Here are the real FACTS about why these schemes – barring fair share in the public sector and promoting so-called “right-to-work” in the private sector- are simply WRONG.
WRONG FOR EMPLOYEES
These laws drive down wages for all workers, including non-union members. Workers living in the “right-to-work” states earn about $5,900 less per year than workers in states without these laws, according to the Economic Policy Institute (EPI). The wage penalty is even higher for women and workers of color.
EPI also found that workers in “right-to-work” states are less likely to have health insurance. The rate of employer-sponsored health insurance for workers in “right-to-work” states is 2.6% lower than in states without these harmful restrictions.
WRONG FOR THE ECONOMY
These laws do not improve the employment rate. In fact, 8 of the 12 states with the highest unemployment have “right-to-work” laws, according to the U.S. Bureau of Labor Statistics.
The Wall Street ratings agency Moody’s said, “Since laws that hurt unions shift the balance of power from employees to owners, they tend to erode wages and lead to a more uneven distribution of the gains of economic growth.“
WRONG FOR COMMUNITIES
Communities lose jobs when wages are lowered by “right-to-work.” The Economic Policy Institute estimates that when wages are driven down, the local economy sheds jobs- because businesses have fewer customers who spend less.
With an educated workforce and good transportation, “Illinois’ business climate outshines its regional rivals.” The state Chamber of Commerce told the Chicago Tribune, “Illinois doesn’t need ‘right-to-work’ to compete with our neighbors.“
The Union Difference
The UNION Difference.
1. Wages, benefits, and working conditions are protected by a legal contract.
1. Management can change wages, benefits, and working conditions unilaterally.
2. A contract spells out how much each worker earns.
2. No one knows how much anyone else earns. Disparate treatment/favoritism exists.
3. Unions negotiate raises for everyone. Members vote on it, and if they feel
it is unfair, they may vote it down.
3. If you want a raise, you must plead your case to a supervisor or manager.
4. If you are unfairly disciplined, unions provide due process to protect against
4. If you are unfairly disciplined, you are on your own (at-will employee). You are subject
only to policy.
5. If you don’t like something at work, you can work together to change it.
5. If you don’t like something at work, you are at the mercy of management.
LIVE BETTER. WORK UNION.
Moody’s Analytics Forecast for Illinois (2015)
“Since laws that hurt unions shift the balance of power from employees to owners, they tend to erode wages and lead to a more uneven distribution of the gains of economic growth,” Moody’s report said. “Consequently, even if the impact of right to work laws is positive in the short run, it can diminish over time because of the downward pressure on incomes.”
University of Illinois study on “Right to Work” (2013)
If Illinois adopted a “Right to Work” Law:
Earnings would fall by 5.7 to 7.3 percent over time.
Manufacturing earnings would fall by 8.6 percent over time.
Construction earnings would fall by 22.2 percent over time.
Wage growth would be between 0 and 0.4 percent; but closer to 0.
The union wage premium would fall by about 2 percentage points over time.
Employment would increase by a very small 0.4 to 0.55 percent but this increase may cease over the course of a few years.
The unionization rate for Illinois would decline from 14.6 percent to betwen 4.7 and 13.1 percent.
The hourly wages of African-American workers would drop by 2 to 9 percent over time.
The hourly wages of Latino(a) workers could drop by as much as 8 percent over time.
The hourly wages of women would fall by 2 to 7 percent over time.
The annual benefits packages offered to construction workers would fall by as much as $4,126 over tiume.
Approximately 107 additional Illinois workers would lose their lives due to work related injuries in the construction sector over 10 years.
Annual total labor income in the state would drop by between $1.9 billion and $8.9 billion by the third year after adoption.
Annual state income tax revenue would decline by $76.9 million and $355 million by the third year after adoption.
After the third year of the adoption, Illinois would suffer a loss in labor income between $36 billion and $40 billion over the following 5 years.
After the third year of the adoption, the 5 year reduction in state income tax revenues would be between $1.4 billion and $1.6 billion.
