Wages in Michigan, Indiana and Wisconsin lagged those in other Rust Belt states, but the number of jobs increased faster after the three adopted right-to-work laws, according to a study out this month by the Illinois Economic Policy Institute, a liberal nonprofit.
Overall wages grew in the three states, but the increase was modest. The report argued that was most likely because of weaker unions in those states.
“In Indiana, Michigan, and Wisconsin, the introduction of [right-to-work] 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,” the study found. However, the study also found that “the unemployment rate has fallen by between 0.5 percentage points and 2.2 percentage points more post-RTW in the states that enacted the law.
“Michigan stands out in particular, because the unemployment rate has fallen by 4.8 percentage points since Michigan’s RTW law went into effect,” the study said.
Right-to-work laws prohibit union-management contracts that included “security clauses,” requirements that all workers join or otherwise support a union as a condition of employment. Security clauses are a common feature of most union contracts and a key source of labor organizations’ strength, since they boost the membership and the dues money they receive from that.
Such clauses are a common feature of most union-management contracts but are prohibited in 28 states. Workers in those states can refuse to support unions if they choose, hence the term “right to work.” Indiana adopted its version in 2012, Michigan in 2013 and Wisconsin in 2015. The moves have been controversial in those states, which have a heavy union presence.
