Workers rights amendment would be good for public budgets

While there has been major progress in recent years, there’s no doubt that more needs to be done to improve public budgets in Illinois. Research shows that one of the most effective ways to strengthen our state’s finances is to have a workforce that is well-compensated.

Workers who make more money turn around and spend that money in their local community, generating revenue for state and local government through their economic activity. They also contribute more in income taxes and are less likely to rely on government assistance programs.

By strengthening access to collective bargaining, the Workers’ Rights Amendment that is on the ballot this November would promote the creation of more middle-class jobs that provide competitive wages and salaries to workers. This, in turn, would result in greater revenue being paid to, and less spending on support programs by, state and local governments — thus relieving the financial pressure to raise tax rates.

Simply put, when workers make more money, there is less need to raise taxes.

That’s why new research from the Illinois Economic Policy Institute and the University of Illinois at Urbana-Champaign has concluded that passage of the Workers’ Rights Amendment is a win for workers, a win for the economy, and a win for Illinois taxpayers.

The data shows that union workers earn 15% more in Illinois than their nonunion peers. They also contribute more in state income taxes and are half as likely to rely on Medicaid and food stamps than nonunion workers. Additional research by two University of Minnesota economists found that union workers are $1,300 better for public budgets every year.

When workers earn higher incomes, they are more likely to own their homes. Union households have an 8% higher homeownership rate, and their median wealth is about $150,000 higher than nonunion households.

By ensuring the fundamental right to collectively bargain and unionize, the Workers’ Rights Amendment would guarantee access to this critical pathway to prosperity for working families — and prevent Illinois’ property tax base from shrinking.

Some groups see cuts to workers’ salaries, benefits, and retirement plans as the only option to solving our fiscal challenges. However, the research shows that this would be bad policy at a time when Illinois’ working families are struggling with historically high inflation. It would also result in a significant hit to state and local governments as those families have less money in their pockets and so pull back on economic activity.

With six credit upgrades in recent years, our state’s finances have been on the right track. But that doesn’t mean we should stop promoting good public policy that improves our financial standing. By growing wages, increasing revenues, reducing government assistance costs and relieving pressure on tax rates, the Workers’ Rights Amendment is a valuable policy tool for our state.

Illinois must continue to strengthen its economy and finances for the long term. The data shows that passage of the Workers’ Rights Amendment would be a step forward in our efforts to build a strong and resilient post-pandemic economy while benefiting taxpayers across Illinois.

Frank Manzo IV is the executive director of the nonpartisan Illinois Economic Policy Institute.

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