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Midwest ‘Right to Work’ States Have Lower Wages Than Neighbors

April 20, 2017 
By Steven Wishnia and Neal Tepel

La Grange, IL - Wages are lower in the three industrial-Midwest states that have banned the union shop than they are in the three that haven’t, according to a study by the Illinois Economic Policy Institute released Apr. 3.

The study found that median wages were 5.9% lower in Indiana, Michigan, and Wisconsin, where so-called “right to work” laws have gone into effect in the last five years, than they were in Illinois, Minnesota, and Ohio, which have preserved collective-bargaining rights. “In Indiana, Michigan, and Wisconsin, the introduction of RTW laws has statistically reduced the unionization rate by 2.1 percentage points on average and lowered real hourly wages by a total of 2.6 percent on average,” it estimated. While unemployment was “marginally lower” in those three states, it said, the average wage was almost $2 an hour less. The “negative consequences” were worst for relatively middle-class workers, it said. It estimated that the laws had reduced wages by 5.9% for construction and extraction workers and 3.1% to 3.3% for those with a college degree or some college education. Read more

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