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.

Spotlight: The I-RIDE Proposal

A recent ILEPI Policy Brief proposes a smart, reliable policy to fund transportation infrastructure for the modern world. The Illinois Road Improvement and Driver Enhancement (I-RIDE) program is a road user fee for each mile traveled by a vehicle in Illinois. Utilizing a public-private partnership agreement, the I-RIDE allows Illinois motorists to choose their own pay-as-you-drive plan through various technologies. Depending on the rate schedule, the I-RIDE allows the state to bring its roads, bridges, and rail lines back up to acceptable levels of quality or to create the highest-class infrastructure in the nation. The I-RIDE would increase infrastructure investment funds by $2.6 billion annually for the state and would support over 31,000 new jobs every year under “full capacity” rates. The I-RIDE allows the state to be a global leader in smart, comprehensive infrastructure investment policies that grow the economy, alleviate traffic, and modernize transit. The Illinois Road Improvement and Driver Enhancement program should be implemented.

ICYMI: Illinois Teens and the Minimum Wage

Following a 2014 study on the impact of raising the minimum wage to $10.00 per hour, ILEPI has once again teamed up with Professor Bruno at the University of Illinois at Urbana-Champaign to analyze the effect of minimum wage increases on teens in Illinois. The Illinois Teens and the Minimum Wage: The Impacts of Minimum Wage Hikes, 2004-2013 Economic Commentary studies five minimum wage hikes over ten years in Illinois. The report finds that the only conclusive effect on teens is that every $1 increase in the minimum wage boosts average hourly incomes by about $0.50 and raises the lowest-paid teens’ incomes by $0.71 per hour, reducing relative income inequality. On the other hand, impacts of minimum wage hikes on employment outcomes and schooling are inconclusive. To improve labor market outcomes for teen workers, the minimum wage should be increased and indexed to inflation.

Attack on Workers: “Big” Labor?

A January 12, 2015 ILEPI Economic Commentary evaluates actual data to assess the claim that labor union officials and top staffs are “overpaid.” The findings in The Pay of Union Leaders: Debunking the “Big” Labor Myth conclude that blanket notions of labor leaders who earn unwarranted salaries are unsupported by the evidence. Payroll costs of labor organizations were just $33,595 per worker in 2012, on par with employee compensation in social advocacy organizations, community housing services, and employment agencies. Payroll costs for business associations, on the other hand, averaged $67,069 per worker. Additionally, the reported salaries the highest-paid union leaders fall far below the comparable figures for CEOs and executives in the relevant private sector institutions. Finally, there is no statistically-significant impact on hourly income for those in leadership positions if they are employed by a labor union. Instead, union leaders are compensated based on their level of education and on their ability to raise and compress worker wages.

Local Issues: Building a Strong McHenry County

A report on prevailing wage in McHenry County, Illinois finds payroll costs reflect the wages paid in the regional labor market. 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.

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