Illinois' Workers’ Rights Amendment won’t cost; it will pay off, study shows

Taxes for everyday Illinoisans would not go up because the proposed Workers Rights Amendment is passed by voters Nov. 8. In fact, the financial burden on taxpayers would decline, according to a new study by researchers from the Illinois Economic Policy Institute and the University of Illinois at Urbana-Champaign.

The Workers’ Rights Amendment would improve the state’s economy and boost incomes and better  working conditions for workers, according to the study, which adds that union workers are less likely to rely on public aid than their non-union counterparts, and they contribute 8% more to state income taxes.

“The data shows that the Workers’ Rights Amendment would protect Illinois’ competitive advantage for essential workers,” said Frank Manzo IV, executive director for the Illinois Economic Policy Institute (IEPI) and one of the report’s authors. “Construction workers, police officers, first responders, teachers, Registered Nurses all earn between 5% and 35% more in Illinois, and they’re also more likely to have health insurance and to own their homes in Illinois.”

Compared to states without the right to collectively bargain and share the costs of representation, such as Iowa and Kentucky, Illinois’ workers on average earn 15% higher incomes (more than $7,000 per year) and are 5% more likely to have health-insurance coverage, research shows. They also are more likely to own their homes, less likely to live in poverty, and 32% less likely to lose their lives due to preventable accidents on-the-job.

By passing the Workers’ Rights Amendment – preventing future efforts to weaken collective bargaining – voters “can protect an estimated $43 billion in earned income for workers, health-insurance coverage for nearly 300,000 workers, and prevent as many as 90 on-the-job fatalities each year,” Manzo said.

Paul Pater, a Registered Nurse with the Illinois Nurses Association, told Chicago public radio that the amendment would help both private- and public-sector workers “feel more secure, more safe” in their jobs. He said being part of a union helped him and his colleagues win higher wages and lead to “direct safety initiatives, things like ensuring we have enough respirators at work, enough safety equipment during COVID … to keep our people safe and keep our patients safe.”

The Workers’ Rights Amendment would give power to workers, not corporations, Pater continued.

It “just provides a boon to those workers who are concerned that they’re going to be fired for trying to organize a workplace, for standing up for themselves, for demanding better wages and safer working conditions,” he added.

In analyzing the Workers’ Rights Amendment’s potential impacts on Illinois, researchers compared economic and workforce outcomes between union and nonunion workers across the state, as well as between Illinois and the 27 states that have passed state laws to weaken unions.

“Our analysis reveals that unions not only deliver higher wages and better benefits for Illinois workers relative to their nonunion peers, but that they are substantially better for public budgets,” Manzo said.

The economic impacts of protecting workers’ rights are not limited to workers. On average, the economies of “free rider” states – where lawmakers prohibit labor agreements requiring those represented by unions to share in the costs of negotiating and enforcing contracts – grew 3% slower and their annual workforce productivity was 18% lower than states that support collective bargaining rights. The data also shows that collective bargaining is a good value for taxpayers because higher wages for workers translate to increased tax revenues and less reliance (and reduced government spending) on social safety-net programs.

Specifically, the study’s analysis of Illinois workers  without advanced degrees shows the benefits of union membership for those who vote for representation:

* Payroll taxes (union workers contribute $11,606; non-union workers $10,951)

* Percent below poverty (union 2.5%; non-union 5.9%)

* Percent on Medicaid (union 2.7%; non-union 6.2%)

* Percent on food stamps (union 2.4%; non-union 4.4%)

* Percent needing the Earned Income Tax Credit (EITC) (union 6.7%; non-union 9.1%)

 

Ultimately, by preventing state politicians from ever enacting laws weakening workers’ rights, researchers predicted the Workers’ Rights Amendment could play an important role in protecting the state’s relatively higher wages, benefits, and safety standards.

Fewer people needing assistance from the state means less of a burden on public funds derived from taxes.

If attack ads and disinformation cause voters to reject the proposed amendment, and Illinois’ labor market becomes like “free-rider” states that don’t support collective bargaining, the statewide consequences would be significant, the study shows:

* Inflation-adjusted annual incomes statewide would fall $43 billion
* About 281,000 workers would lose health insurance coverage
* The number of workers who own homes would drop 134,700
* More than 70,000 workers would fall below the poverty rate
* There would be almost 900 more on-the-job fatalities in the next decade

 

 “At a time when Americans don’t seem to agree on much, public polling has shown historic levels of bipartisan support for unions and the protection of collective bargaining rights,” Manzo said.

Indeed, the state legislature’s overwhelming bipartisan approval of the amendment (passing 80-30 in the House and 49-7 in the Senate) reflects that – and political and public support is bolstered by statistics.

“Our study shows that these opinions are not only well-founded, but they are also overwhelmingly supported by real-world economic data,” Manzo said. “Data shows that when states support collective bargaining, the economy does better and job quality is higher. Workers earn more,  are more likely to have health insurance, and are more likely to own their homes. It’s also better for public budgets, and [for] the economic imperatives of higher growth, fewer labor shortages, more productivity and better safety outcomes on the job site.”