University of Illinois Study on Prevailing Wage (2013)
Findings from this study indicate that the Illinois Prevailing Wage Law (PWL) is associated with positive labor market outcomes for construction workers at costs that are either negligible or fully offset. Additional labor costs associated with the statewide PWL are outweighed by other substantial positive impacts for the state economy and Illinois taxpayers. In all likelihood, total construction costs would not be greatly affected by the repeal of PWL due to potential changed in the workforce, productivity, and management practices associated with the policy change. Indeed, repeal of Illinois’ PWL would likely cost the state money, result in job losses, and reduce the construction sector’s efficiency.
This study forecasts that employment in the construction industry would like increase should the statewide PWL be repealed. However, any new jobs linked to repeal would be significantly offset by job losses experienced throughout the rest of the economy. These indirect effects of repeal would result in about 3,300 net jobs lost, in a total GDP contraction of more than $1 billion annually for Illinois, more than $44 million in lost state and local taxes, and roughly $116 million in lost federal tax revenue. Within the state, the negative results are comparable for each of the 8 regions that were studied.
If the Prevailing Wage Law were to be repealed in Illinois, it is estimated that an additional 7 Illinois construction workers would lose their lives on an annual basis. Extrapolated over the span of a decade, approximately 70 additional Illinois workers would suffer fatal work related injuries in the construction industry due to the repeal of the state’s PWL. It can also be anticipated that employer contributions to both legally required and fringe benefits for construction workers would dramatically decline.
Additionally, the data examined in this study strongly affirms the claim that state PWLs are supportive of construction apprenticeship programs. Study findings suggest that state PWLs support of the construction training system is a critical component for an industry that is continually concerned about the availability of sufficiently skilled workers.
Finally, this study finds no substantial evidence that state PWLs are harmful to African-American participation in the construction industry. Claims that states with PWLs have reduced African-American participation in construction are based on simplistic analyses which are, at best, descriptive and unconvincing. More advanced work finds no evidence suggest that PWLs act to the detriment of African-American workers.
In summary, Prevailing Wages for public construction projects in Illinois provide numerous positive economic and social impacts for both construction workers and the state on the whole. This study predicts that repeal of Illinois’ PWL would not result in savings for taxpayers or the state or lead to increased employment of African-American construction workers. Rather, repeal of Illinois’ PWL would result in job losses throughout the state’s economy, increased construction worker fatalities, and declines in valuable social impacts such as construction worker benefits and training opportunities.
ILLINOIS STATE COUNCIL OF OPERATING ENGINEERS
SUPPORT THE ILLINOIS PREVAILING WAGE ACT
Repealing the Prevailing Wage Act would decrease wages and benefits of middle class families.
Rates reflect the local private sector labor market and include costs of health insurance, retirement, and training
Worker wages would decrease between 3.4% and 7.5%, and per worker spending on health care and retirement would decrease significantly
The Prevailing Wage Act keeps construction jobs local and promotes economic opportunity for Illinois communities and Illinois families
More than 93% of public works in Illinois are done by Illinois contractors, while states without a prevailing wage employ in-state on 89% of public works.
A reduction in wages and an increase in out-of-state contractor employment would decrease Illinois’ GDP by more than $1 billion, resulting in thousands of jobs lost and significant revenue loss
Private sector bargaining agreements support construction apprenticeship programs
Construction Apprenticeship programs increase worker productivity, product quality, and reduce work place fatalities
A trained and skilled local workforce is need to fix Illinois’ crumbling infrastructure, 1 in every 3 miles of roads and 1 in every 10 bridges will be in unacceptable condition by 2018.
The Prevailing Wage Act does not lead to an increase in costs to public construction programs
Construction workers in Illinois have a higher tax base, and are less reliant on government assistance when compared to workers in states without a prevailing wage
Contractors non-prevailing wage states reduce cost savings to governments from lower salaries through higher profit margins
The Act creates a public bidding process reflective of the local labor market that encourages competitiveness through effiencies and quality of work
Visit truthinemployment.org to access reports used in this fact sheet. Like Truth in Employment on Facebook and follow Truth in Employment on Twitter to receive updates on information effecting middle class families.