State legislators in Iowa could enact “high-road” policies to encourage the private sector to meet the impending skilled construction worker shortage, according to a new Economic Commentary [PDF] by the Midwest Economic Policy Institute. The construction industry has grown since the market … Continue reading Iowa’s Shortage of Skilled Construction Workers
In a decision on Wednesday, a federal judge in Kentucky ruled that the National Labor Relations Act (NLRA) prohibits local units of government from enacting “right-to-work” zones.
A new report by the Illinois Economic Policy Institute (ILEPI) investigates ten examples of how unions can– and do– increase economic efficiency: Union workers earn higher wages and increase consumer demand; Unions reduce socially inefficient levels of income inequality; Union … Continue reading Ten Examples of How Unions Can Increase Efficiency
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. After our previous post was published, ILEPI received a few emails and tweets. ILEPI responded to … Continue reading An Addendum on Construction Unions and Worker Wages and Productivity
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. Recently released data illustrates the strongly positive relationship between unionization and productivity in the construction industry. … Continue reading Unions Increase Productivity in the Construction Industry
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. “Right-to-work” laws have the largest negative impacts on construction workers, according to a new ILEPI Economic … Continue reading Construction Workers Are the Major Victims of Right-to-Work Laws
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. Efforts to create local “right-to-work” zones would have negative impacts on workers and the economy in … Continue reading Local Right-to-Work Zones Would Weaken the Illinois Economy
Analysis of new data from the Current Population Survey (conducted jointly by the U.S. Bureau of Labor Statistics and the U.S. Census Bureau) reveals that 4.8 percent of the Illinois workforce earns less than $8.25 an hour, the legal minimum wage for workers aged 18 years or older in firms with 4 or more employees. In total, an estimated 264,508 workers earned less than the minimum wage in 2014. Among sub-minimum wage earners (SMWEs), hourly pay averages just $6.66, or $1.59 per hour below the minimum wage floor. This translates into an economic loss of $1,654 over the year for part-time employees who worked 20 hours per week in 2014.
While many of these workers are under 18 years old or are employed by small businesses excluded from the minimum wage law, many others are the victims of wage theft. A 2009 study by researchers at the National Employment Law Project, the University of Illinois at Chicago, Cornell University, and the University of California – Los Angeles found that 26 percent of low-wage, “front-line” workers were paid less than the legally-required minimum wage. The highest violation rates occurred in apparel and textile manufacturing, private households, and personal and repair services. Similarly, in a survey of 57 car washes in the City of Chicago, the University of Illinois at Urbana-Champaign found that 76 percent of hand car wash workers earned below the state’s minimum wage and 13 percent earned less than $2 per hour.
Minimum wage theft occurs for many reasons. First, there could be information problems in that employers may not realize that their practices are depriving workers of owed income or that they have misclassified workers as temporary or contingent workers. Second, tipped employees may not be compensated by their employer enough to close the minimum wage gap when the tips fall short. Third, business practices that elevate short-term profits above long-term profitability put downward pressures on wages. Fourth, economically inefficient social issues such as racial, gender, sexual orientation, and religious discrimination could also be factors. Continue reading “Over 250,000 Illinois Workers Earn Less than the Minimum Wage”
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
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. “Today, after four years of economic growth… average wages have barely budged. Inequality has deepened. Upward mobility has stalled. The cold, hard fact is that even in the midst of recovery, too many Americans are working more than ever just to get by – let alone get ahead.” –President Obama in the State of the Union Address, 2014. Across the country, states and localities can respond to the President’s call to action and grow wages, create jobs, and reduce … Continue reading Income Inequality is Fixable in Construction