New Study: State’s Current Flat Tax System Overcharges Middle Class, Strains Public Budgets Continue reading “Graduated Rates Would Provide Tax Relief, Shrink Deficits, and Boost the Illinois Economy”
Between one-third and one-half of the rise in income inequality in America is due to the declining real value of the minimum wage. Continue reading “Boost Worker Incomes by Raising Illinois’ Minimum Wage”
It is tax season once again. By this time next week, millions of Illinois households will file their state and federal income tax forms. With Tax Day one week away, the Illinois Economic Policy Institute asks: How did you do in 2017? Continue reading “Filing Taxes this Week? See Where You Stand in Illinois”
A new Economic Commentary provides the latest data on full-time workers in Illinois’ labor market, allowing you to see how you compare.
CHICAGO- A new study released today finds that labor unions play a vital role in Illinois’ communities and economy, but face major challenges. The study, The State of the Unions 2015: A Profile of Unionization in Chicago, in Illinois, and in America [PDF] was conducted by researchers at the University of Illinois (Robert Bruno, PhD), the University of Chicago (Virginia Parks, PhD), and the Illinois Economic Policy Institute (Frank Manzo IV, MPP).
Since 2005, union membership in Illinois has declined by approximately 97,000 workers, contributing to the 1.12 million drop in union members across the nation. Declining unionization in Illinois has primarily been the result of decreases in male, Latino/a, and private sector unionization.
However, there has been some good news for those in the Illinois labor movement. From 2012 to 2014, the state’s unionization rate increased from 14.6 percent to 15.1 percent, and total union membership increased by about 30,000 workers. Continue reading “Study – Union Power in Illinois is Significant, but Waning”
Frank Manzo IV is the Policy Director of the Illinois Economic Policy Institute (ILEPI). Visit ILEPI at http://www.illinoisepi.org or follow ILEPI on Twitter @illinoisEPI. How are you doing this tax season, fellow Illinois resident? The average worker earns $23 per … Continue reading How Are You Doing This Tax Season?
Today, the Illinois Economic Policy Institute and the University of Illinois jointly released Free-Rider States: How Low-Wage Employment in “Right-to-Work” States is Subsidized by the Economic Benefits of Collective Bargaining [PDF]. The report has three main findings:
- Right-to-work laws have negative impacts on the public budget;
- Workers in collective-bargaining states are subsidizing the low-wage model used by employers in right-to-work states; and
- Illinois would have been worse off if it was a right-to-work state in 2013.
A “right-to-work” law reduces worker earnings by 3.2 percent, reduces union membership by 9.6 percentage points, reduces the share of workers covered by a health insurance plan (3.5 percentage points) and by a pension plan (3.0 percentage points), and increases the poverty rate among workers by 0.9 percentage points.
All of this has negative impacts on the public budget. Lower worker earnings decrease income tax contributions: a right-to-work law lowers the after-credit federal income tax liability of workers by 11.1 percent. Lower worker earnings also increase the chances of a worker needing to rely on government assistance programs: workers in collective-bargaining states receive 18.9 percent less in tax relief from the Earned Income Tax Credit and 14.1 percent less in food stamp value than their counterparts in right-to-work states.
Additionally, right-to-work laws have inconclusive impacts on employment. While the report finds that they are associated with a small increase in hours and weeks worked by employees, this is likely because they are forced to work more time to earn anything close to their annual income in a collective-bargaining state. Furthermore, two case-studies using data from the Bureau of Labor Statistics illustrate how right-to-work states have negligible impacts on total employment:
- In March 2012, Indiana enacted right-to-work. From March 2012 through July 2014, the Indiana unemployment rate fell from 8.0 percent to 5.9 percent– a 2.1 percentage point drop. At the same time, the unemployment rate of collective-bargaining Illinois fell by 2.0 percentage points. This difference is statistically insignificant.
- In January 2013, Michigan enacted right-to-work. From January 2013 through July 2014, the Michigan unemployment rate fell from 8.9 percent to 7.7 percent– a 1.2 percentage point drop. At the same time, the unemployment rate of collective-bargaining Illinois fell by 2.4 percentage points. This difference is significant, and shows how a right-to-work law does not lead to improved employment outcomes.
Frank Manzo IV is the Policy Director of the Illinois Economic Policy Institute (ILEPI). Visit ILEPI at www.illinoisepi.org or follow ILEPI on Twitter @illinoisEPI. This post is a response to an article written by Stan Greer of the National Institute for Labor Relations Research on February 10, 2014. The article “reported” (for lack of a better term) on a recent study conducted jointly by ILEPI and the University of Illinois. For reference, our study, Which Labor Market Institutions Reduce Income Inequality? Labor Unions, Prevailing Wage Laws, and Right-to-Work Laws in the Construction Industry can be found here [PDF] and an accompanying Illinois Insights Blog post … Continue reading On the Fallacious Argument of One Right-to-Work Advocate