Policy Research

The Potential Effects of a Right to Work Law in Wisconsin

Abdur Chowdhury

Summary

The State of Wisconsin is considering right to work legislation. The author, an economist, uses previous work regarding trends in lower wages for workers in right to work states to estimate the effect on Wisconsin’s workers, while also accounting for a modest increase in jobs. He estimates the direct loss in income for Wisconsin workers to be between $3.89 billion dollars $4.82 billion dollars annually, resulting in income tax reductions for the State between $234 million and $289 million annually.

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Policy Implications

Building upon existing literature and the effects on worker wages, the author makes a reasonable case for the reduction in wealth across the State of Wisconsin as a result of Right to Work Laws. However, while the author posits that business do not consider the RTW status of a state, but instead take into account all of the pro-business factors often associated with RTW states, this belief may lead him to underestimate job (re)location within the State of Wisconsin. Regardless, the work provides a solid econometric baseline for the effect of RTW on wages and income tax lost as a result.