has not been collected since 1993. In this case, our recommendation to continue the surveys is a recommendation to retain this authorization and reinstate the survey to the extent that it is not superseded by the Integrated Postsecondary Education Data System (IPEDS) Staff Survey of the U.S. Department of Education.

2. Valerie Wilson and William Darity Jr., Understanding black-white disparities in labor market outcomes requires models that account for persistent discrimination and unequal bargaining power, Economic Policy Institute, March 2022.

3. Examples include: Michael Fix, George C. Galster, and Raymond J. Struyk, “An Overview of Auditing for Discrimination.” in Michael Fix and Raymond Struyk, eds., Clear and Convincing Evidence: Measurement of Discrimination in America, Urban Institute Press, 1993; Marc Bendick, Jr., Charles W. Jackson, and Victor Reinoso, “Measuring Employment Discrimination Through Controlled Experiments” in James B. Stewart, ed., African-Americans and Post-Industrial Labor Markets, Transaction Publishers, 1994; Michael Fix, George C. Galster, and Raymond J. Struyk, “An Overview of Auditing for Discrimination” in Michael Fix and Raymond Struyk, eds., Clear and Convincing Evidence: Measurement of Discrimination in America. Urban Institute Press, 1993; and Margery Turner, Michael Fix, and Raymond Struyk, Opportunities Denied, Opportunities Diminished: Racial Discrimination in Hiring, Urban Institute Press, 1991.

4. Devah Pager, “The Mark of a Criminal Record,” American Journal of Sociology 108 (March 2003): 937–75.

5. Sonia Kang, Katy DeCellesa, András Tilcsika, and Sora Jun, “Whitened Résumés: Race and Self-Presentation in the Labor Market,” Administrative Science Quarterly 61, no. 3 (March 17, 2016): 469-502.

6. David Neumark, “Detecting Discrimination in Audit and Correspondence Studies,” Journal of Human Resources 47 (Fall 2012): 1128–57. 

7. Lincoln Quillian, Devah Pager, Ole Hexel, and Arnfinn H. Midtbøen, “Meta-Analysis of Field Experiments Shows No Change in Racial Discrimination in Hiring Over Time,” Proceedings of the National Academy of Sciences 114, no. 41 (October 10, 2017): 10870-875.

8. Valerie Wilson and William Darity Jr., Understanding black-white disparities in labor market outcomes requires models that account for persistent discrimination and unequal bargaining power, Economic Policy Institute, March 2022.

9. Examples include: John Bound and Richard Freeman, “Black Economic Progress: Erosion of the Post-1965 Gains in the 1980s?” in Steven Shulman and William Darity, Jr., eds., Question of Discrimination: Racial Inequality in the U.S. Labor Market, Wesleyan University Press, 1989; David Card and Alan Krueger, “School Quality and Black-White Relative Earnings: A Direct Assessment,” Quarterly Journal of Economics 107 (February 1992): 151–200; and John Donohue and James Heckman, “Continuous vs. Episodic Change: The Impact of Civil Rights Policy on the Economic Status of Blacks,” Journal of Economic Literature 29 (December 1991): 1603–43. 

10. Examples include: Augustin K. Fosu, “Occupational Mobility of Black Women, 1958–1981: The Impact of Post-1964 Antidiscrimination Measures,” Industrial & Labor Relations Review 45, no. 2 (1992): 281–94; and James J. Heckman and Brook Payner, “Determining the Impact of Federal Antidiscrimination Policy on the Economic Status of Blacks: A Study of South Carolina,” National Bureau of Economic Research Working Paper no. 2854, 1989. 

11. Examples include: Charles Betsey, “Litigation of Employment Discrimination Under Title VII: The Case of African American Women,” American Economic Review 84, no. 2 (1994): 98–102; and Jonathan S. Leonard, “The Impact of Affirmative Action Regulation and Equal Employment Law on Black Employment,” Journal of Economic Perspectives 4, no. 4 (1990): 47–63. 

12. Examples include: Leonard Carlson and Caroline Swartz, “The Earnings of Women and Ethnic Minorities, 1959–1979,” Industrial & Labor Relations Review 41, no. 4 (1988): 530–46; James S. Cunningham and Nadja Zalokar, “The Economic Progress of Black Women, 1940–1980: Occupational Distribution and Relative Wages,” Industrial & Labor Relations Review 45, no. 3 (1992): 540–55; and Nadja Zalokar, The Economic Status of Black Women: An Exploratory Investigation. U.S. Commission on Civil Rights, 1990.

13. Jonathan S. Leonard, “The Impact of Affirmative Action Regulation and Equal Employment Law on Black Employment,” Journal of Economic Perspectives 4, no. 4 (1990): 47–63. 

14. Examples include: Donald Tomaskovic-Devy, Melvin Thomas, and Kecia Johnson, “Race and the Accumulation of Human Capital Across the Career: A Theoretical Model and Fixed-Effects Application,” American Journal of Sociology 111, no. 1 (2005): 58–89; and Valerie Wilson and William M. Rodgers III, Black-White Wage Gaps Expand with Rising Wage Inequality, Economic Policy Institute, September 2016. 

15. Jenny R. Yang and Jane Liu, Strengthening Accountability for Discrimination: Confronting Fundamental Power Imbalances in the Employment Relationship, Economic Policy Institute, January 2021. 

16. Ibid.

17. See endnote 1.

18. Chang-Tai Hsieh, Erik Hurst, Charles I. Jones and Peter J. Klenow. “The Allocation of Talent and U.S. Economic Growth”, Econometrica, Vol. 87, No. 5 (September 2019), 1439-1474.

19. Adewale A. Maye and Valerie Wilson, Trump is Making it Easier for Employers to Discriminate. This Stifles Equity and Hurts Economic Growth. Economic Policy Institute, May 2025.

Updated August 6, 2026, to correct the teachers, firefighters, and nurses benefits percentages.

The National Priorities Project (NPP) at the Institute for Policy Studies has estimated the federal government plans to spend $268.9 billion to undertake mass deportations throughout the second Trump administration. NPP’s methodology is explained here.

The Cost of Deportations Calculator breaks down who shoulders the cost by state, county, place, and congressional district based on the area’s share of federal income taxes paid. “State” includes the District of Columbia, and “place” as used by the U.S. Census encompasses cities, towns, and smaller jurisdictions, including unincorporated areas. The calculator also estimates the average cost per taxpayer in each state, county, place, and district (it is $2,358 for U.S. taxpayers as a whole). “Taxpayers” are tax filers, including joint filers, who owe federal income tax after credits.

The calculator compares each area’s share of the cost of deportations with potential trade-offs, such as the number of teachers who could be employed over the remaining 2.5 years of the Trump administration if the money were not being spent on mass deportations. The cost of trade-offs varies by state, but cost differences by county, place, or district do not factor into estimates.

Sources and methodology for federal income tax shares

The Internal Revenue Service (IRS) Statistics of Income (SOI) program publishes tables showing the taxes paid and the number of taxpayers by state, county, congressional district, and zip code. As of July 2026, the most recent geographic tables are for 2022. These tables are used to estimate the share of federal income taxes paid, and, by extension, the share of mass deportation costs for each area.

The denominator used in tax share estimates—total federal income tax paid—is from SOI’s Individual Income Tax Returns Complete Report, 2022. This total is slightly larger than the sum of taxes paid in the 50 states and District of Columbia because it includes taxes paid by taxpayers who live overseas, serve in the military, etc. Similarly, sums for smaller geographic areas within states may be less than state totals because some taxpayers were not assigned to specific counties, places, or districts.

SOI does not publish tax information for cities and towns, only for metropolitan and micropolitan statistical areas, or MSAs. Since MSAs do not generally correspond to administrative jurisdictions, NPP has constructed tax share estimates for cities and towns (“places”) using SOI tax data by zip code. NPP apportioned zip code data to places using Geocorr crosswalks from the Missouri Census Data Center. Because zip codes can span jurisdictions, these tax shares are approximations based on how populations in these zip codes are distributed across places.

Trade-off costs

The cost of trade-offs is based on the cost of a subset of the National Priorities Project’s budget trade-offs, with minor differences described below.

When cost estimates are based on pre-2026 data, they are inflated to May 2026 dollars using the consumer price index (CPI-U). Costs are further inflated to 2027 and 2028 dollars based on the Federal Reserve Bank of Philadelphia’s Second Quarter 2026 Survey of Professional Forecasters (the projections are for CPI inflation rates of 2.4% and 2.5% in 2027 and 2028, respectively).

Compensation costs are a combination of annual mean wages from the Bureau of Labor Statistics (BLS) Occupational Employment and Wage Statistics (OEWS) and benefit costs from BLS Employer Costs for Employee Compensation (ECEC) statistics. All data are the latest available as of July 2026.

OEWS annual wages are generally not available for the intersection of state, occupation, and sector. Therefore, annual wage estimates for teachers, firefighters, and nurses include both public- and private-sector workers.

ECEC benefit costs are not available at the state level. They are available for a limited number of occupations and for public- and private-sector workers, but not every combination of sector and occupation. The calculator excludes the cost of paid leave from benefits, since this is already included in OEWS annual wage estimates.

Elementary school teachers

This is an estimate of how many additional elementary school teachers could be employed in a state, county, district, or “place” (city, town, or equivalent) over the remaining 2.5 years of the Trump administration based on the area’s share of federal taxes being spent instead on the mass deportation of immigrants.

Teachers’ annual mean wage by state in May 2025 (inflated to 2026–2028 dollars) is from BLS OEWS data for “Elementary School Teachers, Except Special Education.” Annual wages are estimated by multiplying hourly wages by 2,080 hours. Since many teachers have summers off, this may be a conservative estimate of the number of additional teachers who could be employed.

Teacher benefits are estimated at 48.1% of pay based on national ECEC data for “state and local government workers”/ “preschool, elementary, middle, secondary, and special education teachers” in 2025Q2. The dollar cost of paid leave is excluded because it is included in annual wages.

Firefighters

This is an estimate of how many additional firefighters could be employed in a state, county, district, or “place” (city, town, or equivalent) over the remaining 2.5 years of the Trump administration based on the area’s share of federal taxes being spent instead on the mass deportation of immigrants.

Firefighters’ annual mean wage by state in May 2025 (inflated to 2026–2028 dollars) is from BLS OEWS data. Firefighter benefits as a percent of pay are estimated at 50.6% based on BLS ECEC data for “state and local government workers”/ “all occupations” in 2025Q2. The dollar cost of paid leave is excluded because it is included in annual wages.

Medicaid recipients

This is an estimate of how many additional people could receive Medicaid benefits in a state, county, district, or “place” (city, town, or equivalent) over the remaining 2.5 years of the Trump administration based on the area’s share of federal taxes being spent instead on the mass deportation of immigrants.

The number of people who could receive Medicaid benefits is based on Medicaid spending, by state, for all full-benefit enrollees, analyzed by the Kaiser Family Foundation based on data from the Medicaid Statistical Information System (T-MSIS). The data year is 2023, inflated to 2026–2028 dollars.

Veterans’ medical care

This is an estimate of how many additional military veterans could receive medical care from the Department of Veterans Affairs (VA) in a state, county, district, or “place” (city, town, or equivalent) over the remaining 2.5 years of the Trump administration based on the area’s share of federal taxes being spent instead on the mass deportation of immigrants.

The average cost to provide military veterans with VA medical care is based on a state’s total VA medical care expenditures divided by the state’s total number of unique patients using data from the National Center for Veterans Analysis and Statistics for fiscal year 2024, inflated to 2026–2028 dollars.

Head Start

This is an estimate of how many additional children could participate in a Head Start program in a state, county, district, or “place” (city, town, or equivalent) over the remaining 2.5 years of the Trump administration based on the area’s share of federal taxes being spent instead on the mass deportation of immigrants.

Head Start costs are calculated by dividing total federal Head Start funding in each state by the number of funded enrollments. The data are from the headstart.gov website for fiscal year 2024, inflated to 2026–2028 dollars.

Registered nurses

This is an estimate of how many additional registered nurses could be employed in a state, county, district, or “place” (city, town, or equivalent) over the remaining 2.5 years of the Trump administration based on the area’s share of federal taxes being spent instead on the mass deportation of immigrants.

Registered nurses’ annual mean wage by state in May 2025 (inflated to 2026–2028 dollars) is from BLS OEWS data. Benefits are estimated at 37.9% of pay based on BLS ECEC data for registered nurses in 2025Q2. The dollar cost of paid leave is excluded from benefits because it is included in annual wages.

SNAP benefits

This is an estimate of how many additional people could receive Supplemental Nutrition Assistance Program (SNAP) benefits in a state, county, district, or “place” (city, town, or equivalent) over the remaining 2.5 years of the Trump administration based on the area’s share of federal taxes being spent instead on the mass deportation of immigrants.

The cost of Supplemental Nutrition Assistance Program (SNAP) benefits is based on preliminary data from the U.S. Department of Agriculture (USDA) Food and Nutrition Administration website for February 2026 (inflated to 2027 and 2028 dollars). The annual cost per recipient is derived by dividing total monthly benefits in each state by the number of participants in the state and multiplying by 12.

Paid parental leave

This is an estimate of how many parents could take 12 weeks of paid parental leave in a state, county, district, or “place” (city, town, or equivalent) over the remaining 2.5 years of the Trump administration based on average wages in the state and the area’s share of federal taxes being spent instead on the mass deportation of immigrants.

The cost of paid parental leave is based on the average annual wage by state across all occupations from BLS OEWS data for May 2025 inflated to 2026–2028 dollars. The measure does not include self-employed workers. We assume the cost of parental leave is equivalent to 12 weeks of wages, not including benefits.

Public housing

This is an estimate of how many additional households could have access to low-cost public housing in a state, county, district, or “place” (city, town, or equivalent) over the remaining 2.5 years of the Trump administration based on the area’s share of federal taxes being spent instead on the mass deportation of immigrants.

The annual cost of public housing units by state is based on the Department of Housing and Urban Development (HUD) “Average HUD Expenditure Per Month” on public housing for 2025, multiplied by 12 and inflated to 2026–2028 dollars.

The Cost of Deportations Calculator was developed in partnership with

Imagine union membership tripling in the United States. It may sound radical—if you’ve forgotten history. In fact, more than 1 in 3 private-sector workers belonged to a union in the 1950s. The results? Wages grew in tandem with the economy. The middle class thrived. Black-white wage gaps shrank. Broadly shared economic growth was a reality, not an aspiration. That’s because when workers have bargaining power, they win better wages, benefits, and working conditions. This report shines a light on what we stand to win if we rebuild union power.

Over the last four decades, big corporations and the billionaires who run them have waged a relentless campaign against unions. And they have largely succeeded in reshaping the U.S. economy. By making it harder and harder for workers to organize and bargain collectively, the rich seized more and more income and wealth, destroying the U.S. middle class. Now the wealth of the richest Americans has exploded: The richest 0.1% own more than five times the combined wealth of the entire bottom half of the country.

And yet, workers haven’t given up. In 2025, unionization ticked upward. Public approval of unions has reached some of its highest levels in decades, and more than 50 million nonunion workers say they’d join a union tomorrow if they could. That’s because they know what unions deliver. In an economy that has been rigged against working people for decades, unions serve as a counterweight to corporate power—reducing inequality and building the kind of middle class that underpins a strong and inclusive economy.

It will take serious policy change to reverse nearly 50 years of deliberate attacks on working people and their institutions. It will require that politicians stand up to the superrich and corporate interests. It will require that workers continue to build power. But, as this report shows, we have much to gain from stronger unions. An organized and empowered workforce has powerful and far-reaching economic benefits.

Nearly four decades ago, I helped found the Economic Policy Institute because working people needed a voice in the economic debates that shape their lives. This report is exactly the work we envisioned: rigorous research that puts workers at the center of economic policy, and that arms all of us with the facts to fight for them. At a time when our economy is held in relatively few hands, we need this work—and we need unions—more than ever. 

Robert Reich
Professor, writer, and former Secretary of Labor

Executive summary

Union membership in the U.S. ticked up in 2025, breaking a decades-long trend of declining unionization. But today’s unionization rate doesn’t reflect the tens of millions of workers who want a union but can’t get one. This report examines what we stand to gain if we triple current union membership to 30%—restoring it to 1950s levels, when union strength delivered rising wages, narrowing racial wage gaps, and a thriving middle class.

Tripling union membership would:

• Deliver a 14.5% raise for the median worker—amounting to more than $7,700 annually, or nearly $270,000 over a 35-year career. These life-changing increases would benefit union and nonunion workers alike.
• Shift $1.2 trillion to workers annually. This would reverse a third of the increase in inequality experienced since 1979.
• Significantly narrow racial wage gaps. Because unions tend to boost wages more for Black and Hispanic workers than for white workers, tripling union membership would close racial wage gaps by more than one-third.
• Boost the number of people with health insurance. Since unions increase other forms of compensation, like health insurance benefits, the number of nonelderly people without health insurance would fall by about 25%. Unions further reduce uninsured rates by advocating for increased public benefits like Medicaid.
• Strengthen communities. States with high union density invest more in public education, have higher unemployment insurance recipiency rates, and have all adopted Medicaid expansion.
• Protect democracy. Unions boost voter turnout, equip workers with civic skills, and actively defend voting rights. States with high union density have passed far fewer voter restriction bills than low-density states.

