A new report finds that the State of Illinois could generate over $500 million in new tax revenues from legalizing recreational marijuana. Continue reading “Illinois Would Generate Over $500 Million Per Year By Legalizing Marijuana”
Illinois’ budget crisis can be resolved by raising taxes on the rich and cutting taxes for low-income and middle-class families, according to a new Policy Brief by the Illinois Economic Policy Institute (ILEPI). The memorandum corroborates recommendations by the non-partisan Civic Federation, the … Continue reading A Graduated Income Tax Could Save Illinois
It is time to Fix the Budget in Illinois. The Problem Illinois is experiencing a budget crisis. The State of Illinois now faces a $9 billion annual deficit, according to the Institute of Government & Public Affairs at the University … Continue reading Fix the Budget
Governments utilize policies to impact the efficiency of labor markets. These policies are designed to increase employment by encouraging people to look for work, make it easier for people to get to work, provide support for people who are working, … Continue reading State Policies That Support Employment
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.
Today, the Midwest Economic Policy Institute released Common Sense Construction: The Economic Impacts of Indiana’s Common Construction Wage with the University of Illinois School of Labor and Employment Relations and Smart Cities Prevail. The report finds that Indiana’s Common Construction Wage (CCW) promotes positive labor market outcomes for both construction workers and contractors. Full report [pdf] One-page summary [pdf] Ten facts about the Indiana CCW: 1. The Common Construction Wage keeps Hoosier jobs local. (For more, see pages 5 and 11-13) 2. The Common Construction Wage does not increase total construction costs for public projects. (Pg. 4) 3. The Common Construction Wage promotes an upwardly-mobile, high-road economy for working families. (Pg. … Continue reading The CCW is Common Sense Construction
Today, ILEPI released a Policy Brief on The Benefits of Doing Business in Illinois [pdf].
Too often, the public policy discourse is focused on costs. The costs of labor, the costs of transportation, the costs of taxes. Costs, costs, costs. Lost in the discourse is an emphasis on the benefits of policies.
The Benefits of Doing Business in Illinois finds that – despite sluggish economic growth, a high unemployment rate, and moderately high tax rates – Illinois remains a great place to do business. Below are 10 important facts found in the report about Illinois’ pro-business environment:
1. After adjusting for inflation, the Illinois economy has grown by 10.6 percent since 2000. This growth is less than the nation as a whole (19.6 percent), but higher than the rest of Illinois’ neighbors put together (7.6 percent). The Illinois economy has expanded by more than the greater region since 2005 as well.
2. Per capita personal income has grown by $1,510 since 2005 and is now $45,832 in Illinois. The national average is $43,735 while the average for Illinois’ neighbors is just $40,165. Income growth has been about 3.5 percent for all regions. Higher incomes translate into higher consumer demand in the Illinois market. Continue reading “ILEPI Releases Report on the Benefits of Doing Business in Illinois”