How Anti-Union Laws Are Pushing Blue-Collar Workers Toward Self-Employment in the United States

In several parts of the United States, changes in labor laws are quietly reshaping how people work and earn a living. A new academic study reveals that when union protections weaken, many workers—especially blue-collar and low-wage employees—are increasingly turning to self-employment, not out of ambition or opportunity, but often out of necessity.

The research focuses on U.S. states that have adopted right-to-work (RTW) laws, a category of legislation that significantly alters the balance of power between workers, unions, and employers. The findings suggest that these laws don’t just affect wages or union membership; they also influence whether workers decide to leave traditional employment altogether and start their own small businesses.

What Right-to-Work Laws Actually Do

Right-to-work laws prohibit agreements that require workers to join a union or pay union fees as a condition of employment. In theory, these laws are meant to protect individual freedom of choice. In practice, they often lead to declining union membership and reduced collective bargaining power.

Unions have historically played a major role in securing higher wages, better benefits, job security, and safer working conditions, particularly for blue-collar workers in industries like construction, manufacturing, and transportation. When RTW laws come into effect, unions lose leverage, and employers gain more control over employment terms.

As of now, 26 U.S. states have adopted right-to-work laws, making this a widespread and ongoing policy shift rather than an isolated experiment.

The Study Behind the Findings

The research was published in the Strategic Entrepreneurship Journal and conducted by scholars including Daehyun Kim and Namil Kim. The researchers examined how workers respond when their labor environment changes due to the adoption of RTW laws.

To do this, they compared states that implemented RTW laws—specifically Michigan and Indiana—with neighboring states like Ohio and Kentucky, which maintained stronger union protections during the same period. This comparative approach allowed the researchers to isolate the impact of RTW laws more clearly.

The study tracked workers aged 20 to 34, focusing on those who transitioned into self-employment. For the purpose of the research, self-employment was defined as working 15 or more hours per week in a new business venture.

A wide range of factors were accounted for, including demographics, job tenure, occupation, industry, and state-level socioeconomic conditions, ensuring the results were not skewed by unrelated trends.

A Sharp Rise in Self-Employment

One of the most striking findings is the scale of the shift. After right-to-work laws were enacted, workers in affected states were up to 53% more likely to become self-employed compared to similar workers in neighboring states without such laws.

On average, the increase hovered around 50%, a substantial change by labor market standards. This wasn’t a slow, gradual trend—it closely followed the timing of the RTW laws themselves, strongly suggesting a cause-and-effect relationship.

Importantly, the rise in self-employment was not evenly distributed across all workers.

Why Blue-Collar Workers Are Most Affected

The impact was strongest among blue-collar and low-wage workers, the very groups that have traditionally relied most on unions for stability. These workers were significantly more likely to leave wage employment and start businesses after union protections weakened.

However, the nature of these businesses tells an important story.

Most of the new ventures were small, unincorporated businesses, often run by a single person or a very small team. This pattern suggests necessity-driven entrepreneurship, not opportunity-driven innovation. In other words, workers weren’t launching startups because they spotted a lucrative market gap; they were doing it because their regular jobs had become less secure and less sustainable.

What Changed for Workers After RTW Laws

The study also measured how working conditions shifted after RTW laws were introduced. Several notable changes stood out:

• Union membership declined by 1.96 percentage points, confirming the direct weakening of organized labor.
• Weekly working hours increased slightly, indicating that workers were putting in more time.
• Weekly wages showed no significant improvement, meaning workers were not being compensated more for those extra hours.

Taken together, these changes point to a deterioration in job quality. Workers were working longer, without better pay, and with fewer protections. For many, self-employment became a way to replace or stabilize income, even if it meant taking on more risk.

Why This Matters Beyond Individual Workers

The shift toward self-employment doesn’t just affect workers—it also has broader implications for employers and the economy.

From a business perspective, employees represent long-term assets. Their experience, skills, and relationships are built over time and cannot be easily replaced. When workers leave to start their own businesses, companies lose valuable institutional knowledge and may even face new competitors created by former employees.

Ironically, while some firms favor anti-union environments for the flexibility they provide, those same environments may encourage higher turnover and entrepreneurial exits.

Understanding Necessity-Driven Entrepreneurship

Entrepreneurship is often celebrated as a sign of economic vitality, but context matters. Researchers typically distinguish between opportunity-driven entrepreneurship, where individuals pursue promising ideas, and necessity-driven entrepreneurship, where people start businesses because they lack better options.

This study clearly places the observed increase in self-employment in the second category. The businesses formed after RTW laws were mostly modest in scale, offering limited growth potential and often serving as income substitutes rather than engines of innovation.

That distinction is critical for policymakers. Encouraging entrepreneurship is not the same as creating conditions that force workers into it.

Broader Implications for Labor Policy

The findings add a new dimension to the ongoing debate over right-to-work laws. Discussions usually focus on wages, employment levels, or business investment. This research highlights another outcome: changes in how workers organize their livelihoods.

Weakening unions may reduce collective bargaining costs for employers, but it can also push workers out of traditional employment entirely. Over time, this could reshape labor markets, increase income volatility, and shift risks from employers onto individuals.

Final Thoughts

This research shows that labor laws don’t just influence contracts and paychecks—they shape life decisions. For many blue-collar workers, the loss of union protection doesn’t lead to greater freedom or opportunity. Instead, it often leads to self-employment by necessity, driven by declining job security and workplace conditions.

As debates over labor policy continue, these findings offer a reminder that the consequences of legal changes are often broader and more personal than they first appear.

Research Paper:
https://doi.org/10.1002/sej.70006