Download the factsheet

Roadmap for tripling union density

Reversing decades of political neglect that has stealthily undermined workers’ rights to unions and collective bargaining will require comprehensive reform that weaves together tested approaches with bold new ideas, at both federal and state levels.

Two bills with bipartisan support could help restore collective bargaining

• The Protecting the Right to Organize Act would restore private-sector workers’ right to organize and bargain collectively. It would streamline the union formation process, establish penalties for labor law violations, override so-called “right-to-work” laws, and ban “captive audience” meetings.
• The Public Service Freedom to Negotiate Act would be the first federal law that guarantees all public-sector workers at the federal, state, and local levels the right to organize and collectively bargain.

Two bold new proposals could expand the benefits of collective bargaining and help tackle the affordability crisis

• Guaranteed annual raises for newly unionized workers. Legislation providing that newly unionized workers can use arbitration to achieve a first contract (if an employer fails to negotiate in good faith) should set a minimum standard that such contracts include a cost-of-living adjustment (COLA). For the typical worker, a 3% COLA means roughly $2,000 extra a year.
• Default collective bargaining when CEO-to-worker pay ratios exceed 100:1. Declining unionization and the stratospheric rise in CEO pay are deeply connected. Strengthening the bargaining power of workers in severely imbalanced companies would enable them to capture a larger share of the wealth their work creates.

States can remove anti-union laws and protect collective bargaining

Removing so-called “right-to-work” laws and restrictions on public-sector bargaining alone would increase union density nationally from 9.9% to 14.4%. Beyond removing those unionization barriers, states can also:

• Extend collective bargaining rights to workers currently excluded from federal law (in-home child care, home health care, agricultural, and gig workers);
• Protect workers’ right to refuse mandatory, anti-union “captive audience” meetings; and
• Extend unemployment insurance eligibility to workers on strike.

Introduction

In 2025, 14.7 million workers—10% of all wage and salary workers—were union members, an increase from 9.9% in 2024.1 Though small, the increase marks a departure from prior years’ downward trend in union density and coincides with record high public favorability of unions.2

This report examines what the U.S. might look like if union membership were to triple to 30%, restoring it to roughly its 1950s peak. We analyze the economic, social, and democratic impacts of this increase; examine the potential impact on state union density rates if all states were to remove anti-union policies; and offer policy recommendations to expand union membership.

While tripling union membership is an ambitious goal, it is fully consistent with workers’ own demand for unions. Recent survey data show that 43% of nonunion workers would vote to unionize if given the opportunity—the equivalent of about 56 million wage and salary workers (Ahlquist, Grumbach, and Kochan 2024; McNicholas, Poydock, and Shierholz 2026). If all these workers unionized, union density would rise from 10% to 48.7%—well above the 30% goal we examine in this paper.

Union decline, wage suppression, and affordability

As union membership has declined, workers’ wages have been suppressed and inequality has skyrocketed. The gap between typical workers’ pay and economy-wide productivity is at a historic high.3 Since 1979, productivity has grown 2.7 times as much as pay for typical workers (Figure A). This divergence reflects both rising wage inequality—high earners experiencing much stronger wage growth than typical workers—and a shrinking share of the economy’s income going to workers overall. Between 1979 and 2023, real (inflation-adjusted) earnings for the top 0.1% grew 354% (from $618,000 to $2.8 million), while earnings for the bottom 90% of households grew just 44% (from $30,000 to $43,000) (EPI 2026a). And workers are now taking home a historically low share of corporate-sector income—meaning shareholders and other capital owners are capturing more than ever before (EPI 2026b).

Figure A

Inequality has grown since 1979 because of intentional policy choices that suppressed wages for typical workers to accelerate income growth at the top. If pay for typical workers had kept pace with productivity over the past nearly five decades, their paychecks today would be more than 40% larger (EPI 2026c). Though affordability pressures are often framed as a problem of high prices, the real problem is this wage shortfall—and reversing that shortfall must be central to any serious affordability agenda. Collective bargaining is the most effective mechanism workers have to raise their wages and secure their fair share of economic growth. Expanding union membership and collective bargaining is central to addressing the affordability squeeze.

Unions raise wages for all workers

One of the most well-studied benefits of unions is the ability of collective bargaining to raise pay—resulting in a “union wage premium.”4 Historically, that premium has fluctuated around 15–20% (EPI 2026d). Unions also reduce inequality by compressing the wage distribution within firms, with the largest benefits going to workers at the bottom and middle. This is one reason the union wage premium is typically larger for those with less education, and for Black and Hispanic workers relative to white workers (Bivens et al. 2023).

Less appreciated is that unions also boost wages for nonunion workers. Higher wages at unionized firms make those jobs more attractive to nonunion workers, indirectly pressuring nonunion firms to raise wages to keep their workers. Nonunion firms may also raise wages to avoid unionization, especially when union density is already high in the relevant sectors and occupations.

Finally, unions also advocate for progressive changes in the tax and benefit system—indirectly raising pre-tax pay for low- and middle-wage workers. This happens in two main ways: First, when taxes on top incomes are higher, corporate executives have less incentive to maximize their own income at the expense of workers’ wages.5 Second, more generous social benefits like SNAP and Medicaid increase the bargaining power of lower-paid workers by making them less economically vulnerable and better able to reject low-quality jobs (Bivens 2026).6

These “spillover” effects of unions on the nonunion sector are significant and increase when union density is high. Rosenfeld, Denice, and Laird (2016) and Farber et al. (2021) find strong evidence that unions raise the wages of nonunion workers. Consistent with this, Fortin, Lemieux, and Lloyd (2021) estimate that between 1979 and 2017, declining unionization was responsible for 37% of the increase in inequality between the 90th and 50th percentiles of male workers—and more than half of that impact occurred because, as unions weakened, nonunion employers faced less pressure to offer higher wages.

Tripling union density would shift $1.2 trillion a year to working people

Our analysis of the relationship between union density and state median wages finds that for every 10 percentage point difference in union density, real median wages are about 7.2% higher.7 If we tripled union density from 10% to 30%, the real median wage for all workers (including both union and nonunion workers) would rise from $25.67 in 2025 to $29.39 per hour—a 14.5% increase.8 A full-time, full-year worker earning that wage would see annual pay rise by more than $7,700.

To put this into perspective, consider the substantial growth in the gap between pay and productivity between 1979 and 2025. A full-time, full-year worker at the 2025 median wage was paid about $53,400 per year—but would have earned about $76,400 had their pay kept pace with productivity growth (EPI 2026e). Through direct wage increases for union members and unionization’s spillover effects on nonunion workers, tripling union density would close roughly one-third of the productivity-pay gap, increasing annual pay to $61,100.

To contextualize the gain in another way, consider that the median annual cost of a mortgage in the U.S. is $18,252. An additional $7,700 per year would cover more than 40% of that cost.9

Perhaps more strikingly, consider that an extra $7,700 a year adds up to nearly $270,000 (in today’s dollars) over the course of a 35-year career—a life-changing increase for a working family. Adjusting the USDA’s latest estimate of the cost of raising a child to 2025 dollars yields a current cost of roughly $317,000 to raise a child from birth through age 17, including food, housing, transportation, health care, clothing, child care, education, and other expenses (USDA 2017). The additional $270,000 in career earnings that a typical worker would receive if union density were tripled would cover 85% of that cost.

Or, according to the College Board, the average annual cost of attending a four-year in-state public college, including room and board, is about $31,000 (Ma, Pender, and Hu 2025). Over four years, that comes to $124,000 per student—so the additional $270,000 in career earnings would more than cover the cost of sending two children to college.

Yet another way to show how transformational these effects would be for the U.S. economy and the economic security of typical families: Assuming the 14.5% wage boost we estimate from a tripling of union density applies to the bottom 80% of the U.S. workforce, this would raise these workers’ combined pay each year by $1.2 trillion.10 

Several useful reference points help illustrate the scale of this $1.2 trillion increase in workers’ annual pay. First, the increase would be nearly three times as large as the $430 billion U.S. families received in “COVID checks”—and unlike those one-time checks, these gains would be permanent and recurring.11 Second, the $1.2 trillion that tripling union density would shift to workers slightly exceeds the Pentagon’s 2025 budget—a redistribution of income on a scale comparable to the entirety of the U.S. military-industrial complex.12 Third and most revealingly, this increase would claw back a full third of the increase in income inequality since 1979. Between 1979 and 2022, the share of market income going to the richest 20% of households rose by 12.0 percentage points (with nearly all of that increase—10.1 percentage points—accruing to the richest 1%). A $1.2 trillion increase in the incomes of the bottom 80% of households would reverse a third of that shift, 4.0 of the 12.0 percentage points.13

Our estimates likely underestimate future gains

It’s worth noting that while our estimates show large wage gains to workers from tripling union density, they are likely being significantly held down by the fact that union density in the U.S. is starting from such a low level (10%). Our estimates therefore likely understate the wage gains workers will experience once the labor market reaches a higher level of union density. Fortin, Lemieux, and Lloyd (2021) find that the wage payoff to union density is much larger where density is already high, and this shows up clearly in our analysis as well: Below 15% union density, a one percentage point increase in density is associated with just a 0.2% increase in the median wage; above 15%, the median wage increases by 0.9%—a wage response more than four times as large (see Figure B).14

The economic intuition behind this 15% threshold is that a minimum scale of unionization is needed for collectively bargained wages to exert a strong influence on pay scales—both union and nonunion—throughout the broader economy. While every additional percentage point of unionization gives another 1% of workers the union pay premium, it has a more limited effect on wage-setting throughout the broader labor market until overall union density reaches around 15%.

Today’s typical state has a union density of about 10%, which means the wage gains from each additional percentage point of unionization—while still significant—are muted relative to the gains that occur once union density exceeds 15%. In essence, the policy assault on unions in recent decades has pushed density so low that we need a 50% increase—from 10% to 15% union density—just to start realizing the “normal” gains unions can bring to a high-road economy. Raising density from 10% to 30% would carry the labor market across that 15% threshold and well into the higher-density regime, where each additional percentage point increase in unionization delivers substantially larger gains for the median worker. This is why a transformational policy effort is needed: We must rebuild union density from the depressed levels created by decades of political neglect to the point where the full wage benefits of widespread collective bargaining can be realized.

Unions reduce racial wage gaps

Because unions increase wages for Black and Hispanic workers more than for white workers, unions reduce racial wage gaps. And this dynamic is not new—research shows that the union premium was already higher for Black workers than for white workers by the mid-20th century, meaning that the spread of unionization in that era was one of the country’s greatest forces for racial justice (Farber et al. 2021; Bivens et al. 2023). But with the decline in unionization over the past 45 years, racial wage gaps have widened and are now substantially worse than they were in 1979—damage that restoring union power would more than reverse. In 2025, the median Black or Hispanic worker earned 76.5% of the median white worker wage—a wage gap of 23.5%. Tripling union density would close more than one-third of that gap, reducing it to 14.6%.15

Unions boost benefits, not just pay

Unions also increase other forms of compensation, like health insurance benefits. In 2025, 95% of union workers had employer-sponsored health insurance, relative to 71% of nonunion workers. In addition, as discussed later, unions further reduce uninsured rates by advocating for increased public benefits like Medicaid. Figure C shows that nonelderly uninsurance rates are substantially lower in states with higher union density. To do this analysis, we divided the 50 U.S. states plus the District of Columbia into three equally sized groups based on their current (2023–2025) level of union density.16 Most low-union-density states have double-digit uninsured rates, but these rates typically fall to the single digits in medium- and high-union-density states. If union density tripled and all states were high-density states, the national nonelderly uninsured rate would fall by about a quarter, from 9.8% to 7.3%.

Figure C

Unions benefit communities

Unions don’t just improve workers’ pay and benefits—they give workers a voice in shaping the social fabric of their communities, lifting standards for union and nonunion workers alike. The data reveal a strong correlation between higher levels of unionization and a range of economic and personal well-being measures. When more workers are in unions, states have more equitable economic and social structures (McNicholas et al. 2025). Meanwhile, states with anti-union policies have lower union density and consistently worse outcomes across these measures.

Economic well-being

We first examine economic well-being—broadly defined as working people having the means to support themselves—using two indicators: the gap between productivity and pay, and unemployment insurance recipiency rates.

As discussed earlier, there has been a growing gap since 1979 between productivity—the value of the output generated by a worker in the U.S. economy in an hour of work, on average—and typical workers’ hourly compensation. Far from accidental, this divergence stems from deliberate policy choices in the U.S. beginning around 1980 that allowed the gains from economic growth to be increasingly captured by the highest earners, shareholders, and other capital owners—rather than being broadly shared across low-, middle-, and high-income households (Shierholz 2024).

The degree to which productivity gains have translated into higher pay for typical workers varies widely across states. Figure D shows that in states with smaller declines in unionization since 1979, a larger share of productivity gains translated into higher pay for typical workers. In other words, in places where unions remained stronger, it wasn’t just those with high incomes and wealth who benefited from economic growth—working people, both unionized and nonunionized, saw a bigger share of the gains.

Figure D

Unemployment insurance (UI) recipiency rates also offer insight into economic well-being. When a worker is laid off and their household income falls, unemployment insurance supports them and their family until they find another job. UI is a joint federal-state program that relies on state UI systems to effectively deliver benefits to unemployed workers. States differ in their rules and approaches under the federal UI framework, leading to wide variation in the share of unemployed workers receiving UI benefits (the UI recipiency rate).

Studies show a strong correlation between higher UI recipiency rates and high union density (Clegg et al. 2022); Figure E illustrates this strong positive relationship. In recent years, the average UI recipiency rate in high-union-density states was 36%, double the 18% rate in low-union-density states.

Unions fight to increase UI eligibility, ease of access, benefit levels, and benefit duration—to the benefit of all workers, union and nonunion (Hertel-Fernandez and Gould-Werth 2020). The strong correlation between union density and state UI recipiency rates suggests that expanding unionization by removing anti-union policies would result in higher UI recipiency rates.

Figure E

Personal health and well-being

Next we examine personal health and well-being—which we define as an individual’s physical and mental health—using one indicator, Medicaid expansion.

As we noted earlier, almost all union workers (95%) have access to health insurance, and uninsured rates are lower in high-union-density states. To show how unions influence health care coverage beyond explicitly bargained workplace plans, we examine whether a state has expanded Medicaid under the Affordable Care Act to broaden eligibility. The Medicaid public insurance program provides critical health coverage to families and individuals with low incomes. Research has found that Medicaid expansion has expanded access to health care; improved health outcomes, including fewer premature deaths; lowered uncompensated costs; bolstered financial security; and boosted economic mobility (CBPP 2020). While the Medicaid program has broad federal guidelines, it is administered by states—and a 2012 Supreme Court decision gave them the power to decide on eligibility and expansion. Since 2014, 40 states plus the District of Columbia have adopted Medicaid expansion; 10 states have not (Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin, and Wyoming).

Figure F shows a stark divide between high- and low-union-density states in terms of Medicaid expansion. All 17 high-union-density states have expanded Medicaid. Out of 17 medium-union-density states, 14 have adopted Medicaid expansion (Alabama, Kansas, and Wisconsin are the only medium-union-density states that have not adopted expansion). Just 10 out of 17 low-union-density states have adopted Medicaid expansion (Florida, Georgia, Mississippi, South Carolina, Tennessee, Texas, and Wyoming are the low-union-density states that have not adopted expansion).

There is a strong correlation between union density and Medicaid expansion. If states removed anti-union policies and became high-union-density states, they would be joining a group of states in which Medicaid expansion is currently universal, potentially helping to close the Medicaid coverage gap that currently leaves 1.5 million adults uninsured (Zhang 2026).

Figure F

Spending on public education

Union density also intersects with public education investment. Investment in public education helped make the U.S. the richest country in the world in the 20th century. The benefits of universal education are many—including a more productive workforce, and a more informed and engaged democratic society equipped to think critically. Unions play a key role in negotiating public spending on education. At the school district and state level, education unions advocate for increased funds for schools. 

We can measure the relationship between union density and public education investment by looking at states’ level of per-pupil spending. Adequate levels of per-pupil spending are crucial to maintaining quality education; low per-pupil spending limits the support students receive toward achieving their learning goals and makes it harder for districts to retain teachers and staff by offering competitive salaries or benefits. Increased per-pupil funding pays off for students. Research has consistently shown that increased funding for schools improves educational attainment, student achievement, and economic outcomes in adulthood (Jackson and Mackevicius 2023). In one study, researchers examined the impact of school finance reforms between 1972 and 2010 and found that a 10% increase in school spending for 12 years leads to increased high school graduation rates, 7% higher wages, and 10% higher family incomes in adulthood for children from districts that saw the spending increase (Jackson, Johnson, and Persico 2016).

Figure G shows that states with higher rates of unionization spend substantially more per pupil on education—demonstrating the impact of union advocacy on education investment and building a more educated society.

Figure G

Voting rights and democratic participation

Many states disproportionately disenfranchise people of color (Johnson and Feldman 2020), and the number of voter suppression laws enacted across the country is high and rising. These restrictions threaten democratic participation and the stability of our democracy.

