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Sudheer Chava, Andras Danis and Alex Hsu
Sudheer Chava, Andras Danis and Alex Hsu

Right-to-Work Laws Establish Lower Wages and Union Bargaining Power in Latest Study by Scheller College of Business Faculty

Three Georgia Tech Scheller College of Business faculty have determined that the wages of union employees and the bargaining power of unions are lower in states with Right-to-Work (RTW) laws in their paper “The Economic Impact of Right-to-Work Laws: Evidence from Collective Bargaining Agreements and Corporate Policies,” which will be published in the August issue of the Journal of Financial Economics.

Sudheer Chava, Andras Danis, and Alex Hsu, professors in Finance concluded that RTW laws provide labor-intensive corporations with an increase in investment, employment growth, profitability, and labor-to-asset ratio, while decreasing the number of collective bargaining agreements (CBA) as well as wage growth of unionized workers.

The three faculty members analyzed data in five states from 1998 to 2016 and used wage growth data from 19,574 CBAs in the U.S. Their findings are in the paper “The Economic Impact of Right-to-Work Laws: Evidence from Collective Bargaining Agreements and Corporate Policies.”

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