Study: Right to Work Laws Reduce Age Discrimination

According to a recent study by the Mercatus Center, Right to Work (RTW) laws reduce age discrimination within the American labor market. In fact, although many states already enforce anti-ageism legislation, RTW statutes are more effective at preventing discrimination against older workers. Without strong RTW protections nationwide, forced unionization will continue to result in age bias.

RTW laws provide older workers with an escape route from collective bargaining agreements (CBAs), which often artificially inflate wages above fair market rates. As the Mercatus Center study found, when labor unions mandate compensation floors, employers are discouraged from “hiring applicants the employer perceives as being less productive.” For older workers, these CBAs can generate a cost of labor that far exceeds their marginal productivity. Without robust RTW laws, employers have no choice but to hire their younger counterparts, creating a vicious cycle of age discrimination. 

However, by freeing older workers from compulsory union membership, RTW laws allow employees to negotiate market-competitive wages, rather than accepting inflated rates dictated by labor bosses. In states without RTW legislation, these compulsory agreements can price older workers out of the labor market entirely, incentivizing discrimination to appease excessive union demands. By giving workers the right to negotiate their own non-union contracts, RTW laws reduce the ability of unions to “negotiate compensation above competitive levels,” making older workers “much more attractive to employers, according to the study.

Numerous studies have discovered an alarming trend of age discrimination within the American labor market, particularly within regions opposed to RTW legislation. Although many states have enacted anti-ageism laws, the effects of these laws pale in comparison to the cumulative impact of RTW protections for older workers.

For instance, according to a 2019 study published in the Journal of Law and Economics, men aged 64-66 were 24.67% less likely to receive a job interview than their younger counterparts. For women aged 64-66, this margin ballooned to 31.60%. However, when this audit methodology was applied to states with “larger damages under age discrimination laws,” this interview disparity was reduced by 5 percent for older men and 10 percent for older women. Although these anti-ageism laws create a decent barrier against workplace discrimination, the Mercatus Center has discovered that RTW laws are an even stronger tool for reducing these hiring disparities.

According to Mercatus’s study, applicants aged 64-66 were 13 to 19 percent less likely to receive a job interview compared to younger applicants. For older women in particular, RTW protections reduced hiring discrimination by about 30 percent.

In addition to being three times more effective at combating age discrimination, this RTW phenomenon also addresses an important failure of anti-ageism laws. Cases where older women face dual discrimination based on both age and sex can be “difficult to bring before the courts,” according to one study, due to a web of different anti-discrimination laws covering each factor. Instead of having to pursue this complex litigation, RTW protections offer natural incentives against hiring discrimination for older female workers.

Without strong RTW protections on a national level, older workers may continue to be priced out of some parts of the American labor market. By granting employees the autonomy to negotiate market-competitive wages, employers will be much less inclined to discriminate against applicants who they perceive to have a lower marginal productivity. As a more effective deterrent than actual anti-ageism legislation, RTW laws are a proven pillar of workplace equality. In order to preserve the presence of older workers within the American labor market, national RTW protections are needed to fight the perils of age discrimination.

The Mercatus study was authored by Vitor Melo and Liam Sigaud.