Unions strengthen democracy by encouraging civic engagement and helping workers become informed voters. Unions communicate with their members about issues and candidates to make sure workers have the information they need when they go to the polls. And as democratic institutions where members elect leaders and ratify contracts, unions serve as “schools of democracy,” equipping workers with civic skills that carry over to public life (Andrias and Hertel-Fernandez 2026). More broadly, because many organizations that shape policy represent elite or corporate interests, unions are a countervailing force, bringing working people’s voices into legislative debates and building coalitions that can win against well-resourced opposition.

Research shows that these effects translate into greater political participation. Union members are more likely to vote than the general public, and voter turnout is higher in states with greater unionization (EPI 2021). Conversely, turnout is lower in states with “right-to-work” (RTW) laws, which weaken unions and in turn the civic engagement they foster. Feigenbaum, Hertel-Fernandez, and Williamson (2018) found that RTW laws reduced presidential election turnout by 2%, a substantial effect given the narrow margins that often decide presidential elections.

We build on this evidence by examining the relationship between union strength and laws that restrict voting. Figure H shows that there is a strong correlation between union density and voter suppression legislation. A large majority of low- and medium-union-density states passed at least one voter restriction bill between 2023 and 2025, while a large majority of high-union-density states passed none. Among high-union-density states, 14 out of 17 did not pass any voter restrictions during this period, while only eight of the medium-union-density states and three of the low-union-density states can claim this distinction.

These results are consistent with evidence that unions actively defend voting rights. Unions have long mobilized members to oppose voter suppression laws, educated communities about their rights, and turned out to vote despite increasing barriers (Bondy 2025). Unions have also expanded access to voting: Dean, McCallum, and Grumbach (2023) found that county-level union density was associated with greater access to ballot drop boxes—a highly secure way to increase access to voting—during the 2022 midterm elections. Together, these findings suggest that stronger unions not only increase voter participation but also help preserve and expand access to the ballot.

Figure H

State policy and union density

Increasing union density across all states—including those where anti-union policies have historically suppressed unionization—is essential to strengthening both the economy and democracy, improving all workers’ wages, and expanding access to public goods like health care, retirement, and education.

As the previous section made clear, residents of high- and low-union-density states face starkly different economic and social realities. These wide variations in union density across states—and highly variable economic outcomes—are strongly correlated with variations in state labor policies. For example, the union rights of millions of public-sector, agricultural, and domestic workers (including home health care and in-home child care providers) vary by state because workers in these occupations are excluded from coverage under federal law. And even for private-sector workers whose union rights are covered under federal law, collective bargaining rights are limited by anti-union “right-to-work” laws in many states. Research shows that anti-union state policies result in lower union density. Union density averages 6.2% in states with anti-union RTW laws compared with 15.8% in non-RTW states, and states that limit or prohibit public-sector collective bargaining have lower overall union density than other states (Sherer and Gould 2024; Sherer and Morrissey 2026).

Here, we consider what union density would be if states with certain anti-union laws adopted the policies of states that better protect workers’ rights to unionize and collectively bargain. We consider two policy changes: 1) requiring state and local governments to bargain with public-sector workers who choose to unionize; and 2) repealing so-called “right-to-work” laws that limit collective bargaining rights of private-sector workers. These are two of many policies that states can adopt to remove barriers to unionization, but we focus on them because of their clearly documented, large-scale impact on large numbers of workers across much of the country. At present, roughly half of U.S. states have RTW laws in effect and do not require public employers to bargain with unionized public employees. Modeling changes to these two policies lets us estimate what would happen to union density if we removed large state-by-state labor policy disparities and created a stable “floor” for collective bargaining for workers across all states. This provides an important starting point for considering how additional, stronger state labor policies might affect union density, worker wages, and democracy.

Public-sector workers face wide disparities in bargaining rights across states

Variations in collective bargaining rights for public-sector workers are rooted in history, notably in Southern states where systemic racism drove the enactment of anti-union policies (Childers 2023; Dixon 2007; Kaufman 2018; Stelzner, Hoyt, and Ramchurn 2019). By the 1980s, most states had enacted public-sector collective bargaining policies, though these statutes varied in strength and coverage (Freeman and Ichniowski 1988). In more recent decades, many states have repealed or harshly limited formerly robust public-sector collective bargaining statutes, while a few states have expanded them. A key distinction is whether state and local government employers have a legal duty to bargain with unionized employees over pay and working conditions, rather than being merely permitted to bargain—or outright banned from doing so.

Sherer and Morrissey (2026) classify state public-sector bargaining rules across five categories of workers: teachers, police officers, firefighters, other local government employees, and other state government employees. States vary widely in which categories they cover and how strongly, and that variation maps closely onto union density. In states with strong, uniform duty-to-bargain rules across all five categories, public-sector union density can be close to 50% or higher, while in states that ban bargaining across most categories, state and local density can fall as low as the single digits. Pay consequences track these differences. Across the country, public-sector employees earn less than their private-sector counterparts with similar experience and education. This public-sector pay gap is smaller when bargaining rights are strong: Sherer and Morrissey (2026) estimate that in states with robust duty-to-bargain rights, public-sector workers earn 14.3% less than private-sector workers; the gap widens to 19.6% in states where bargaining is only permitted, and to 22.5% in states where it is banned.

“Right-to-work” laws weaken union density and suppress wages for all workers

“Right-to-work” laws prohibit unions and employers from negotiating over union security—the contract terms under which workers covered by a union contract either join the union or pay an agency fee covering their share of representation costs. State RTW laws first emerged as part of anti-union industry campaigns to suppress multiracial worker organizing and maintain Jim Crow labor relations in Southern states following the passage of the National Labor Relations Act (Pierce 2017). By making union finances more unpredictable and leaving unions more vulnerable to ongoing employer interference, these laws weaken unions’ stability, suppress union density, and limit workers’ bargaining power. As a result, RTW laws generate negative outcomes for all workers—with or without a union. States with RTW laws have lower unionization rates and higher income inequality, and workers in RTW states on average have lower wages and benefits (Fortin, Lemieux, and Lloyd 2022). Sherer and Gould (2024) document that workers in RTW states earn 3.2% less than otherwise comparable workers in non-RTW states—about $1,670 per year for a full-time worker.

There are currently 27 states with RTW laws in place—including Colorado, which is not a traditional RTW state, but whose law has, since 1943, effectively imposed RTW conditions. By barring unionized workers from negotiating over union security unless they first win a second, state-administered election by a 75% supermajority of those voting or 50% plus one of all eligible workers—whichever is higher—Colorado’s anti-union policy has produced RTW-like outcomes, so we group it with RTW states.

Removing state anti-union policies would raise national union density from 9.9% to 14.4%

We estimate that these two policy changes—1) requiring state and local governments to bargain with public-sector workers who choose to unionize, and 2) repealing RTW—would substantially increase unionization in states that currently have more anti-union policies in place, as shown in Table 1.17 In the 24 states without a duty to bargain with public-sector employees, establishing that duty would raise public-sector union density from 16.7% to 46.7%. In the 27 RTW states, repealing RTW would increase private-sector density from 3.4% to 8.8%. Overall, removing these anti-union policies would increase union density in 27 states from 5.4% to 14.3%. Nationally, union density would rise from 9.9% to 14.4%.18 This is a conservative national estimate reflecting changes in union density only for the 27 states undergoing hypothetical policy changes and not including likely impacts on the 23 states and D.C. where stronger union policies are already in place. These states would likely also see some level of increased union density under this scenario, given that removal of anti-union state policies across the country would strengthen worker bargaining power and union organizing resources in all states.

Table 1

Removing state-level anti-union policies would increase median wages by up to $4,900 a year

Were the 27 RTW states to increase unionization to estimated levels, overall annualized median wages would rise by $1,600 to $4,900 for full-time, full-year workers, depending on the state. Table 1 shows that if Virginia’s density rose from 4.9% to 15.5% because of the removal of state-level anti-union policies, annual pay for full-time, full-year workers at the state median wage would increase by about $4,500. Removing these anti-union policies in Texas could cause a similar increase in density, raising annual pay by $3,400.

Of course, were workers in all states able to achieve 30% union density, the effects on median pay would be even larger. These impacts are shown in Figure I. The 23 percentage point increase in density in Alabama, for example, would increase annualized median pay there for full-time, full-year workers by about $8,500.

Figure I

Recent state policy changes show that anti-union laws lower union density

Recent “natural experiments” in states that have changed one or both of these labor policies also show the impact on union density. For example, in states that adopted new RTW laws since 2010, union density fell 3.8 percentage points between 2010 and 2023. By comparison, union density declined only 2 percentage points during this same period in non-RTW states (Sherer and Gould 2024).

Wisconsin is an example of a state that both repealed a previous duty to bargain with public employees (in 2011) and enacted a new RTW law (in 2015). Since adopting these anti-union policies, between 2011 and 2024, Wisconsin’s union density has fallen by half, from 14% to 7%. Over this same period, national union density declined just 2 percentage points, from 13% to 11%. With both a RTW law in place and no public-sector duty to bargain, Wisconsin’s union density is plummeting in comparison with national and regional trends (Dresser, Rogers, and Vasquez 2025). Other studies show that Wisconsin’s adoption of anti-labor policies and declining union density have generated a wide array of harmful outcomes for the state’s economy and democracy, including sharp decreases in public education spending, declining worker wages, widening public-sector pay gaps (including stark increases in gender pay gaps for teachers), and declining voter participation (Nack et al. 2019; García and Han 2021; Biasi and Sarsons 2022; Feigenbaum, Hertel-Fernandez, and Williamson 2018).

States have other policy options to enable workers to increase union density

Beyond these two policy changes, states have numerous other opportunities to increase union density by removing obstacles to unionization and ensuring more workers have full rights to collectively bargain (Sherer 2026). A few examples that have not yet been adopted in most states include:

• Creating pathways to collective bargaining for all workers in occupations not currently covered by federal labor law, including in-home child care and home health care workers, agricultural workers, and rideshare or delivery drivers treated as “independent contractors” by digital platform companies;
• Protecting workers’ freedom to refuse mandatory “captive audience” meetings on political or religious topics not related to work duties, including mandatory anti-union meetings employers typically hold when attempting to block workers from unionizing;
• Ensuring workers whose paychecks stop due to a strike or lockout are eligible to apply for unemployment insurance; and
• Establishing or expanding state agency capacities and public labor education programs that ensure workers can easily learn about their union rights.

We do not model the specific impacts of all possible state policy changes in this report. But our conservative, baseline estimate of increases in union density likely to result from removing two of the largest state obstacles to workers’ union rights—RTW laws in 27 states and the lack of a duty to bargain for public employees in 24 states—suggests that combining these changes with additional policy changes would likely lead to additional increases in union density across the country.

Federal policy and union density

Given the clear benefits of tripling union membership, it is critical that policymakers prioritize reforms that enable workers to organize and collectively bargain. It is tempting to search for a policy “silver bullet” to restore the promise of the National Labor Relations Act (NLRA), our primary labor law. But the reality is that policymakers must adopt comprehensive labor law reforms to eradicate the effects of decades of political neglect that has steadily undermined the effectiveness of U.S. labor law. As discussed above, these reforms must at a minimum reverse state anti-union policies, via state or ideally federal labor law reforms that end Jim Crow-era occupational exclusions, ensure equal union rights and pathways to collective bargaining for all workers in all states, and eliminate RTW laws.

Labor law reform has passed the House three times with bipartisan support

A consistent narrative maintains that such policy change is impossible, but that narrative relies on the mistaken notions that real reforms require more political power than the labor movement has and that our legislative process prevents labor law reform. It is true that winning policy fights takes significant political capital. But labor law reform must not be seen as solely a labor movement priority. It is central to any attempt to address affordability pressures and economic inequality. And in this moment, such reform is imperative to our democracy. While the Senate filibuster rules do prevent much legislative progress, they are not inevitable dictates but rather agreed-upon rules that, as history shows, can change. It is deeply destructive to our political system to convince working people that the system simply cannot be expected to serve their interests, which is what this flawed narrative around labor law reform reinforces. To be clear, policies favored by elites benefiting from the unequal status quo are far more likely to become law than even broadly popular ones. But these reforms have the potential to help rebalance this inequality.

In fact, in the last two decades, legislation to significantly reform labor law has passed the U.S. House of Representatives three times—with bipartisan support each time. Even in the current Congress, legislation aimed at restoring collective bargaining rights has managed to bypass Republican House leadership opposition via parliamentary procedure (discharge petition) and pass with bipartisan support.19 Of the on average 12,000 bills introduced in a given Congress, labor law reform measures have had more success than roughly 95% of bills—passing a chamber with bipartisan support. Of course, Senate rules around the filibuster requiring 60 votes to proceed on consideration of various measures have been a significant impediment to the Senate passing these reforms. However, since 2013, the Senate has used the “constitutional option” to change its own rules for procedures and has eliminated the 60-vote requirement to proceed on specific debates three times. That could be done here, too.

Record high union approval strengthens the case for labor law reform

Labor unions today have significantly higher public approval ratings than when major labor law reform was last considered, polling more than 20 points higher.20 Since 2021, approval for unions has remained high, with over 68% of people in the U.S. viewing unions favorably (Brenan 2025). This positive view of unions is shared across generations, with majorities of Boomers (59%), Gen X (58%), Millennials (61%), and Gen Z (63%) viewing unions favorably. Young adults (ages 18–35) have the highest favorability rate at 72% (Glass 2025).

Unions are viewed positively across party lines, with both Democrats (90%) and independents (69%) having high favorability rates for unions, and over 40% of Republicans approving of labor unions (Brenan 2025). Some conservative organizations recognize that unions are popular among workers: Research by American Compass (2025) finds that at least 46% of Republicans view unions somewhat favorably, with favorability increasing among young Republicans (60%).

Data from the American National Election Studies show that people in the U.S. favor unions over big business now more than ever—with the average rating for labor unions hitting a new high (60%), while big business hit a low (44%) (Sojourner and Reich 2025). Further, most people in the U.S. say the decline in union density is bad for the country (60%) and bad for working people (62%). Most young adults (69%), including young Republicans (52%) and young Democrats (82%), view the decline in union density as negative for working people (Van Green 2025).

Three bipartisan bills would pave the way toward restoring collective bargaining rights

As with many popular policies, high public opinion of unions has not translated into the enactment of labor law reform. Even though several bills that would reform aspects of our current labor law are being introduced and even passing with bipartisan support in the U.S. House of Representatives, the Senate has failed to act on the legislation. There are three main bills with bipartisan support that would help reform our current labor law system and each should be passed.21

• The Protecting the Right to Organize (PRO) Act would restore private-sector workers’ right to organize and bargain collectively. It would streamline the process of forming a union, create a roadmap to reaching a first collective bargaining agreement, establish civil monetary penalties for employers who violate labor law, among other reforms—such as expanding coverage to more workers, overriding state “right-to-work” laws, and banning “captive audience” meetings (McNicholas, Poydock, and Rhinehart 2021). Since its first introduction in 2019, the PRO Act has passed the House of Representatives twice with bipartisan support.
• The Public Service Freedom to Negotiate Act (PSFNA) would establish public-sector workers’ right to organize and bargain collectively. This would fill an important gap—there is currently no federal law that guarantees all public-sector workers at the federal, state, and local levels the right to organize and collectively bargain. As a result, more than half of U.S. states today lack comprehensive collective bargaining laws for state and local public-sector workers (Sherer 2026).
• The Protecting America’s Workforce Act (PAWA) would reverse President Trump’s executive order that revokes collective bargaining rights for federal workers. The bill would reestablish collective bargaining rights for more than 1 million federal workers. In December 2025, PAWA passed the House of Representatives by a 231-195 vote.

Beyond passing these important bills, policymakers should also consider additional policies to help workers access collective bargaining and union membership. We propose two concrete policies that complement the labor reforms above. While these two proposals alone will not result in tripling union membership, they could help more workers receive the benefits of collective bargaining, which serves as a corrective to the affordability crunch and the economic inequality that characterizes our economy.

Guaranteed annual raises for workers in first contract arbitration

When workers win a union and begin to collectively bargain with their employer, both parties have an obligation to bargain in “good faith.” However, given that the NLRA lacks meaningful penalties for violations, employers often engage in bad faith bargaining tactics with few consequences. In fact, it is well documented that many union-busting consultants view bargaining as a new phase of union-busting and advise employers to drag out bargaining for as long as possible. The goal is to avoid reaching a contract for a year or more, hoping that workers will then give up their union through decertification, which is permitted one year after the election. It is no coincidence that workers who have successfully formed a new union spend an average of 465 days bargaining for a first contract before reaching an agreement.

