New Issue Brief: The Long-Run Effects of Right-to-Work Laws

Protecting individual choice doesn’t hurt wages but promotes economic development

New York, NY – As the Writers Guild of America strike approaches resolution in Hollywood, the United Auto Workers strike in Detroit continues to stoke economic uncertainty against a backdrop of recent legislative change in Michigan. Just months earlier, the state became the first in decades to repeal its Right-to-Work (RTW) law, which had protected workers against mandatory union membership or agency fee payment in unionized workplaces. While the repeal was cheered as a victory for organized labor, a new Manhattan Institute issue brief by Matthew Lilley, a visiting research scholar at Duke, rigorously documents the ways in which RTW laws are much better for workers of all stripes than union interests would have us believe.

RTW opponents claim that these laws weaken labor unions and lead to lower wages, while advocates argue that RTW states experience faster economic growth and increased employment. To analyze the effect of RTW laws, Lilley compares neighboring counties in different states, one with RTW laws and the other without. He finds that RTW laws lead to a significant increase in manufacturing employment, improved labor market outcomes, higher population growth (implying higher net migration), lower childhood poverty rates, and greater upward income mobility. He finds no evidence that they reduce wages or overall worker compensation.

Lawmakers considering introducing RTW laws should take note. While pressure from organized labor muddles the objective reality, Lilley’s issue brief offers clear, empirical analysis on the benefits such lawmakers could bring to their states through adopting protections for workers who choose to opt out of union membership.

Read the full issue brief here.