How Right-To-Work Laws Affect Wages
This paper, authored by University of Oklahoma economics professor W.
This paper, authored by University of Oklahoma economics professor W. Robert Reed, models the effects of state right-to-work laws on workers’ wages using state-level data to study how right-to-work affects wages while removing other economic factors as variables.
“Once initial economic conditions are taken into account, the model specification above estimates that 2000 average wages are 7.93 percent higher in RTW states compared to non-RTW states,” he writes. “My corresponding best estimate is that—holding constant economic conditions in 1945—average wages in 2000 are 6.68 percent higher in RTW states than non-RTW states.”
“I find that after accounting for the influence of economic conditions that were present when states adopted Right-to-Work (RTW), RTW states have significantly higher wages than would otherwise be expected,” Reed writes. “This finding is robust across a wide variety of model specifications. Perhaps surprisingly, past economic conditions ‘explain’ a large amount of the variation in current state wages.”