The Faster Labor Contracts Act, which overwhelmingly passed the U.S. House of Representatives last month, would discourage delay and promote good faith bargaining by establishing a mediation and binding arbitration process when employers refuse to bargain in good faith. Beyond guaranteeing workers first contract arbitration, we suggest the adoption of a mandatory cost-of-living adjustment (COLA) for workers whose first contract bargaining ends up in arbitration. This would establish an important guardrail for workers in the arbitration process, given that an arbitrator will ultimately impose a final contract on both parties. This provision would ensure that workers receive at least a COLA each year of their first contract. In other words, by voting for a union, workers would be voting for a guaranteed raise.22

For the average production, nonsupervisory worker, a 3% COLA would result in almost a $2,000 increase in annual earnings for a full-time, full-year worker. 23 Table 2 shows that, while these increases would vary widely by industry because pay varies widely by industry, workers in some of the lowest-paid industries would still see annual pay increases above $1,000.

Table 2

Default collective bargaining when CEO-to-worker pay ratios exceed 100:1

The outsized and ballooning gap in recent decades between CEO pay and the pay of typical workers is among the clearest signs that the economy’s rules have been rigged to allow the most powerful to claim oversized shares of income growth. This CEO-to-worker pay ratio rose nearly tenfold from 1978 to 2024, as the pay of CEOs rose over 1,000% while the pay of typical workers rose just 26%. The explosion of CEO pay was driven not by CEO’s rising productivity or skills, but by policy changes that boosted both the incentives and the ability of CEOs to raise their own pay.

When a firm’s CEO makes more than 100 times what the typical worker in their industry makes, effective corporate governance has clearly broken down—which threatens the ability of those outside the C-suite to receive their fair share of the firm’s income. The two main parties competing with executives to claim a share of a firm’s income are the shareholders and the firm’s workers. The best mechanism for ensuring that workers are able to bargain against CEOs and shareholders for their fair share of the income generated by the firm is collective bargaining.

We propose instituting default collective bargaining in any firm that meets or exceeds this 100:1 ratio. Securities and Exchange Commission (SEC) reporting already requires the annual disclosure of CEO pay (SEC 2007). We propose that these disclosures be reported not only to the SEC but also to the National Labor Relations Board. Comparing those disclosures with Bureau of Labor Statistics data on the pay of a typical worker economy-wide in various industries, the NLRB would determine which corporations meet the default collective bargaining ratio of 100:1.24 The NLRB would then publish a public notice and notify specific corporations and their workers that the default collective bargaining ratio had been met, triggering default collective bargaining at the firm. The NLRB would then direct an election for a bargaining representative to be held within 45 days of the notification.25

Nonsupervisory workers at these firms would then have the opportunity to select a bargaining representative of their choosing—whether a labor organization or other representative. The NLRB would conduct the election for and certify a bargaining representative, after which bargaining would start. For purposes of default collective bargaining, the presumption for the bargaining unit would be a wall-to-wall unit—a model where all nonsupervisory employees join a single bargaining unit—ensuring comprehensive coverage under the collective bargaining process and resulting contract. This standard would apply absent an employer or employee representative demonstrating extraordinary circumstances.26 The NLRB would then determine the appropriate bargaining unit, the same way the agency already accepts or rejects bargaining unit proposals. We propose that all such questions be resolved within 10 days of the NLRB’s notice of election for bargaining representative. This proposal would not apply to existing bargaining units, but in firms where unions are present, it would apply to any nonunionized nonsupervisory employees, as described below.

A threshold of 100:1 for the CEO-to-typical-worker pay ratio is reasonable and fair. A ratio this high clearly signals a fatal breakdown in the ability of the firm’s workers and shareholders to protect their income claims against executives looking to maximize their own incomes. A ratio this high will not affect most publicly traded companies but will be relevant to a large share of the U.S. workforce.

Comprehensive data on CEO pay are available only for a subset of firms: The Compustat Execucomp database tracks CEO pay for half of publicly owned companies (and most U.S. firms are not publicly owned). For the firms in the Compustat database, under half (41.7%) had a CEO-to-typical-worker pay ratio exceeding 100:1 in 2024. This proposal would provide the 30 million workers employed in firms that have higher ratios—representing about a fifth of total private-sector employment in the United States—with collective bargaining.

It is not a coincidence that the stratospheric rise in CEO pay was accompanied by an acceleration in the downward trend of unionization in the United States. The broader correlation between declining unionization and the rise of inequality is well established, and the highest-quality research documents that this relationship is clearly causal, with the decline of unions leading to a higher share of income claimed by households at the top of the income distribution (Farber et al. 2021).

To be clear, using a threshold CEO-to-worker pay ratio as a trigger for default collective bargaining will not alone solve the problem of excess CEO pay. We focus on this threshold as a policy trigger because it is a readily available and measurable indicator of the outsized control of executives over the distribution of the firm’s income. In the total absence of collective bargaining or any other strong corporate governance institutions, firm executives will shift income in a zero-sum fashion away from both the workers and the shareholders of a firm. If shareholders manage to assert some influence over CEO pay—e.g., through public pressure campaigns or say-on-pay mandates—one likely outcome will be CEOs looking to suppress the firm’s wages even further to make room for both their own outsized salaries and a return to shareholders that placates them. Only collective bargaining can protect the interests and earnings of workers in firms where executives pocket an outsized share of firms’ incomes.

If collective bargaining became widespread enough throughout the corporate sector, it would likely not only boost workers’ wages but also rein in excess executive pay broadly—actually helping shareholders at the same time. The research on this question is encouraging: Unions and collective bargaining have been found to significantly restrain excess CEO pay (Huang et al. 2017; Nanda, Nishikawa, and Prevost 2025; DiNardo, Hallock, and Pischke 2000). But even if expanded collective bargaining does not tamp down the CEO-to-worker pay ratio beneath our 100:1 threshold, it will at a minimum protect workers’ interests from excess executive power—without foreclosing any policy route shareholders take to restrain excess CEO pay.

Currently, a number of firms with at least some degree of unionization among their workforces have CEO-to-worker pay ratios that exceed 100:1. But this is not an argument against using this threshold as an indicator of dysfunctional corporate governance requiring a strong policy solution. For many of these firms, union coverage among their rank-and-file workforce is far from complete, so this proposal would help fill in glaring gaps. Most of these firms clearly do pay wages that are among the highest in their industries, which signals that the policy of default collective bargaining to protect workers’ interests in the face of dysfunctional corporate governance would largely work. Finally, one key empirical driver of high CEO pay is the simple size of the firm: The CEO-to- worker pay ratio rises steeply with the size of the firm, all else equal.27 The firms with CEO-to-worker pay ratios above 100:1 and some degree of unionization among their workforces are large firms; it would take a very strong effect of collective bargaining on CEO pay specifically to have kept pay ratios at these large firms well below average.

In our world with only 10% union density (and less than this in the private sector), it should hardly be a shock that collective bargaining by itself has not been able to stem what has been an irresistible tide toward high CEO pay. Even large increases in executive pay are not enormous when compared with overall returns to shareholders. Given the strong policy and economic barriers to shareholder activism in restraining CEO pay, it takes truly outrageous pay scales to mobilize enough organized opposition from shareholders. In those firms where it is relatively strong, collective bargaining has protected workers’ interests, and that is the primary goal we are looking to achieve with this policy. The fact that in these firms the CEOs have felt free to shift income to themselves at the expense of other stakeholders (like the shareholders of the firm) is not a sign that default collective bargaining is a bad solution for protecting workers’ interests—it is only a sign that the problem of excess CEO pay needs to be addressed from other angles as well.

Tripling union density is what workers want—and it is entirely achievable

Restoring union density to 1950s levels is not a nostalgic pipe dream. Federal and state policymakers have a clear roadmap for tripling union density. While no single reform discussed in this report is a silver bullet for the problems facing the country, taken together they would address one of the worst: the erosion of workers’ right to bargain for their fair share of the wealth they produce. These reforms are meaningful steps toward tripling union density, and toward an economy where productivity gains are shared broadly, not captured by corporate elites and the superrich.

The evidence in this report shows what is at stake. Tripling union density would deliver nearly $270,000 in extra earnings over the median worker’s career and shift $1.2 trillion annually to working people—reversing a third of the rise in inequality since 1979. Rebuilding union power would narrow racial wage gaps by more than a third, and removing state anti-union policies would help dismantle the legacy of Jim Crow-era campaigns aiming to suppress multiracial organizing. States with higher union density deliver better economic and personal well-being outcomes to their residents, and they have healthier democracies with fewer voting restrictions. At a time when the voting rights of all citizens are under attack, rebuilding union power is a democratic imperative.

Acknowledgments

The authors thank Hilary Wething for her contribution to this report’s section on public education spending. We also thank Matthew Wich, Summer Labor Fellow from the Institute for Social Concerns at the University of Notre Dame, for his support of the project.

Appendix

Methodology

How we measure union density

The Bureau of Labor Statistics provides data on both union membership—workers who are full-fledged union members—and union representation, which includes both union members and workers who are not members but are covered by a collective bargaining agreement. As a result, the share of workers represented by a union is higher than the share of union members. For example, in 2025, 11.2% of workers were represented by a union, but 10% were union members.

In this report, we measure union density as the share of workers who are members of a union. Throughout this report, the terms “union density” and “unionization” refer to those who are members of a union. When measuring union density by state, data are averaged over three years (2023 to 2025) to give a more accurate estimate of state unionization rates and avoid temporary single-year changes due to small sample sizes in some states.

Estimating wage effects of tripling union density

To assess how much higher wages would be after tripling union density, we use state-level annual data on wages and unionization from 1979 to 2019 and compare median wages with unionization rates across states and over time. Specifically, we regress the state median wage on the state union membership rate, controlling for permanent differences in state characteristics, national annual shocks (like recessions), and annual state characteristics like state unemployment rate, minimum wage level, and education, race, age, gender, broad industry, and managerial shares.

Using state-level data from the Current Population Survey Outgoing Rotation Group for 1979–2019, we regress the log median wage on union density with state and year fixed effects and additional covariates: the log minimum wage, unemployment rate, and shares of those with less than a high school degree and just a high school degree, age group shares, and shares of those who are white, Black, Hispanic, married, and shares of those in the public sector, manufacturing, construction, services, and a managerial occupation. Regressions are weighted by state employment levels averaged over 1979–2019. The coefficient on union membership is 0.724 with a standard error, accounting for clustering at the state level, of 0.191.

To calculate effects of increasing union density on racial wage gaps, we use the same wage regression as before, except where the dependent variable is the state annual racial wage gap.

The calculation yielding the $1.2 trillion estimate of the annual increase in workers’ pay from tripling union density is as follows. First, the share of total labor income claimed by the bottom 80% is calculated from data provided by the Congressional Budget Office’s (CBO 2026) Distribution of Household Income data (we focus on the bottom 80% because research has generally identified the positive effect of unions on boosting pay as applying mostly to union and nonunion workers in the bottom 80% of the U.S. workforce). In 1979 this share was 60.5%, but by 2019 it had fallen to 50.1%. We use 50% for our calculations. Then we multiply the 14.5% boost to pay stemming from a tripling of union density by this 50% of labor income to get an estimate (7.25%) of how much total labor compensation would rise in the event of a tripling of union density. In the first quarter of 2026, the National Income and Product Accounts (NIPA) Table 2.1 from the Bureau of Economic Analysis (2026a) reports that total labor compensation was $16.1 trillion. Multiplying this by the 7.25% pay boost from tripling union density yields $1.16 trillion in higher pay for the bottom 80%. We believe this is the appropriate estimate for approximating how much higher wages would be for most workers if union density tripled. While potential caveats merit consideration, none, in our view, hold much force. For example, the regressions used earlier in the paper use median wages, not median total labor compensation, as the dependent variable. However, a long research literature has highlighted that benefit premiums stemming from unionization are likely even larger than wage premiums (Knepper 2020). To the degree that tripling union density works by giving all workers more leverage and bargaining power in labor markets, it seems clear that some of this leverage will be used to obtain broader and more generous coverage of benefits, not just higher wages. Another objection could be that union effects (both direct and indirect effects) are higher in the middle of the wage distribution than in either the lower or upper parts of the distribution, and hence the full 14.5% wage boost would only apply to (say) the second and middle fifths of workers while workers in the lowest and fourth fifth would see smaller wage boosts. However, in work that has estimated both the overall average effect of unionization on nonunion wages and the effect by wage percentile, the overall average effect is roughly one-half the effect at the median, a result that would be consistent with applying the 14.5% premium to half of all labor income, as we do (Fortin, Lemieux, and Lloyd 2021). Other research has similarly found that union effects at the median are very close to overall average effects (Baker et al. 2026).

For our analysis of how wage effects differ across union density levels, we use the same regression of log median wages on union density described above, modified to let the slope differ below and above 15% density using a piecewise-linear specification interacting union density with an indicator for density of at least 15%, while retaining the same controls and state and year fixed effects, weighted by state employment. The difference in slopes is statistically significant at the 1% level.

The scatterplot in Figure B uses 50 state-year bins to show this nonlinearity directly. The binned scatterplot groups the state-year observations into 50 employment-weighted bins by union density and plots each bin’s average real log median wage against its average union density, after partialing out the same controls and state and year fixed effects used in the regression.

State union density groupings

We divided the 50 U.S. states plus the District of Columbia into three equally sized groups based on their current (2023–2025) level of union density.

These groupings are shown in Appendix Table 1. We refer to the 17 states with the highest union density as “high-union-density states” (with 11.9%–25.1% union membership rates); the next 17 states (including D.C.) are “medium-union-density states” (6.8%–11.6%); and the remaining 17 are “low-union-density states” (2.5%–6.1%).

Appendix Table 1

Estimating union density effects of establishing a public-sector duty to bargain and repealing “right-to-work” laws

To estimate the effect of these two policy changes—1) requiring state and local governments to bargain with public-sector workers who choose to unionize, and 2) repealing RTW—we use the CPS Outgoing Rotation Groups for 2023–2025 to compute union density rates in states with stronger union policies (i.e., states with public sector collective bargaining and/or without RTW). We do this separately by industry and major occupation group for the private sector and by level of government (federal, state, and local) for the public sector. We then apply those rates to the workforce of each state that lacks the corresponding policy, holding each state’s industry, occupation, and government-employment mix fixed. Nevada is an exception on the private-sector side: Although Nevada is a RTW state, its private-sector union density is already comparatively high, so we hold its private-sector density at its current level.

Notes

1. “Union membership” refers to workers who are full-fledged union members, while “union representation” includes both union members and workers covered by a collective bargaining agreement but not members. The share of workers represented by a union is thus higher than the share of union members. In 2025, for example, 11.2% were represented by a union and 10% were union members.

2. In 2025, for the fifth consecutive year in a row, approval of unions reached record high levels last seen in the late 1950s, when union membership was roughly triple what it is now.

3. The productivity-pay gap is a measure of how much income is generated in an average hour of work.

4. “Union wage premium” refers to the additional wages paid to union members compared with nonunion workers with similar characteristics.

5. For example, when the top marginal tax rate was 91%, as it was in the 1950s and early 1960s, executives kept far less of each additional dollar of pay than they do under today’s 37% top rate, which reduced the payoff to pursuing ever-larger compensation packages.

6. Relatedly, expanded unemployment benefits during the pandemic boosted workers’ bargaining power and compelled employers to make higher wage offers (Bivens and Banerjee 2023).

7. See appendix for details about our methodology.

8. The real median wage is the wage of the person in the middle of the overall wage distribution, including both union and nonunion workers.

9. The median monthly cost of a mortgage in the U.S. is $1,521 according to Census (2025). Over the course of a year, that is $18,252.

10. See appendix for details about the calculation of this figure.

11. In 2020 and 2021, Congress authorized Economic Impact Payments—better known as the “COVID checks.” Those three rounds of payments added roughly $430 billion to U.S. families’ personal income in those years and were widely viewed as an historically ambitious economic intervention. Data on how much these checks added to personal income can be found at Bureau of Economic Analysis (2026c).

12. Data on federal defense spending in 2025 is from Bureau of Economic Analysis (2026b).

13. Data on the income shares by percentile come from CBO (2026), which contains data through 2022. The calculation of how much the $1.2 trillion gain to wages would reverse the rise in income shares of the top quintile uses data from BEA (2026a).

14. See appendix for details on how we estimated these wage effects.

15. See appendix for details on how we calculated the effects of increasing union density on racial wage gaps.

16. See Appendix Table 1, which shows how we grouped states into low-, medium-, and high-union-density categories.

17. For details on the data and methodology used to produce these estimates, see appendix.

18. For this state-level analysis, we use 2023–2025 averages of union density across states, which is 9.9%, rather than the 10% for 2025 cited earlier in this report.

19. See passage of Protecting America’s Workforce Act and Faster Labor Contracts Act.

20. The last time a major labor law reform was considered was in 2009 with the Employee Free Choice Act.

21. The Protecting the Right to Organize Act has two Republican co-sponsors, the Public Service Freedom to Negotiate Act has six Republican co-sponsors, and the Protecting America’s Workforce Act has nine Republican co-sponsors.

22. One way to determine the exact COLA amount is to use nonseasonally adjusted values of the national Consumer Price Index for All Urban Consumers (CPI-U) published by the Bureau of Labor Statistics. These price index values are easily available, less subject to revision, and widely covered in the media. The simplest COLA adjustment would be to use the annual rate of inflation measured as the percent change between the two most recent annual averages of nonseasonally adjusted CPI-U values. See BLS (2023) for other considerations.

