Efforts to create local “right-to-work” zones would have negative impacts on workers and the economy in Illinois. The preponderance of evidence finds that worker incomes are lower in economies with right-to-work laws and that employment effects are minimal at best. For instance, average worker wages are $2.90 per hour (13 percent) higher in Illinois than in right-to-work Indiana and Illinois added 14,000 more jobs in 2014. At the same time, the unemployment rate in eastern Illinois counties was lower than in right-to-work counties across the Indiana border in December 2014. The proposal for local right-to-work zones is based on the assumption that high union density hampers local economies. An analysis of the 102 counties in Illinois, however, reveals that this presupposition is unfounded. Higher county-level unionization rates within Illinois have no discernible impact on employment growth, establishment openings growth, and average household income growth. The evidence that unionization raises the unemployment rate in Illinois is also weak. The claim that right-to-work is an effective way to put people to work is rejected for lack of evidence. Incorporating estimates from previous policy research, economic impact analyses are performed to determine the effect of adopting local right-to-work laws in half of Illinois’ counties, excluding Cook County. The models randomly select 51 counties to become right-to-work zones and demonstrate the negative consequences of the proposal. If half of the state’s counties (excluding Cook County) became right-to-work zones:
- Total labor income would fall by $1.3 billion;
- The economy would shrink by $1.5 billion;
- State and local tax revenues would be reduced by $80 million;
- Labor unions would experience a loss of 200,000 members;
- Racial income inequality and gender income inequality would both increase; and
- The number of workplace injuries and fatalities would rise.
In the seven integrated county economies with over 100,000 workers in Illinois, predicted impacts are generally similar. If local right-to-work zones were only passed in the Chicago six-county area, the regional economy would experience over 5,500 jobs lost and an economic contraction of $2.6 billion. Both businesses and workers would relocate to other parts of the state with better incomes and higher consumer demand. Similarly, local right-to-work laws would reduce total worker earnings by around $40 to $60 million in the Champaign-Urbana, Quad Cities, Rockford, and Springfield-Decatur regions. Labor income would also be predicted to decline by $16 million in the Peoria-Bloomington community and by $104 million in the St. Louis region. Local right-to-work zones would eradicate good middle-class jobs, replacing them with low-wage employment openings and redistributing income from labor to capital. Ultimately, economic analysis reveals that local right-to-work laws would reduce worker earnings and decrease state and local tax revenues. The result would be a weaker Illinois economy.
Source: Illinois Economic Policy Institute and Illinois University of Illinois at Urbana-Champaign