Absence of conflict of interest.
Citation
Highlights
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The study’s objective was to examine the impact of state-level collective bargaining policies on public sector employees’ wages.
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Using data from the 2000 to 2017 American Community Survey and the National Conference of State Legislatures, the author used a nonexperimental study design to compare the wages of public sector employees living in states where collective bargaining was restricted (for example, states with right-to-work laws) to the wages of public sector employees who lived in states where public employees had full collective bargaining rights.
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The study found no statistically significant relationships between states enacting restrictions on collective bargaining and public sector employees’ wages in a combined sample of men and women. The study found a negative and statistically significant relationship for women in states enacting some restrictions on collective bargaining. In those states, public sector female employees’ wages were lower by about 5 percent compared to wages for female public sector employees in states with no or few collective bargaining restrictions.
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The quality of causal evidence presented in this report is moderate because the analyses were based on a well-implemented nonexperimental design. This means we are somewhat confident that the estimated effects are attributable to the collective bargaining policies, but other factors might also have contributed.
Intervention Examined
Collective Bargaining Policies for Public Sector Employees
Features of the Intervention
In the 1960s public sector workers were granted the right to unionize and enter into collective bargaining agreements. However, various states have more- or less-prohibitive rules about public sector unionization and collective bargaining, and these rules have changed over time. Thus, for public employees, the extent to which they can enter into collective bargaining agreements, and on what topics they can collectively bargain for, is determined by the legal environment within their state.
The study classifies the legal environment within states based on the level of restrictions states have imposed on public sector employees’ ability to enter into or opt out of collective bargaining agreements. In a state with a high collective bargaining environment, all public employees can enter into a collective bargaining agreement and are subject to a mandatory union fee payment. In a right-to-work state, all public employees can enter into a collective bargaining agreement, but mandatory union fee payments are prohibited. In states with medium collective bargaining environments, collective bargaining is permitted, but negotiations over certain items such as seniority, layoffs, and performance pay are prohibited. In no or low collective bargaining environments, collective bargaining is prohibited on most topics but may be allowed on topics such as annual cost-of-living raises.
Features of the Study
The author used a nonexperimental design called a difference-in-differences study design to test the impact of collective bargaining policies on public sector employee wages. The author analyzed the change in wages for public sector employees living in states where collective bargaining rights were restricted (for example, were certain collective bargaining rights were repealed by law over time) to those living in states where collective bargaining was not restricted. The findings were presented for public employees living in right-to-work states, as well as those in states with medium collective bargaining rights and no or low collective bargaining environments. Employees in each of these state environments were compared to public sector employees in states with no or few restrictions on collective bargaining. The author also conducted analyses for men and women separately.
The author used data from the National Conference of State Legislatures to identify states’ legal environments for collective bargaining agreements. The data used to examine public sector employee wages were the 2000 to 2017 individual employee-level files of the American Community Survey. The analytic sample included 1.8 million public sector employees. Approximately 75 percent of the sample were White non-Hispanic and 60 percent were college educated.
Findings
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The study did not find statistically significant relationships between states enacting restrictions on collective bargaining and public sector employees’ wages. This was true for states that limited collective bargaining (medium and no or low collective bargaining environments) as well as for right-to-work states that limited public sector unions’ ability to collect mandatory union membership fees.
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The study found a negative statistically significant relationship for women in states enacting a medium level of restrictions on collective bargaining. In those states, public sector female employees’ wages were lower by about 5 percent compared to wages for female public sector employees in states with no or few collective bargaining restrictions. The study did not find statistically significant relationships for other restrictions on collective bargaining for women, or for any restrictions on collective bargaining for men.
Considerations for Interpreting the Findings
The author tested the similarity of wage trends between the treatment and comparison groups before the intervention and found them to be similar in general. However, it is still possible for other factors to explain the difference between the treatment and comparison groups. For example, it is possible that the 2007–2009 recession led some states to enact more restrictive laws against collective bargaining and that the recession, rather than impacts of collective bargaining, led to decreases in public sector employees’ wages.
Causal Evidence Rating
The quality of causal evidence presented in this report is moderate because the analyses were based on a well-implemented nonexperimental design. This means we are somewhat confident that the estimated effects on public sector employees’ wages are attributable to statewide laws affecting workers’ ability to bargain collectively, but other factors might also have contributed. However, the study did not find statistically significant effects for the full sample (only for the subgroup of female employees).