23. CBO estimated CPI in 2026 at 2.8%, 2027 at 2.4%, and then 2.3% after—however those estimates were done before the U.S. war in Iran that increased energy prices, so we estimate COLA at 3% for purposes of the proposal. To calculate full-time, full-year worker wages, we used 2025 average production, nonsupervisory wage rates (EPI 2026f).

24. We specifically would recommend calculating the CEO-to-typical-worker pay ratio using the methodology detailed in EPI (2025). 

25. In order to appear on the ballot, an individual or organization would have to demonstrate a record of collective bargaining over the preceding three years or obtain 100 signatures or 10% of the workforce, whichever is less.

26. The showing of extraordinary circumstances is referenced in the acute care hospital rule: 29 CFR § 103.30 (1989).

27. This correlation between simple firm size and CEO pay is yet another piece of evidence that CEO pay is not about the skills or acumen of individual CEOs, but is driven by noncompetitive market structures and labor markets for executives.

References

AFL-CIO Tech Institute. 2026. “It’s Better in a Union!” (web page). Accessed July 7, 2026.

Ahlquist, John S., Jake Grumbach, and Thomas Kochan. 2024. The Rise of the ‘Union Curious’: Support for Unionization Among America’s Frontline Workers. Economic Policy Institute, July 2024.

American Compass. 2025. PRO-Tip: Only Some Labor Reforms Are Pro-Worker. May 1, 2025. 

Andrias, Kate, and Alexander Hertel-Fernandez. 2026. Democratic Abundance: An Abundance That Works for Workers. Roosevelt Institute, April 2026.

Baker, Michael, Yosh Halberstam, Kory Kroft, Alexandre Mas, Derek Messacar. 2026. The Impact of Unions on the Wage Distribution: Evidence from Higher Education. American Economic Review: Insights 8, no. 2 (June): 196–213.

Biasi, Barbara, and Heather Sarsons. 2022. “Flexible Wages, Bargaining, and the Gender Gap.” Quarterly Journal of Economics 137, no. 1 (February): 215–266. https://doi.org/10.1093/qje/qjab026.

Bivens, Josh. 2026. “Employer Assessment Fees Are Not an Adequate Solution to Low Wages and Large Safety Net Cuts.” Working Economics Blog (Economic Policy Institute), February 27, 2026.

Bivens, Josh, and Asha Banerjee. 2023. Lessons from the Inflation of 2021–202(?). Economic Policy Institute, April 2023.

Bivens, Josh, Celine McNicholas, Kyle K. Moore, and Margaret Poydock. 2023. “Unions Promote Racial Equity” (fact sheet). Economic Policy Institute, July 31, 2023. 

Bondy, Assaf S. 2025. “Workers For Democracy? Trade Unions and the Struggle Against Democratic Backsliding.” Democratization 33, no. 2: 344–368. https://doi.org/10.1080/13510347.2025.2507359. 

Brenan, Megan. 2025. “Labor Union Approval Relatively Steady at 68% in U.S.” Gallup, August 28, 2025. 

Bureau of Economic Analysis. 2026a. National Income and Product Accounts Table 2.1. – Personal Income and Its Disposition. Accessed June 25, 2026.

Bureau of Economic Analysis. 2026b. National Income and Product Accounts Table 1.1.5 – Gross Domestic Product. Accessed June 25, 2026.

Bureau of Economic Analysis. 2026c. COVID-19 and Recovery Archive – Personal Income. Accessed June 25, 2026.

Bureau of Labor Statistics. 2023. How to Use the Consumer Price Index for Escalation. June 8, 2023.

Bureau of Labor Statistics. 2026. Employee Benefits in the United States. Table 2. Medical care benefits: Access, participation, and take-up rates, March 2025. Last modified September 25, 2025. Accessed May 4, 2026. 

Census Bureau. 2025. “Monthly Mortgage Payments for Homeowners Who Moved in 2024 Were $2,225, Above the U.S. Median of $1,521.” September 11, 2025.

Center on Budget and Policy Priorities (CBPP). 2020. The Far-Reaching Benefits of the Affordable Care Act’s Medicaid Expansion (chart book). October 21, 2020. 

Childers, Chandra. 2023. Rooted in Racism and Economic Exploitation. Economic Policy Institute, October 2023.

Clegg, Daniel, Elke Heins, and Philip Rathgeb. 2022. “Unemployment Benefit Governance, Trade Unions And Outsider Protection In Conservative Welfare States.” Transfer: European Review of Labour and Research 28, no. 2: 195–210. 
https://doi.org/10.1177/10242589221094240. 

Congressional Budget Office (CBO). 2026. Distribution of Household Income 2022.

Dean, Adam, Jamie McCallum, and Jake Grumbach. 2023. Labor Unions and the Defense of American Democracy. Economic Policy Institute, December 2023. 

DiNardo, John, Kevin F. Hallock, and Jörn-Steffen Pischke. 2000. “Unions and the Labor Market for Managers.” IZA Discussion Paper, August 2000.

Dixon, Marc. 2007. “Limiting Labor: Business Political Mobilization and Union Setback in the States.” Journal of Policy History 19, no 3: 313–344. https://doi.org/10.1353/jph.2007.0015.

Dresser, Laura, Joel Rogers, and Leslie Vasquez. 2025. The State of Working Wisconsin 2025. High Road Strategy Center, August 2025.

Economic Policy Institute (EPI). 2021. “Unions Help Reduce Disparities and Strengthen Our Democracy” (fact sheet). April 23, 2021.

Economic Policy Institute (EPI). 2025. “CEO Pay Has Skyrocketed Since 1978: Discussion of our Methods” (web page). Last updated September 25, 2025.

Economic Policy Institute (EPI). 2026a. “Average Real Annual Wage (2023$),” State of Working America Data Library. Accessed June 30, 2026.

Economic Policy Institute (EPI). 2026b. “Nominal Wage Tracker” (web page). Accessed June 30, 2026.

Economic Policy Institute (EPI). 2026c. “The Productivity–Pay Gap” (web page). Last updated March 23, 2026.

Economic Policy Institute (EPI). 2026d. “Union Wage Premium – Union Wage Premium, Average (Regression-Based),” State of Working America Data Library. Accessed May 4, 2026.

Economic Policy Institute (EPI). 2026e. “Wage Calculator” (web page). Accessed May 4, 2026.

Economic Policy Institute (EPI). 2026f. “Hourly Earnings by Industry – Production and Nonsupervisory Employees, Average Nominal Wage,” State of Working America Data Library. Accessed June 30, 2026.

Farber, Henry S., Daniel Herbst, Ilyana Kuziemko, and Suresh Naidu. 2021. “Unions and Inequality over the Twentieth Century: New Evidence from Survey Data.” The Quarterly Journal of Economics 136, 3 (August): 1325–1385.

Feigenbaum, James, Alexander Hertel-Fernandez, and Vanessa Williamson. 2018. “From the Bargaining Table to the Ballot Box: Political Effects of Right to Work Laws.” National Bureau of Economic Research Working Paper no. 24259, January 2018.
https://doi.org/10.3386/w24259.

Fortin, Nicole, Thomas Lemieux, and Neil Lloyd. 2021. Labor Market Institutions and the Distribution of Wages: The Role of Spillover Effects. Journal of Labor Economics 39, no. S2.

Fortin, Nicole, Thomas Lemieux, and Neil Lloyd. 2022. “Right-to-Work Laws, Unionization, and Wage Setting.” National Bureau of Economic Research Working Paper no. 30098, June 2022. https://doi.org/10.3386/w30098.

Freeman, Richard B., and Casey Ichniowski. 1988. When Public Sector Workers Unionize. Chicago, Il.: Univ. of Chicago Press.

García, Emma, and Eunice Han. 2021. The Impact of Changes in Public-Sector Bargaining Laws on Districts’ Spending on Teacher Compensation. Economic Policy Institute, April 2021.

Glass, Aurelia. 2025. “Everybody Likes Unions.” Center for American Progress, November 4, 2025. 

Hertel-Fernandez, Alexander, and Alix Gould-Werth. 2020. Labor Organizations and Unemployment Insurance: A Virtuous Circle Supporting U.S. Workers’ Voices and Reducing Disparities in Benefits. Washington Center for Equitable Growth, October 2020.

Huang, Qianqian, Feng Jiang, Erik Lie, and Tingting Que. 2017. “The Effect of Labor Unions on CEO Compensation.” Journal of Financial and Quantitative Analysis 52, no. 2: 553–582. https://doi.org/10.1017/S0022109017000072.

Jackson, C. Kirabo, Rucker C. Johnson, and Claudia Persico. 2016. “The Effects of School Spending on Educational and Economic Outcomes: Evidence from School Finance Reforms.” The Quarterly Journal of Economics 131, no. 1: 157–218. https://doi.org/10.1093/qje/qjv036. 

Jackson, C. Kirabo, and Claire L. Mackevicius. 2023. “What Impacts Can We Expect from School Spending Policy? Evidence from Evaluations in the United States.” American Economic Journal: Applied Economics 16, no. 1: 412–446. https://doi.org/10.1257/app.20220279.

Johnson, Theodore R., and Max Feldman. 2020. The New Voter Suppression. Brennan Center for Justice, January 2020. 

Kaufman, Dan. 2018. “A Labor Day Reflection on Unions, Race, and Division.” The New Yorker, September 3, 2018.

KFF. 2026. Health Insurance Coverage of Population Ages 0-64: 2024. Accessed May 4, 2026. 

Knepper, Matthew. 2020. “From the Fringe to the Fore: Labor Unions and Employee Compensation.” The Review of Economics and Statistics 102, no. 1: 98–112.

Ma, Jennifer, Matea Pender, and Xiaowen Hu. 2025. Trends in College Pricing and Student Aid 2025, College Board.

McNicholas, Celine, Margaret Poydock, and Lynn Rhinehart. 2021. “Why Workers Need the Protecting the Right to Organize Act” (fact sheet). Economic Policy Institute, February 9, 2021.

McNicholas, Celine, Margaret Poydock, and Heidi Shierholz. 2026. Workers’ Resolve Drives Increase in Unionization in 2025. Economic Policy Institute, February 2026.

McNicholas, Celine, Margaret Poydock, Heidi Shierholz, and Hilary Wething. 2025. Unions Aren’t Just Good for Workers—They Also Benefit Communities and Democracy. Economic Policy Institute, August 2025.

Nack, David, Michael Childers, Alexia Kulwiec, and Armando Ibarra. 2019. “The Recent Evolution of Wisconsin Public Worker Unionism Since Act 10.” Labor Studies Journal 45, no. 2: 147–165. https://doi.org/10.1177/0160449X19860585.

Nanda, Vikram, Takeshi Nishikawa, Andrew Prevost. 2025. “The Impact of Unions on Compensation Consultants and CEO Pay.” Financial Management 54, 89–122. 
https://doi.org/10.1111/fima.12472.

Pierce, Michael. 2017. The Origins of Right-to-Work: Vance Muse, Anti-Semitism, and the Maintenance of Jim Crow Labor Relations. The Labor and Working-Class History Association, January 12, 2017.

Rosenfeld, Jake, Patrick Denice, and Jennifer Laird. 2016. Union Decline Lowers Wages of Nonunion Workers. Economic Policy Institute, August 2016. 

Securities and Exchange Commission. 2007. “Executive Compensation” (web page). Last modified January 4, 2007.

Sherer, Jennifer. 2026. Holding the Line: Rights to Unionize and Collectively Bargain. Economic Policy Institute, February 2026.

Sherer, Jennifer, and Elise Gould. 2024. “Data Show Anti-Union ‘Right-to-Work’ Laws Damage State Economies.” Working Economics Blog (Economic Policy Institute), February 13, 2024.

Sherer, Jennifer, and Monique Morrissey. 2026. Stronger Collective Bargaining Laws Will Benefit All Virginians. Economic Policy Institute, January 2026.

Shierholz, Heidi. 2024. “Middle-Out Economics Is Good for Workers, Their Families, and the Broader Economy.” Working Economics Blog (Economic Policy Institute), March 19, 2024.

Sojourner, Aaron, and Adam Reich. 2025. “Americans Favor Labor Unions Over Big Business Now More Than Ever.” Working Economics Blog (Economic Policy Institute), May 20, 2025. 

Stelzner, Mark, Eric Hoyt, and Toushita Ramchurn. 2019. Structured Conflict: Changes in Federal and State Labor Laws and Strike Activity, 1950 to 2017. Political Economy Research Institute (PERI), University of Massachusetts Amherst, May 2019.

United States Department of Agriculture (USDA). 2017. “2015 Expenditures on Children By Families” (web page). Accessed June 30, 2026.

Van Green, Ted. 2025. “Majorities of Adults See Decline of Union Membership as Bad for the U.S. and Working People.” Pew Research Center, August 27, 2025. 

Zhang, Elizabeth. 2026. Nearly 3 Million Uninsured Adults Would Gain a Path to Medicaid Coverage if Their States Adopted ACA Medicaid Expansion. Center on Budget and Policy Priorities, March 19, 2026.

A note about terminology

Topics covered in this FAQ often involve specialized uses of language, reflecting both legally defined concepts and/ or “terms of art” typically used by practitioners. For definitions of key terms, check out the glossary at the end of this report.

What is sectoral bargaining?

Sectoral bargaining is a form of collective bargaining in which one or more unions bargains with multiple employers to reach a legally binding agreement on common standards that then apply to all workplaces across a particular industry, sector, or region.

Sectoral bargaining has not traditionally been part of labor law frameworks in the U.S., but it is not a new concept and has historically been an effective model for setting wages and standards in various sectors across many European countries. The sectoral approach to collective bargaining offers a different approach from the traditional U.S. “firm/enterprise level” model of bargaining in which unionized workers in a single workplace bargain with their employer to set wages and working conditions.

What conditions are motivating growing interest in sectoral bargaining in the U.S.?

In recent years, interest has grown in the question of whether sectoral bargaining or sectoral approaches to setting wages and other standards might enable U.S. workers to combat declining union density and rebuild bargaining power necessary to raise wages and improve conditions across what has become a highly unequal economy. Calls for expanding sectoral strategies are typically motivated by recognition of two closely related trends:

• Growing numbers of workers who wish they had a union contract are facing obstacles to forming or joining a union under existing weak and outdated labor laws.
• Growing numbers of workers are experiencing low wages and poor working conditions in industries in which it is especially difficult to unionize—for example because they lack employee status, are highly dispersed and isolated, work for a franchise, are hired via temp or staffing agencies, or perform “gig work” assigned via a digital app.

The National Labor Relations Act (NLRA or Act)—the primary federal law establishing union rights in the private sector—has as its premise a lofty and admirable goal: “encouraging the practice and procedure of collective bargaining” between workers and their employers. Since the Act’s passage in 1935, millions of workers have won higher pay, better health care and retirement benefits, stronger health and safety protections on the job, and other important improvements through forming unions and using their collective strength to bargain with their employers. Historically, strong unions have helped ensure that income growth is distributed broadly and not just to the wealthiest households.

But the NLRA has been significantly weakened since its passage through a series of congressional and court actions, and today’s broken federal labor law is failing to live up to the NLRA’s originally stated goal. For example, data show a growing mismatch between the millions of workers who say they want a union and the relatively small number of workers who actually have one. Union membership in the U.S. ticked up slightly in 2025, breaking a decades-long trend of declining unionization. But today’s unionization rate of 11.2% is less than a third of what it was in the 1950s when union strength delivered broadly shared prosperity and a thriving middle class, and lower than in 1935 when the NLRA was first enacted.

One of the consequences of this decline in union strength in the U.S. is a corresponding decline in the ability of unions in a particular sector or industry to set broad wage and benefit standards covering a large percentage of workers in that sector or industry. When unions were stronger, they were able to align the structure of collective bargaining with the corporate structure in their industry and negotiate agreements with large employers that established wage standards for an entire industry. Union contracts established wages for unionized workers, and nonunion employers raised wages to stay competitive. In this manner, unions helped raise wages for all workers, both union and nonunion.

What does existing U.S. labor law say about sectoral bargaining? What kinds of sectoral bargaining are already possible under current labor laws?

U.S. labor law places some obstacles in front of workers and unions seeking to bargain broadly with multiple employers in their industry. Specifically, the National Labor Relations Act has long been interpreted as establishing a single worksite and a single employer as the default unit for bargaining. Workers and unions can try to win a broader bargaining unit, such as a multifacility bargaining unit of the same employer, but to do so, they need to persuade the National Labor Relations Board (NLRB) of the appropriateness of the larger unit and organize support from a majority of employees in the bigger unit. 

Likewise, under current law workers and unions can propose but cannot insist that employers in their industry bargain together on a multiemployer basis with the union or a group of unions. Basically, workers and unions are limited in taking this multiemployer approach, even though when achievable, it enables coordinated bargaining within a sector or industry and prevents employers from pitting workers and unions at different locations against one another.

Still, even within constraints posed by existing U.S. labor law, there are many examples (both historical and contemporary) of unions using collective power to win and maintain bargaining agreements that cover workers beyond an individual workplace. Unions have achieved this through national agreements, through multiemployer bargaining, and through campaigns that use both policy changes and bargaining power to set standards for workers beyond those directly covered by a contract. Examples of these successes include union contracts that cover grocery workers across all major grocery chains in some regions, and the long-standing practice in the construction trades of multiple unions bargaining national, regional or local multiemployer master agreements with employer associations.

