* Background is here if you need it. From the Illinois Economic Policy Institute…
Statement from ILEPI Executive Director Frank Manzo IV on a section of a February 2022 report from Moody’s Analytics on the State of Illinois Economic Forecast pertaining to unions and so-called “right-to-work” policies:
A 2021 study by the Illinois Economic Policy Institute (ILEPI) and the University of Illinois at Urbana-Champaign shows that Illinois’ economy is significantly better off than states with so-called “right-to-work” laws. Illinois’ workers earn 6% higher incomes, even after accounting for the state’s higher cost-of-living. They are 5% more likely to have health insurance. Fewer Illinois workers are below the poverty line. And Illinois workers are 3% more likely to own their homes, despite facing high property taxes.
While some lobbyists claim that “right-to-work” laws attract businesses, the data tells a different story. First, productivity per worker is 15% higher in Illinois than in so-called “right-to-work” states. Productive workers are good for business. Second, surveys of corporate executives consistently show that “right-to-work” is not a consideration in business location decisions. Moody’s Analytics cites these surveys without noting that “right-to-work” policies do not appear in the Top 10 factors in business location decisions. Accessibility of transportation infrastructure and the availability of skilled labor matter far more. Third, over the decade from 2010 to 2020, the gross domestic product (GDP) of states with “right-to-work” laws grew 3% slower than it did in the states that support workers’ rights to collectively bargain. That’s why West Virginia Governor Jim Justice, a Republican, lamented in 2021: “Really and truly, let’s just be brutally honest. We passed the ‘right-to-work’ law in West Virginia. And we ran to the windows looking to see all the people that were going to come—and they didn’t come.” Passage of “right-to-work” legislation is not a panacea in attracting businesses, jobs, or residents.
Union workers earn higher incomes and spend more money back into the Illinois economy than their nonunion counterparts. Union workers are more likely to have health insurance. They are more likely to own their homes and have higher housing wealth. They produce safer worksites. And they contribute more in taxes while taking less in government assistance programs. Union workers are not a “negative factor,” as Moody’s Analytics suggests. The data are clear: Union workers positively impact the state’s economy.
* From the Moody’s analysis…
Unions. Unit labor costs in the state are above the national average, in part because of a still-high presence of unions. The state’s unit labor costs are significantly higher than those of neighboring Indiana but lower than in Michigan and Wisconsin, three states that have adopted right-to-work laws. Under right-to-work laws, employees in unionized workplaces cannot be forced to pay union fees or join unions. Michigan passed a law after a number of businesses, mostly in manufacturing, cited the law as a factor in their decision to locate in Indiana. Less clear are the effects that right-to-work laws have on economic growth. The lack of clarity is mainly due to the fact that union strength is just one factor businesses look at when deciding whether to set up shop or relocate. Energy and other costs also matter, as do a slew of other factors including talent, infrastructure, and access to customers and capital that make it extremely difficult to gauge the precise effects of right-to-work laws on job creation and a state’s economic prosperity.