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.

A “Donor State” in Crisis: Illinois’ Federal Problem

Illinois ranks 46th in funding from the federal government. According to a June 2015 policy brief from the Illinois Economic Policy Institute, Illinois residents are more productive and earn higher wages than the national average. As a result, Illinois workers contribute more in federal income and employment tax revenues that their counterparts across the country, which the federal government subsequently redistributes disproportionately to low-wage (especially “right-to-work”) states. Thus, while Illinois residents contribute 19.2 percent more in federal taxes than the national average, they receive 32.2 percent less in federal funding for state government operations. If federal funding to Illinois matched the national average, the state government would have $8.0 billion more in revenues. The current $6.2 billion budget deficit would become a $1.8 billion budget surplus. Moreover, if Illinois received the same level of federal support given to “right-to-work” states, the state would have up to $11.5 billion in additional revenues. Instead, while their state government annually struggles to balance its budget, Illinois residents have been subsidizing the budgets of 45 other states. Since it makes little sense for Illinois to risk declaring bankruptcy when its residents have been bailing out other states for years, the federal government should increase funding to “donor states.”

The policy brief, Illinois Can No Longer Afford to Be a Donor State: Illinois Ranks 46th in Federal Funding, is available on the Research page.

FYI: How Prevailing Wage Works in Chicagoland

In efforts to educate the public on prevailing wage in Illinois, the Illinois Economic Policy Institute (ILEPI) has conducted county-level reports on the local construction labor market. The series has begun with counties in the Chicago metropolitan area. As of June 22, 2015, ILEPI has completed Economic Commentaries on “How Prevailing Wage Works” in McHenry County, DuPage County, Kane County, and Lake County. If you or your legislator is unfamiliar with the local market wage for public construction workers in your area, check out those studies under “Economic Commentaries” on the Research page.

Spotlight: The State of the Unions in 2015

In May 2015, researchers from the Illinois Economic Policy Institute, the University of Illinois, and the University of Chicago jointly released The State of the Unions 2015: A Profile of Unionization in Chicago, in Illinois, and in America. The report finds that, even though the unionization rate has declined, the total number of union members in Illinois has increased from 800,000 in 2012 to about 830,000 in 2014. Union membership rates increased for male workers, young workers, construction workers, protective service workers, and the public sector in the past year (2013 to 2014). Furthermore, African-Americans and workers with master’s degree rank as the most-unionized demographic and educational groups. In the Illinois labor market, economic analysis reveals that the workweek of union workers is 2.3 hours longer than the equivalent for nonunion workers, and union membership raises the average worker’s hourly income by 11.9 percent on average. The report also discusses recent political developments in Illinois and how they might impact union workers. Labor unions continue to play a vital role in Illinois’ economy, communities, and social life.

A Smoother Path: 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. Additionally, in May 2015, ILEPI added a slideshow outlining the proposal found under “Policy Presentations” on the Research page.

ICYMI: Local Right-to-Work Zones

The Illinois Economic Policy Institute and the University of Illinois have released The Impact of Local “Right-to-Work” Zones: Predicting Outcomes for Workers, the Economy, and Tax Revenues in Illinois. The report investigates the economic and policy impacts of adopting local “right-to-work” laws in Illinois. The study evaluates the 102 counties in Illinois and finds that higher union membership rates have no discernible impact on employment growth, establishment openings growth, or average household income growth. The analysis also concludes that, if half of Illinois’ counties adopted “right-to-work” ordinances, total labor income would fall by $1.3 billion, the state economy would shrink by $1.5 billion, state and local tax revenues would be reduced by $80 million, and racial and gender income inequality would both increase. Local right-to-work zones would eradicate good middle-class jobs, replacing them with low-wage employment openings and empowering wealthy owners at the expense of employees, the middle class, and taxpayers.

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