What policy changes would be necessary to achieve wide-scale, comprehensive sectoral bargaining in the U.S.?

Engaging employers and unions in comprehensive sectoral bargaining to set standards covering major industries across the U.S. would require federal legislative reform because the National Labor Relations Act, as currently interpreted, is too narrow and restrictive to facilitate sectoral bargaining. 

More modest changes to federal law could empower workers and unions to designate larger, multiemployer bargaining units for the purposes of collective bargaining, unless the employer can demonstrate a compelling reason why a broader unit is not workable. This would enable larger groups of workers and unions to pursue more sectoral approaches to bargaining in their industries. 

Even without major federal labor law reform, promising intermediate pathways to raising sectoral standards could include union-strategic organizing initiatives to increase union density in key industries and geographies. Many unions—even within the constraints of existing labor laws—have successfully used combinations of collective bargaining, organizing, and policy power to raise standards for groups of workers far beyond those they directly represent (see examples above). Under existing labor laws, unions can build toward forms of sectoral bargaining through organizing critical masses of workers in a particular industry or region, pursuing multiemployer collective bargaining agreements, and/or pursuing policy changes that effectively extend the wages and benefits unionized workers have won to other employers across an industry or region.

In addition, state and local governments have some limited legal authority to enact sectoral bargaining policies for workers who currently lack employee status under the National Labor Relations Act. Examples of such policies include state sectoral bargaining frameworks recently enacted to cover rideshare drivers in Massachusetts (2024) and California (2026) and similar legislation awaiting the governor’s signature in Illinois (see Appendix Table 1 for details on these policies). State and local governments also have broad latitude to pursue sectoral standard setting via wage/standards boards that, if well designed, can engage unions representing workers in key industries in the standard-setting process (see Appendix Table 2 for details on these state and local policies).

Other policy approaches to strengthening sectoral standards include expanding prevailing wage laws that apply to all employers receiving public contracts to perform work in a given industry or enacting sectoral minimum wage policies that raise the wage floor in a given industry.

What’s the difference between sectoral bargaining and a sectoral wage board or standards board?

Sectoral bargaining involves negotiations between one or more unions and a group of employers in a particular sector or industry to establish wages, benefits, and other working standards in the sector or industry. Beyond setting guidelines for the process, the government is typically not involved directly in the bargaining, though government may play a role in approving or implementing resulting agreements. 

In contrast, the government is heavily involved in sectoral wage boards or standards boards. Historically, wage boards in the U.S. context have typically brought together representatives of workers and employers to make recommendations to a government agency or legislative body on wages and other standards for their particular industry. Policymakers then consider the recommendations and potentially adopt them as standards that apply to all employers in the particular sector or industry. In some cases, wage/standards boards have authority to set certain standards more directly.

Unlike sectoral bargaining, wage boards have an established federal policy history in the U.S. For example, following the passage of the Fair Labor Standards Act (FLSA) in 1938, the federal government established several “industry committees,” focused primarily on low-wage sectors like garment and textile manufacturing. For a short period these industry committees helped raise wage floors in many low-wage sectors (thereby improving conditions for union organizing among some groups of workers), until they were disbanded in the late 1940s as part of a political compromise to secure a federal minimum wage increase.

As detailed in Appendix Table 2, examples of new sectoral wage or standards boards created by state or local governments in the past decade reflect highly variable policy designs, but government roles are central in each of them. Because government plays such a key role in the adoption, implementation, and enforcement of sectoral standards developed by wage boards, this process is sometimes referred to as sectoral co-regulation, to more clearly distinguish it from traditional collective bargaining, which is a private negotiation process between employers and unions.

What roles do unions play in sectoral bargaining versus wage boards/standards boards? 

Sectoral bargaining is a form of collective bargaining. In sectoral bargaining, a union (or unions) representing workers from a given sector is at the bargaining table negotiating directly with a group of employers, and agreements reached by the parties cover all employers in the sector or industry. The sectoral agreement sets a uniform “floor” for standards across the industry, and the union then supplements these sectoral agreements via negotiations at the local workplace level in locations where workers are unionized. Unionized workers are directly represented in the bargaining process (at the sectoral and the local levels) and have the opportunity to shape bargaining priorities and outcomes via participation in the union’s internal democratic decision-making processes.

Union roles in sectoral co-regulation (by means of participation in a wage or workforce standards board) can vary, depending on how a particular board is designed, the political context in which a board operates, and the degree to which particular unions take initiative to engage with the board process and/or engage members in providing input to any union representatives serving on the board.

For example, one version of this process might be that a union representative appointed to a wage board (alongside other board members representing employers and government) takes part in the process of analyzing and recommending wage standards that the board then submits to a government agency for final review, approval, and implementation. Unlike the process of collective bargaining, union members are typically not directly involved in deciding who represents workers on a wage board or in approving the standards a wage board recommends.

Union representation on a wage board may be required as a matter of policy or left to the discretion of those with authority to appoint board members. In most cases, wage board members are appointed by a government official—typically a governor, a legislative leader, or labor agency leader—meaning the appointments are part of a political process and can change based on changes in elected or agency leadership. Wage boards generally specify a certain number of seats for worker and/or union representatives, and in most cases, some but not all unions in a sector or industry are represented on a given board. See Appendix Table 2 for recent examples of how state or local sectoral standards boards have been structured.

Does sectoral bargaining lead to increased union membership and more worker power? 

Where achievable, strong sectoral bargaining systems have some clear advantages over enterprise-level bargaining in rebalancing labor market power and potentially creating more favorable economic conditions for worker organizing. Sectoral agreements that set wages and workplace standards across an entire industry can curb the ability of individual employers to pit workers (as well as state and local governments) against each other in a race to the bottom on wages and standards. By removing wages and basic standards from competition, sectoral bargaining can in turn reduce anti-union hostility of employers who are otherwise inclined to take extreme steps to prevent workers from unionizing in order to suppress wages and benefits.

On other dimensions of worker power—including the ability of unions to build membership, engage workers in addressing concerns particular to their own workplaces, and maintain strong worker-led organizations capable of enforcing negotiated standards on the ground—firm/enterprise models of bargaining may have distinct advantages. Because negotiated sectoral standards apply whether or not a worker in the sector is a member of a union, under a sectoral agreement, large majorities of workers are likely to gain the financial benefits of coverage without contributing financially to the union and without opportunities to participate in union decision-making or organizing in their own workplace.

Because sectoral and enterprise/workplace approaches to collective bargaining differ in scope and scale and produce different (highly complementary) economic and institutional benefits, an ideal labor-policy framework would include mechanisms to facilitate both.

Significant worker organizing is likely a precondition for large-scale forms of sectoral bargaining to emerge as a successful policy option in the U.S. Sectoral bargaining requires the presence of a representative union to engage in the bargaining process with employers. Successful sectoral bargaining models require that unions possess and maintain some degree of political power, rooted in the ability to organize and represent a significant base of workers. When unions are unable to sustain organizational power and political influence, gains won via sectoral strategies can quickly be lost, and sectoral bargaining systems themselves can become fragile.

Does sectoral standard-setting via wage boards or standards boards lead to increased union membership and more worker power?

There is no inherently direct relationship between wage boards/standards boards and unions or the unionization process. So, the answer to this question depends on many factors, including how boards are designed, how much strength unions already have (or are able to build) in a particular sector or region, and how much capacity unions have to engage with a sectoral board and leverage new standards as part of union organizing initiatives (which are carried out independently outside of the board process). Available examples further illustrate that details of board design are critical to determining outcomes, including the degree to which effective sectoral standard-setting occurs, the degree to which unions are engaged in the standard-setting process, and whether the presence of sectoral standards can help decrease obstacles to union organizing.

While there is no automatic connection between establishment of a standards board and increased unionization, examples also suggest that well-designed standards boards can help create more favorable conditions for union organizing. The process of creating and participating in a wage/standards board can present opportunities for unions to increase communication with and the involvement of both existing members and nonunion workers in the affected sector who may be interested in unionizing. Likewise, in cases in which a board has authority to set and enforce a strong legally binding “floor” for wages and conditions across an industry, these standards can help decrease the incentive for low-road employers to engage in intense anti-union tactics to block worker organizing, since such employers can no longer maintain a competitive advantage based primarily on their ability to suppress wages and benefits. Unions’ roles in winning better wages and standards won via participation in an effective sectoral wage/standards board can in turn be publicized to nonunion workers and leveraged in union-organizing campaigns.

Whether a particular wage/standards board can achieve effective sectoral standard setting and contribute in this way to rebalancing labor market power depends on the details of its design and the engagement of strong unions in the standard-setting process. Newly established state and local boards reflect a wide array of approaches to policy design (see Appendix Table 2 for examples), including variations in how workers or unions are represented on boards and the scope of each board’s authority. For example, early evidence suggests that some new state boards, like Minnesota’s Nursing Home Workforce Standards Board, are achieving greater effectiveness due to certain policy design elements, such as an ability to hire dedicated staff, a clear process for state adoption of new standards, and mechanisms for worker-led enforcement of new standards (such as “know your rights” training).

Based on available state and local examples, factors most associated with a standards board leading to increased union density likely include:

• strong policy design that requires union representation on the board and gives the board clear authority and necessary resources to set, implement, and enforce standards
• presence of already strong unions, capable of effectively representing worker interests on the board and ensuring that the board carries out its intended mission
• the presence of strong unions in the industry with significant organizing capacity and commitment to a strategic organizing program focused on unionizing more workers in the industry

How is sectoral bargaining approached under new state laws covering rideshare drivers?

So far, the only sectoral bargaining policies in place in the U.S. are recently enacted state laws covering rideshare drivers in Massachusetts (2024) and California (2026). A similar law passed by the Illinois legislature is, as of publication, awaiting the governor’s signature. These laws create a state-administered system for facilitating sectoral bargaining between rideshare companies and a designated bargaining representative (union) for a single bargaining unit that includes all rideshare drivers in the state. The three new laws have some variations, but all include the following key features:

• requirements for all rideshare companies (Uber, Lyft, etc.) to regularly submit lists of drivers and their contact information to the state
• process for a certain threshold of rideshare drivers (5%–10%, depending on the policy) to indicate interest (i.e., by signing union cards) in having a particular organization (union) serve as a designated bargaining representative, thereby obligating the state to share driver contact lists with the union
• process for a certain threshold of drivers (25%–50%, depending on the policy) to petition (i.e., by signing union cards) the state for certification of their union, thereby obligating rideshare companies to then collectively bargain with the certified union
• rules and procedures for parties to follow in negotiations, including requirements for parties to submit negotiated agreements to the state for approval; if approved, the terms of the negotiated agreement then apply to all drivers in the state and to any company engaging rideshare drivers in the state

These laws are too new to have been fully tested, and the California and Illinois laws have not yet taken effect. In Massachusetts, the App Drivers Union (SEIU 34BJ/IAM) was certified as the exclusive union for all rideshare drivers in the state in May 2026, obligating rideshare companies to begin bargaining. See Appendix Table 1 for additional details on new state rideshare collective bargaining laws.

Appendix Table 1

What state or local governments maintain wage boards or standards boards, and how are unions involved in these structures?

A few states have maintained laws allowing for industry-specific wage boards since the early 20th century, and these statutes have attracted renewed interest in recent years. For example, in 2015 the New York Labor Commissioner used their authority under the state’s long-standing wage board statute to convene a wage board for the fast food industry, resulting in a new $15 minimum wage covering fast food workers statewide.

The state of California operated a sectoral wage and standards board for decades through its Industrial Welfare Commission (IWC, established in 1913), until the commission was defunded by the legislature in 2004 over concerns that it was being used by employer interests to undermine updated state wage and hour laws. The IWC was briefly revived with a new infusion of state funding in 2024 and issued new wage orders covering several sectors in 2025. When in operation, the IWC consists of a five-member board, including two labor representatives, two employer representatives, and one public representative (all appointed by the governor). The IWC has authority to issue orders governing wages, hours, and working conditions and must prioritize consideration of industries in which more than 10% of the workforce is at or below the federal poverty level.

In the past decade, renewed interest in sectoral standard setting has sparked additional state and local policy experimentation with wage and standards boards. New policies in a dozen state or local jurisdictions present a range of models for board structures that include some form of representation from workers (or unions), employers, and government officials who are tasked with studying, recommending, or in rare cases, directly setting wages and standards that affect conditions of workers in specified low-wage sectors.

Formal roles for unions in recently created state or local standards boards vary, as do the levels of authority each board has to recommend or set standards. Many boards were created with direct input from unions or emerged as legislative proposals in contexts in which unions were already organizing affected workers. New state and local experiments to date suggest that wage and standards boards are most likely to help increase worker power when boards have clear authority to set standards and where unions are actively organizing in the affected sector as new standards are issued. Implementation challenges faced by some new boards, such as California’s fast food council, also illustrate that strong commitment from government leaders is a necessary condition for a wage or standards board to function effectively, especially in the face of heavy industry opposition.

For more details on these policies, see Appendix Table 2. Additionally, legislation has been introduced to create new standards boards for nail salon workers in New York and long-term care workers in Oregon; Oregon also passed legislation in 2025 to study conditions of farmworkers, as a step toward considering a farmworker standards board.

Appendix Table 2

Glossary of key terms

Bargaining unit: The defined group of workers who are included (represented by a single union or bargaining representative) in the collective bargaining process and covered by any resulting contract agreements with an employer. If a union and employer do not agree on who should be included in a particular bargaining unit, the National Labor Relations Board (NLRB) determines the composition of the unit. A bargaining unit may include all or some of the workers in a given workplace; it can be very small and narrowly defined, or very broad, depending on what a group of unionizing workers prefers, what the employer will agree to, and whether workers can persuade the NLRB to recognize a “community of interest” among workers in the proposed bargaining unit. When workers attempt to form a new union, employers often file legal objections to workers’ preferred bargaining unit and use such disputes to delay the union representation and first-contract bargaining process.

Collective bargaining and collective bargaining agreement: Collective bargaining is a process by which a group of workers, through a designated bargaining representative(s), such as a union, negotiates with their employer(s) over wages, hours, and terms and conditions of employment. Though not required under U.S. labor law, collective bargaining can involve more than one union, and it can involve more than one employer, if the parties involved agree to this arrangement. Collective bargaining is a private process between the parties (although sometimes a federal or private mediator will be involved in assisting the parties in reaching an agreement). Agreements reached by the parties through their negotiations are memorialized in a “collective bargaining agreement,” which is a formal, legally binding contract between the parties.

Enterprise bargaining: Collective bargaining between workers, through their designated representative (union) and their employer, covering workers at a single facility. Enterprise bargaining is the default approach to bargaining under the National Labor Relations Act.

Multiemployer bargaining: Collective bargaining between one or more unions and a group of employers (typically operating through an employer association for their industry or a designated employer representative). Agreements reached by the parties in bargaining apply to all employers who have agreed to the multiemployer arrangement, but not to other employers (although they can agree later to be added to the agreement). Multiemployer bargaining is a voluntary arrangement—workers and unions cannot force an employer to bargain in this manner, as the NLRA does not legally require it. Multiemployer bargaining is, however, possible under current labor law and already commonplace in industries like construction, entertainment, and professional sports. Multiemployer bargaining can take place at the national, regional, or local level, depending on the structure of a particular industry and the preferences of the parties.

National agreement or master agreement: Unions and larger employers sometimes bargain a national agreement (sometimes referred to as a “master agreement”) that covers all unionized facilities of the employer, resulting in a collective bargaining agreement broader than the typical enterprise-level agreement. National agreements are effective at establishing uniform wage and benefit standards across an employer’s operations. These agreements are often supplemented at the local level by local agreements addressing particular issues at that location. Examples would include contracts negotiated between the United Auto Workers union and each of the “Big Three” automakers (Ford, GM, and Stellantis), between the Teamsters union and UPS, or between postal unions and the U.S. Postal Service.

Prevailing wage laws: Prevailing wage laws set a uniform minimum wage that employers must pay to workers on a project. Typically, prevailing wage laws apply to employers on government-funded projects to ensure that public investments support the creation of good jobs and do not drive down wages in the industry. Prevailing wage laws exist at the federal, state, and local levels and are a well-established means of setting strong wage standards across an industry that cover both unionized and nonunion workers.

Sectoral bargaining: Collective bargaining between one or more unions and a representative group of employers in a sector or industry to set wage and benefit standards for the sector or industry. Agreements reached by the parties apply to all employers in the sector or industry. There is currently no mechanism for sectoral bargaining in the National Labor Relations Act, but it is common in many European countries.

Sectoral co-regulation: Regulatory systems, such as wage boards or workforce standards boards, designed to facilitate setting of labor standards at the sectoral level with the participation of worker representatives and employers alongside public officials.

Tripartite: Tripartite refers to a process through which representatives of three parties— workers, employers, and the government—work to address an issue. Tripartite processes are a common feature of labor relations in many European countries. With the exception of a few state and local wage or standards boards, tripartite processes are rare in the U.S., and there is no formal mechanism for them to operate in the labor relations system under U.S. labor law. 

