Illinois Economic Policy Institute
The Illinois Economic Policy Institute is a new nonprofit organization which supports research and provides timely, candid, and dynamic analysis on major subjects affecting the economies of Illinois and the Midwest, specializing in the construction industry. The Illinois Economic Policy Institute uses advanced statistics, reliable surveying techniques, and the latest forecasting models to evaluate and generate public policies that empower individuals, policymakers, and lawmakers to make a positive impact.
On August 11, 2014, the Illinois Economic Policy Institute and Building Strong Communities jointly released Self-Sufficient Construction Workers: Why Prevailing Wage Laws are the Best Deal for Taxpayers. The Policy Brief finds that prevailing wage laws support the local economy and contribute positively to government budgets. By paying a living wage, prevailing wages support a stronger tax base and help policymakers balance budgets without the need to raise taxes. Conversely, taxpayers subsidize the low-wage, low-skill, low-quality system in states without a prevailing wage law. Blue-collar construction workers in these states contribute less in tax revenues but receive more government assistance. In addition, higher percentages of construction workers in states without a prevailing wage law have no health insurance, have no pension plan at work, live in public housing, and receive food stamp assistance– all of which comes at the expense of the taxpayer. The results are even starker when looking at Illinois and Indiana, states with “strong” prevailing wage laws. Prevailing wage laws are the best deal for taxpayers.
A recent ILEPI Economic Commentary evaluates prevailing wage in McHenry County, Illinois. The report finds that labor costs account for just 20.9 percent of total costs on heavy and civil engineering projects in the county and that payroll costs reflect the wages paid in the regional labor market while accounting for a higher cost of living in the Chicago area. In addition, public works construction projects require skilled workers who complete more classroom and on-the-job training than the minimum requirements to receive a typical bachelor’s degree, leading to highly productive construction workers in McHenry County. The study also shows that unionized contractors submitted 92.3 percent of bids on public projects in McHenry County and were awarded 95.3 percent of the projects in 2013. Ultimately, prevailing wages generate $57.6 million in economic output for the county, support $2.4 million in state and local tax revenues, and are the best deal McHenry County taxpayers.
A June study by the Midwest Economic Policy Institute, the University of Illinois, and Smart Cities Prevail finds that Indiana’s Common Construction Wage (CCW) promotes positive labor market outcomes for both construction workers and contractors. Among ten key takeaways, Common Sense Construction: The Economic Impacts of Indiana’s Common Construction Wage reveals that CCW keeps Hoosier jobs local, does not increase total construction costs, and promotes a highly-skilled and highly-productive workforce. The policy boosts the Indiana economy by almost $700 million and supports a quarter of a billion dollars in total worker income throughout the state, promoting an upwardly-mobile economy for working families. Ultimately, the Common Construction Wage provides substantial economic benefits and improves public safety.
Two recent ILEPI studies analyze the current state of labor unions. In The State of the Unions 2014: A Profile of Unionization in Chicago, in Illinois, and in America, researchers at ILEPI, the University of Illinois, and the University of Chicago analyze the course of unionization. The report investigates unionization rates and the impact of unions on wages across demographic, education, sector, industry, and occupation classifications. Union and Nonunion Households: General Social Survey, 2000-2012 compares and contrasts the characteristics of individuals in union households to those of individuals in nonunion households. Union and nonunion households differ across many socioeconomic characteristics– including household composition, work and income traits, religiosity, political affiliation, and institutional confidence. Both lead to the conclusion that, despite the long-term gradual decline in union membership, labor unions continue to play a vital role in economic and social life in America.