Wage board or standards board: Wage boards (sometimes also called worker(s) boards, labor standards boards, industry standards boards, industry councils, or workforce standards boards) are established by legislative or executive branch action in order to study, recommend, and/or set minimum standards for wages (and sometimes other working conditions) in a particular industry. Typically, such boards have a “tripartite” structure, meaning they include representatives of workers, employers, and government agencies as participating members. The structural design and effectiveness of such boards, including the degree of authority they have to set or implement standards, can vary widely (see Appendix Table 2 above for examples). Standard setting via a wage board process differs from traditional collective bargaining in that the government is involved in appointing members of the board and in approving and implementing any board recommendations on standards (unlike collective bargaining, which is a private process between unions and employers). Any standards resulting from a wage board process apply to all employers in the industry, whereas agreements reached through traditional collective bargaining apply only to the employer(s) involved in and are covered by the collective bargaining agreement. Because wage boards are essentially a government process with participation by workers and employers, they are sometimes referred to as “sectoral co-regulation.”

Works council: A works council is a committee of elected worker representatives that advocates for workers’ interests with their employer at the workplace level. Works councils are common in the labor relations systems of many European countries as an enterprise-level complement to industry or sectoral bargaining conducted by labor unions. This labor relations structure differs from the U.S. system, and works councils are generally not allowed under U.S. labor law, which prohibits employer domination, interference, or support of labor organizations (including works councils).

Director, Product Classification
U.S. Postal Service
475 L’Enfant Plaza S.W., Room 4446
Washington, DC 20260-5015
PCFederalRegister@usps.gov 

Re: Proposed Rule: Ballot Mail for Federal Elections

The Economic Policy Institute (EPI) is a nonprofit, nonpartisan think tank that for 40 years has centered working families in economic policy discussions. EPI is submitting these comments in response to the Postal Service’s proposed rule on Ballot Mail for Federal Elections,1 which would have a disparate impact on Americans who face barriers to voting in person, including workers with disabilities, working parents, and workers with long and unpredictable work shifts. For this and other reasons outlined below, we believe that the proposed rule should be abandoned permanently and in its entirety.

The proposed rule follows a March 31, 2026, executive order from President Trump2 that would require the Postal Service to set new standards for the design of ballot envelopes used by state and local jurisdictions to facilitate centralized tracking of ballots to and from individual voters, thus encroaching on the authority to regulate and administer elections that the Constitution assigns to Congress and the states. The proposed rule also directs the Postal Service to compile a national voter list from state voter rolls and to reject ballots addressed to voters who are not on the list or that do not conform to the new envelope standard.

Tellingly, the proposed rule does not instruct the Postal Service to notify voters whose ballots were not delivered so that voters can challenge these decisions and correct errors caused by typos and similar discrepancies, which are vastly more common than deliberate fraud. Discrepancies and gaps in government records are not purely random, but are more likely to affect people with uncommon or hyphenated names (including many foreign-born citizens), married women who changed their names, and elderly and low-income Americans, among others.3

The proposed rule would misuse government data for political purposes.

The proposed rule should be viewed in the larger context of actions taken by this administration to use government data for unauthorized purposes, including voter suppression.

In addition to directing the Postal Service to compile a list of registered voters and use it to restrict mail voting, other provisions of the president’s executive order direct the United States Citizenship and Immigration Services (USCIS) and the Social Security Administration (SSA) to compile lists of voting-age citizens in each state, even though there is no evidence that fraudulent voting by noncitizens is a problem in U.S. elections.4 However, purging voter lists of suspected noncitizens could be used to disenfranchise eligible voters.

A case pending before the U.S. Supreme Court that would weaken the National Voter Registration Act could enable voter purges of suspected noncitizens close to elections when voters have little time to challenge errors that are common in such purges.5 Since some groups are more likely to vote for particular parties, purges can be weaponized for partisan advantage, a problem that would be magnified if done on a national scale.

The executive order adds to previous efforts by this administration to use SSA and other sensitive personal data for purposes beyond their intended use. It also risks another data breach in violation of federal privacy laws similar to an earlier breach of SSA data by a DOGE operative.6

The proposed rule would discourage voting by mail and harm working families who are more likely to face barriers to in-person voting.

Importantly, the harm inflicted by the proposed rule would extend beyond eligible voters who are directly prevented from voting by mail because they do not appear on the Postal Service list of registered voters. By casting doubt on the integrity and impartiality of mail voting, the rule would increase the number of voters dissuaded from voting by mail who later find themselves unable to vote in person.

Thirteen states, along with Puerto Rico and the Virgin Islands, restrict absentee voting to voters who know they will be out of the county on election day, or, in some states, who face barriers related to age, health, disability, work schedules, or other conflicts, such as jury duty.7 In my personal capacity as a volunteer on a voter assistance hotline, I can attest that many, if not most, people who face barriers to in-person voting could not have predicted them in advance. Voters frequently fall sick, face long lines at the polls that threaten to make them late for work, or find themselves with last-minute childcare and transportation problems.

Even voters who face predictable barriers that are valid reasons for absentee voting in their state can find it difficult to determine whether they qualify since specifics are not spelled out or are buried in dense legal language. What counts as a disability? Is documentation required? What if an anticipated work shift, jury duty, or vacation does not happen?

As the Institute for Policy Studies has pointed out, working-class voters are more likely to face barriers to voting in person due to work and family obligations.8 The Shift Project at the Harvard Kennedy School has documented the large number of low-wage workers, disproportionately workers of color, who work long and unpredictable shifts with little input into their schedules.9 In-person voting hours vary by state, but typically span a 12- or 13-hour time period.10 For working parents transporting children to school, workers with long commutes, and workers who face mobility challenges, it can be difficult if not impossible to vote in person within the designated window, especially if lines at the polls are long. Though some white-collar workers face these challenges, low-wage workers are less likely to work from home, have predictable schedules, or be given flexibility by employers to vote.

The Postal Service should scrap the proposed rule.

The above-mentioned constitutional, voting rights, and logistical problems with the proposed rule have been described in lawsuits and in commentary from a wide range of stakeholders and perspectives, including Lawfare,11 the Cato Institute,12 and the American Postal Workers Union.13 Twenty-three states and the District of Columbia successfully sued to temporarily block the executive order on which the proposed rule is based.14 However, the administration has said they will challenge the ruling, and regardless the rule could still take effect after the upcoming November election (the focus of the temporary injunction).

EPI believes that the proposed rule should be abandoned permanently and in its entirety for the following reasons:

• It is an unlawful attempt by the executive branch to seize control of elections from states and Congress.15
• It would inflict reputational damage on the Postal Service by involving it in decisions about who can and cannot receive ballots and vote by mail.16
• It would impose financial and logistical burdens on the Postal Service, which is already stretched to its limit.17
• It could jeopardize the timely delivery of all mail ballots, including those that conform to the requirements of the rule.18
• In combination with other provisions of the executive order, it could facilitate systematic voter purges for partisan advantage.
• It would cast doubt on the integrity and impartiality of mail voting.
• It would dissuade eligible voters from voting by mail, many of whom will face barriers to voting in person.

The Postal Service is an independent agency that, by design, is not under the direct control of the president and therefore not subject to his executive order.19 It has impartially delivered mail ballots to voters since the Civil War, when states introduced absentee voting for soldiers, a right later extended to other absentee voters. Some states have also extended vote by mail to voters who face specific barriers to in-person voting, such as people with disabilities. Other states and the District of Columbia have gone much further, mailing ballots to all registered voters. This is by far the fairest solution, but until it is the law of the land, we should work to extend, not restrict or suppress, mail voting.

Respectfully submitted,

Monique Morrissey
Senior Economist

Endnotes 

1. “Ballot Mail for Federal Elections: A Proposed Rule by the Postal Service on 06/02/2026,” Federal Register Published Document: 2026-10968 (91FR 32915). https://www.federalregister.gov/documents/2026/06/02/2026-10968/ballot-mail-for-federal-elections

2. Donald J. Trump, “Ensuring citizenship verification and integrity in federal elections,” March 31, 2026. https://www.whitehouse.gov/presidential-actions/2026/03/ensuring-citizenship-verification-and-integrity-in-federal-elections/

3. Monique Morrissey and Daniel Costa, “Cleaning up administrative records or targeting immigrants?” https://www.epi.org/blog/cleaning-up-administrative-records-or-targeting-immigrants/ 

4. See, for example, Wren Orey, Theresa Cardinal Brown, Feyisayo Oyolola, and Theo Menon, “Four Things to Know about Noncitizen Voting,” Bipartisan Policy Center, February 20, 2026. https://bipartisanpolicy.org/article/four-things-to-know-about-noncitizen-voting; Michael Waldman, “Why the Myth of Noncitizen Voting Persists,” Brennan Center for Justice, August 21, 2024. https://www.brennancenter.org/our-work/analysis-opinion/why-myth-noncitizen-voting-persists. Stephen Richer, “Trump’s Claims About Noncitizens Voting Are False. We Can Prove It.” Cato Institute, February 5, 2026. https://www.cato.org/commentary/trumps-claims-about-noncitizens-voting-are-false-we-can-prove-it

5. Jim Saksa, “Supreme Court will hear Arizona case that could badly weaken key federal law protecting voter registration,” Democracy Docket, June 29, 2026. https://www.democracydocket.com/news-alerts/supreme-court-will-hear-arizona-case-that-could-badly-weaken-key-federal-law-protecting-voter-registration/

6. Stephen Fowler and Jude Joffe-Block, “The Trump administration admits even more ways DOGE accessed sensitive personal data,” Weekend Edition, National Public Radio, January 30, 2026. https://www.npr.org/2026/01/23/nx-s1-5684185/doge-data-social-security-privacy

7. National Council of State Legislatures, Table 2: Excuses to Vote Absentee, website accessed July 2, 2026. https://www.ncsl.org/elections-and-campaigns/table-2-excuses-to-vote-absentee

8. Sarah Anderson, “Attacks on Mail Voting are Attacks on the Working Class,” Institute for Policy Studies, April 6, 2026. https://ips-dc.org/attacks-on-mail-voting-are-attacks-on-the-working-class/

9. Daniel Schneider and Kristen Harknett, “It’s About Time: How Work Schedule Instability Matters for Workers, Families, and Racial Inequality,” October 16, 2019. https://shift.hks.harvard.edu/its-about-time-how-work-schedule-instability-matters-for-workers-families-and-racial-inequality/

10. Ballotpedia, “State Poll Opening and Closing Times (2026),” website accessed July 2, 2026. https://ballotpedia.org/State_Poll_Opening_and_Closing_Times_(2026)

11. Molly Roberts, “What’s up with Trump’s Mail-In Voting Executive Order?” Lawfare, Monday, June 29, 2026. https://www.lawfaremedia.org/article/what-s-up-with-trump-s-mail-in-voting-executive-order

12. Stephen Richer, “USPS Issues Proposed Mail Voting Rules Pursuant to Trump Executive Order,” Cato at Liberty blog, May 29, 2026. https://www.cato.org/blog/usps-issues-proposed-mail-voting-rules-pursuant-trump-executive-order

13. Jonathan Smith, APWU Comments on Proposed Rule: Ballot Mail for Federal Elections, June 29, 2026. https://apwu.org/wp-content/uploads/2026/06/APWU-Comments-VBM-Rulemaking.pdf

14. Dion Nissenbaum, “Federal judge blocks key pillars of Trump executive order restricting mail voting in 2026 election,” VoteBeat, June 25, 2026. https://www.votebeat.org/national/2026/06/25/trump-election-overhaul-mail-voting-executive-order-blocked-talwani-usps-dhs/

15. Molly Roberts, “What’s up with Trump’s Mail-In Voting Executive Order?” Lawfare, Monday, June 29, 2026. https://www.lawfaremedia.org/article/what-s-up-with-trump-s-mail-in-voting-executive-order

16. Smith, op. cit.

17. Ibid.

18. Ibid.

19. Ibid.

June 22, 2026

Daniel Navarrete
Director of the Division of Regulations, Legislation, and Implementation
Wage and Hour Division
U.S. Department of Labor
Room S-3502
200 Constitution Avenue NW
Washington, DC 20210

Re: Proposed Rule: Joint Employer Status Under the Fair Labor Standards Act, Family and Medical Leave Act, and Migrant and Seasonal Agricultural Worker Protection Act (RIN 1235-AA48)

Dear Mr. Navarrete,

We write to submit this comment on behalf of the Economic Policy Institute (EPI), responding to the Department of Labor’s proposed rule on Joint Employer Status Under the Fair Labor Standards Act (FLSA), Family and Medical Leave Act (FMLA), and Migrant and Seasonal Agricultural Worker Protection Act (MSPA). EPI is a nonprofit, nonpartisan think tank created in 1986 to include the needs of low- and middle-income workers in economic policy discussions. EPI conducts research and analysis on the economic status of working America, proposes public policies that protect and improve the economic conditions of low- and middle-income workers, and assesses policies with respect to how well they further those goals.

EPI strongly opposes the Department of Labor’s (DOL’s) proposed rulemaking and urge the agency to withdraw this rule. If implemented, we conservatively estimate this rule would cost workers roughly $1 billion annually through increases in workplace fissuring and exposure to wage theft. Further, the FLSA’s joint employer definition is also used to apply protections under FMLA, MSPA, the Providing Urgent Maternal Protections (PUMP) for Nursing Mothers Act (now part of the FLSA), and the Equal Pay Act. Under the proposed rule, workers thus would not only be at risk of losing full protections to their right to earn the minimum wage over overtime pay, but also their right to unpaid but job-protected family and medical leave, pay discrimination protections, and the right to pump breastmilk while at work. Agricultural workers, already operating in notoriously underpaid and hazardous conditions, will also find it harder to enforce or get compensation for violations of their rights to the basic pay and housing requirements for agricultural workers under MSPA. Because of the broad impacts of structural racism and sexism on labor market outcomes, women and people of color are overrepresented in low-wage jobs overall, which are particularly vulnerable to fissuring and wage theft. As a result, women workers and workers of color are likely to be disproportionately harmed if this rule is finalized.

The proposed rule would undermine the original intent of the FLSA

At its most basic, the joint employer standard simply requires that when multiple employers co-determine or share control over a workers’ terms of employment (such as pay, schedules, and job duties), each of those employers is responsible for compliance with worker protection laws. Given the realities of the modern workplace, in which employees often find themselves subject to more than one employer, workers deserve a joint employment standard under the FLSA that guarantees these basic rights and protections.

As the American Civil Liberties Union (ACLU) has argued in their joint comments, also cosigned by EPI, the NPRM contravenes the statutory definition of “employ” under the FLSA, Supreme Court precedent. This rule also shares the same substantive defects as DOL’s 2020 Final Rule, which was largely invalidated by a federal district court in New York v. Scalia, 490 F. Supp. 3d 748 (S.D.N.Y. 2020).

EPI has conducted extensive research and policy analysis on the harms to workers from weakened labor standards and weakened enforcement of those standards. There is no question that this proposed rule would weaken labor standards. As with the first Trump administration’s attempt at weakening these regulations, this rule would dramatically narrow the set of circumstances whereby a firm can be found to be a joint employer under the FLSA. The FLSA is our nation’s fundamental worker protection statute, providing wage and hour protections to the vast majority of U.S. workers. The FLSA was drafted broadly, and its definition of an employer was intended to cover most workplaces and most workers. The intention was and should remain that companies that use staffing agencies, temporary workers, or subcontractors in their business operations are held accountable for complying with the FLSA’s basic provisions, including minimum wage, overtime, and child labor protections. The proposed rule will make it nearly impossible for many workers in those types of workplaces to enforce these rights. It would also take away the ability of workers to recover unpaid wages from firms who use undercapitalized contractors in their work.

We believe it is also important to acknowledge some of the most frequently referenced critiques of a broad, protective joint employer standard, from those who would like to see that standard weakened. One argument, already present in some of the comments that the Department has received on this rule, is that this weakened standard is necessary to provide regulatory clarity for franchisee employers in particular. The International Franchise Association, for example, says this proposed rule “protects the independence of franchise small businesses.”1 However, these arguments obscure the fact that it is already large corporate franchisors who stand to benefit the most from having this “independence” protected.

Franchisee operators already bear the full responsibility for violations of the FLSA that occur on their watch, even if those violations may have been more likely to occur because of requirements or pressure exerted on them in their business agreements with the large corporate franchisors. Nothing in the FLSA’s current joint employer standard automatically labels a franchisor-franchisee relationship as a joint employment scenario. On the contrary, the longstanding joint employer standard is not one-size-fits-all, and always requires looking at multiple factors to determine how much control each entity is actually exerting on a worker. We urge the Department not to adopt a proposed rule that would continue to allow large employers to conceal their real interest—minimizing their own liability for FLSA violations—as a goal that is aligned with the best interests of small business owners and franchise operators.

The Department’s flawed economic analysis overlooks that workers will lose pay if this rule is implemented

DOL continues its misguided evaluation of the likely impacts of the proposed joint employer standard in its economic impact analysis. DOL has a responsibility to consider all relevant data in advancing this regulatory standard, but it fails to do so. The NPRM states that “the Department does not expect that there would be significant transfer effects as a consequence of the proposed rule,” explaining that “nothing in the proposed rule would reduce the wages owed to employees under the FLSA or MSPA [emphasis added].”2 

However, even if the proposed rule would not change the wages due to a worker under the FLSA or MSPA, this does not mean that the proposal will not result in transfers between employers and employees. It would, in at least two ways.

First, this rule would incentivize workplace “fissuring,” i.e., employers increasing their reliance on contractors, subcontractors, temporary help agencies, and franchises rather than hiring employees directly—a practice that suppresses workers’ wages.  The Department dismisses the idea that the rule would incentivize fissuring by essentially simply asserting that such concerns are “largely inapplicable” to this rulemaking.3  We, however, conservatively estimate that in the long run, the increase in workplace fissuring as a result of the rule would result in a transfer of at least $772.0 million from workers to employers annually. This calculation is discussed in depth below.

Second, this rule would increase losses due to wage theft by employers. The Department acknowledges that this is an issue when it states that “some workers in vertically-tiered industries may, in some cases, have more or less difficulty collecting their owed wages,” 4 but, astonishingly, dismisses this concern by stating, without evidence, that “the magnitude of this effect is unlikely to be significant.”5  We conservatively estimate that an increase in losses due to wage theft as a result of the rule will result in a transfer of at least $225.6 million from workers to employers annually. This calculation is discussed in depth below.

Putting together these two estimates—more than $772.0 million lost by workers as a result of the rule due to an increase in workplace fissuring and more than $225.6 million in losses by workers as a result of wage theft—we estimate workers will lose roughly one billion dollars ($997.6 million) annually as a result of this rule if it is finalized.

Quantifying the transfers from workers to employers due to an increase in fissuring

According to data from the Bureau of Labor Statistics’ 2023 Contingent Worker Supplement (CWS), there are 862,000 workers who work for contract firms and 945,000 workers who work for temporary help agencies.6 However, the CWS undercounts these workers. This is due in part to the fact that workers self-report what kind of firm they work for and may erroneously report that they work for the company where they are doing their work instead of for the contract firm or temporary help agency that placed them at that site. Establishment surveys—where the firm, not the worker, does the reporting—get around this problem. High-quality establishment data on employment in contract firms do not exist to our knowledge, but there are excellent establishment data on employment in temporary help agencies from the Bureau of Labor Statistics’ Current Establishment Survey (CES). These data show that there were 2.50 million workers in temporary help agencies in 2025,7 well over double (2.64 times) what is reported in the latest CWS. Adjusting the number of contract workers by the same multiple (2.64) results in an adjusted estimate of the number of contract workers of 862,000 * 2.64 = 2.28 million.

It is important to note that we believe this estimate still undercounts contract workers, because the CWS includes only one very specific type of contract worker in its count of workers employed by contract firms—workers who are usually assigned to only one client and usually work at the client’s worksite. That excludes the many contract workers who work for multiple clients (e.g., janitorial workers or IT consultants) or offsite (e.g., call center workers or industrial laundry workers). We do not attempt to quantify this undercount.

Another important form of fissuring in the workplace is the increasing reliance on franchising models. Data from the U.S. Census Bureau’s 2017 Economic Census Franchise Statistics Report show that franchise employment in 2017 in key sectors where franchising is common was 9.59 million.8  Since 2017 is the latest year these data are available, we inflate the value by the growth rate in overall payroll employment between 2017 and 2025, 8.1%, from the Current Employment Statistics establishment survey of the Bureau of Labor Statistics.9  This results in an estimated level of franchise employment for 2025 of 10.36 million.

Putting this all together, we conservatively estimate that in 2025, there were a total of 15.14 million employees working in “fissured establishments”—working for temporary help agencies (2.50 million), working for contract firms (2.28 million), or working for franchises (10.36 million). It is important to note the degree to which this estimate of the fissured workplace is likely an undercount. David Weil estimated that in 2017, 18.9 percent of private-sector production and nonsupervisory workers—20.8 million workers in 2025—were in highly fissured industries, and that if additional fissured workers in occupations and in industries with mixed use of practices were included, that share could easily double.10

Because the rule would mean that employers would be able to avoid liability for FLSA violations for many workers in fissured establishments while still substantially controlling the wages and working conditions of those workers, companies will be incentivized to restructure and outsource parts of their business. Research shows that the wage losses associated with this kind of domestic outsourcing are substantial, on the order of 5% long-run earnings losses.11 Thus the rule will result in a substantial transfer away from workers whose firms decide, as a result of the rule, to outsource the work that they do.

CES data show that the average weekly earnings of production and nonsupervisory workers in temporary help services in 2025 was $932.12 A 5% penalty (noted above) for working in a fissured workplace implies that these workers would be earning $981 if they were directly hired, a difference of $49 per week. Combined with our estimate of 15.14 million employees working for fissured establishments, we find that every percent increase in fissuring as a result of the rule would, in the long run, lead to a wage loss of $386.0 million annually.13 That means that an increase in domestic outsourcing of just 2 percent as a result of the rule—an implausibly conservative increase considering employers would newly be able to avoid liability for FLSA violations while still substantially controlling the wages and working conditions of domestically outsourced workers—would lead to a transfer of $772.0 million annually from workers to employers. Further, it is important to note that using the broader estimate, described above, of 20.8 million private-sector production and nonsupervisory workers in the fissured workplace, that number would be $1.1 billion.

Quantifying the transfers from workers to employers due to an increase in wage theft

Wage theft—the practice of employers failing to pay workers the full wages to which they are legally entitled—is a widespread and deeply rooted problem that directly harms millions of U.S. workers each year. Employers refusing to pay promised wages, paying less than legally mandated minimums, failing to pay for all hours worked, or not paying overtime premiums deprives working people of billions of dollars annually. It also leaves hundreds of thousands of affected workers and their families in poverty.14 Wage theft does not just harm the workers and families who directly suffer exploitation; it also weakens the bargaining power of workers more broadly and puts downward pressure on hourly wages in affected industries and occupations. For many low-income families who suffer wage theft, the resulting loss of income forces them to rely more heavily on public assistance programs, unduly straining safety net programs and hamstringing efforts to reduce poverty.

In 2008, Bernhardt et al. surveyed front-line workers in low-wage industries in the cities of Chicago, Los Angeles, and New York and found that two-thirds (68 percent) of these workers experienced at least one pay-related violation in any given week.15 The researchers estimated that the average cost to these workers over a year was $2,634 out of a total earnings of $17,616—15.0 percent of their wages. This adds up to a total of nearly $3 billion annually stolen across all forms of wage theft among these workers in 2008. Generalizing these three-city, 2008 results to the nationwide 2025 workforce, we estimate that low-wage workers in the U.S. lost $52.5 billion to all forms of wage theft in 2025.16

It is worth noting that though the Bernhardt et al. study is somewhat dated, more recent studies show that labor violations remain so prevalent that it is likely that simply extrapolating from the Bernhardt et al. study, as we have, will generate conservative numbers.  For example, a 2024 study out of the Shift Project at Harvard Kennedy School found that nearly all (91%) hourly service sector workers in California experienced at least one labor violation in the prior year.17

The proposed rule would increase losses due to wage theft by employers in at least three ways. Each of these impacts will be particularly acute in industries in which there is high reliance on subcontracting, temporary work, and other alternative work arrangements, where there is already a disproportionate occurrence of wage theft.18

First, the proposal would severely limit the ability of millions of workers to get justice when they are victims of wage theft. By limiting workers’ ability to recover wages from firms that contractually have the right to act with respect to the terms and conditions of employment, DOL is depriving workers of long-held rights to recover unpaid wages from their employers.

Second, there will be a reduction in wage theft deterrence caused by the reduction, as a result of the rule, of workers’ ability to recover wages. This reduction in wage theft deterrence will likely lead to an increase in wage theft.

Third, by allowing firms that hire contractors to avoid legal liability for wages, the rule would give these firms greater incentive to award contracts to undercapitalized firms that are more likely to have low bids on the basis of not paying their workers what they are owed. And, absent the legal liability stemming from being a joint employer, if the contractor goes out of business, the lead business is not liable for the lost wages of the workers. In other words, this rule would increase the incentive for firms to seek out undercapitalized contractors who will provide lower bids to the companies that use them—bids that are able to be so low because the contractors plan to steal from their workers (by underpaying them or not paying them at all).19

As described above, an estimated $52.5 billion was lost by low-wage workers to all forms of wage theft in 2025. We use several sources of data to estimate how much of that $52.5 billion was lost by workers in fissured establishments. As noted above, we conservatively estimate that in 2025, there were a total of 15.14 million employees working in “fissured establishments”—working for temporary help agencies (2.50 million), working for contract firms (2.28 million), or working for franchises (10.36 million).

To determine how many of these 15.14 million workers are low-wage, we turn to CWS microdata, which allow us to calculate the share of workers in contract firms and temporary help services who are low wage workers.  Unfortunately, microdata from the most recent (2023) CWS survey have not yet been released, so we use microdata from the 2017 CWS survey. We find that the share of workers in contract firms or in temporary help services who are low-wage—defined as earning $12 per hour or less in 2017—is 36.3 percent. Given wage growth between 2017 and 2025, $12 in 2017 was roughly equivalent to $17 in 2025.20 

Franchise workers are not identified in the CWS, so we simply assume that the share of workers in franchise firms who are low-wage is the same as the share of workers who are low-wage in contract firms and temporary help services. Multiplying 36.3% by our estimate of 15.14 million total workers in fissured establishments, we estimate that there are 5.5 million low-wage workers in fissured establishments.

There were 25.6 million workers who made less than $17 an hour in 2025,21 which means that 21.5 percent (5.5 million/25.6 million) of low-wage workers are in fissured establishments. Assuming that the incidence of wage theft among low-wage workers is no higher in fissured establishments than in traditional establishments (an extremely conservative assumption), we can simply multiply this 21.5 percent by the total amount of wage theft from low-wage workers—$52.5 billion—to estimate the amount of wage theft in fissured establishments. This comes out to $11.28 billion.

Annual wage theft of $11.28 billion in fissured establishments means that every percent increase in losses due to wage theft would lead to an aggregate transfer from workers to employers of $112.8 million annually. This means that an increase in losses due to wage theft of just 2 percent as a result of the rule—an implausibly conservative increase considering many former joint employers would newly be able to avoid liability for FLSA violations—would lead to an aggregate transfer from workers to employers every year of $225.6 million. Further, it is important to note that using the broader estimate described above of 20.8 million private-sector production and nonsupervisory workers in the fissured workplace, that number would be $309.8 million.

Conclusion

DOL’s proposed rule undermines the original intent of our nation’s fundamental worker protection laws and, if implemented, its impact on working people will be negative and significant. The proposed rule would incentivize the further “fissuring” of the workplace, putting strong downward pressure on wages, and it would make it nearly impossible for millions of workers to get justice when they are the victims of wage theft. Conservatively, we estimate that, if implemented, this rule would cost workers just under $1.0 billion annually—more than $772.0 million due to wage suppression from an increase in workplace fissuring and more than $225.6 million from an increase in wage losses due to wage theft by employers. We urge DOL to abandon this flawed rulemaking and ensure a meaningful joint employer standard under the FLSA, our nation’s fundamental worker protection law.

Sincerely,

Heidi Shierholz, Ph.D.
President
Economic Policy Institute

Samantha Sanders
Director of Government Affairs & Advocacy
Economic Policy Institute

Endnotes

1. International Franchise Association (IFA). 2026. “IFA Praises Trump Administration Joint Employer Rule” (press release). April 22, 2016.

2. 91 Fed. Reg. 21909

3. 91 Fed. Reg. 21909

4. 91 Fed. Reg. 21909

5. 91 Fed. Reg. 21910

6. Bureau of Labor Statistics, “Table 5. Employed workers with alternative and traditional work arrangements on sole or main job by selected demographic characteristics, July 2023,” Contingent and Alternative Employment Arrangements, November 2024.

7. U.S. Bureau of Labor Statistics, All Employees, Temporary Help Services [TEMPHELPS], retrieved from FRED, Federal Reserve Bank of St. Louis. Accessed June 2026 at https://fred.stlouisfed.org/series/TEMPHELPS. 

8. U.S. Census Bureau, “Franchising in America: Key Data from the 2017 Economic Census,” September 2021.

9. U.S. Bureau of Labor Statistics, All Employees, Total Nonfarm [PAYEMS], retrieved from FRED, Federal Reserve Bank of St. Louis. Accessed June 2026 at https://fred.stlouisfed.org/series/PAYEMS.

10. David Weil, “Understanding the Present and Future of Work in the Fissured Workplace Context,” Working Paper, Brandeis University, May 2019.

11. Dorn, D., Schmieder, J. F., Spletzer, J. R. (2018). Domestic Outsourcing in the United States. Chief Evaluation Office, U.S. Department of Labor; Deborah Goldschmidt and Johannes F. Schmieder, “The Rise of Domestic Outsourcing and the Evolution of the German Wage Structure,” Quarterly Journal of Economics 132, no. 3 (August 2017): 1165–1217; Arindrajit Dube and Ethan Kaplan, “Does Outsourcing Reduce Wages in the Low-Wage Service Occupations? Evidence from Janitors and Guards,” ILR Review 63, no. 2 (January 2010): 287–306.

12. Bureau of Labor Statistics, Current Employment Statistics (BLS-CES). Table B-8, Average hourly and weekly earnings of production and nonsupervisory employees on private nonfarm payrolls by industry sector, seasonally adjusted. Various years. Accessed June 2026 at https://www.bls.gov/webapps/legacy/cesbtab8.htm.

13. $386.0 million = 15.14 million * $49 * 52 weeks in a year * 1%.

14. Margaret Poydock and Jiayi (Sonia) Zhang, More than $1.5 billion in stolen wages recovered for workers between 2021 and 2023, Economic Policy Institute, December 2024; David Cooper and Teresa Kroeger, Employers Steal Billions from Workers’ Paychecks Each Year: Survey Data Show Millions of Workers Are Paid Less Than the Minimum Wage, at Significant Cost to Taxpayers and State Economies, Economic Policy Institute, May 2017.

15. Annette Bernhardt et al., Broken Laws, Unprotected Workers: Violations of Employment and Labor Laws in America’s Cities, 2009, Center for Urban Economic Development, National Employment Law Project, and UCLA Institute for Research on Labor and Employment, 2009.

16. Generalizing the three-city, 2008 results to the nationwide 2025 workforce required several adjustments. The low-wage workforce in the Bernhardt et al. study represented 15.1% of all workers in those cities, and 68% of those workers experienced at least one pay-related violation in the prior week. This implies that at least 15.1%*68% = 10.3% of all workers experienced wage theft in a given week. Data from the BLS Current Employment Statistics (CES) survey shows there were158.5 million nonfarm payroll employees in 2025 nationwide. Applying the 10.3% estimate to that workforce yield 16.3 million workers, meaning that at least 16.3 million workers nationwide likely experienced wage theft in any given week in 2025. Bernhardt et al. found that workers who experienced wage theft lost, on average, 15% of their weekly earnings. Using the BLS Current Population Survey (CPS), we find that the lowest-paid 15.1% of workers who are 18 years old or older and worked at least five hours per week —a conservative proxy for the population surveyed in Bernhardt et al.—had median weekly earnings of $352 in 2025. Assuming 15% losses due to wage theft, the earnings of workers experiencing wage theft would have been $414 if wage theft hadn’t occurred, an average loss of $62. Multiplying the estimated16.3 million workers experiencing wage theft by the average loss of $62, we find that the total amount lost by low wage workers to wage theft in a given week is $1.01 billion. Annualized, this amounts to $52.5 billion in wages stolen from low-wage workers each year.

17. Daniel Schneider, Elizabeth Kuhlman, Kristen Harknett, and David Weil. 2024. Compliance and the Complaint Gap: Labor Standards Violations in the California Service Sector. The Shift Project at Harvard Kennedy School, May 2024.

18. Annette Bernhardt et al., Broken Laws, Unprotected Workers: Violations of Employment and Labor Laws in America’s Cities, 2009, Center for Urban Economic Development, National Employment Law Project, and UCLA Institute for Research on Labor and Employment, 2009.

19. This is an argument made by Judge Easterbrook in Reyes v. Remington Hybrid Seed Co. 495 F.3d 403 (7th Cir. 2007). In that decision, Easterbrook notes, “If Zarate [the labor broker in the case] had been solvent, Remington [the lead business in the case] would have to offer him enough that he could pay all the workers’ wages (including the minimum wage and any overtime premium), cover the costs of fringe benefits such as housing, and still be able to make a profit. But when a contractor has no business or personal wealth at risk, he may be tempted to stiff the workers (as Zarate did) and then treating the principal firm as a separate employer is essential to ensure that the workers’ rights are honored.”

20. $12 was 66.1% of the median wage in 2017, and 66.1% of the median wage in 2025 was $16.97.  Economic Policy Institute, State of Working America Data Library, “Hourly wage percentiles – Nominal hourly wage,” 2026.

21. Low-Wage Workforce Tracker, Economic Policy Institute, January 2026.