New Report Shows Unions Help Combat Income Inequality In Illinois

mike2aprilA new report from the University of Illinois shows that unions help combat income inequality in Illinois.

Co-Authors Frank Manzo, a research associate at the university’s Labor Education Program, and Robert Bruno, a professor of labor and employment relations, detail their findings in “The State of Working Illinois 2013”

Manzo and Bruno point out that the decline in unionization is a key reason why the state has experienced such high levels of income inequality, which can stifle economic growth. Their report suggests that increasing unionization would not only be a win for workers but also for economic growth in the state.

Union membership for the state’s working-age residents dropped from 20.6 percent in 2002 to 17.2 percent in 2012, which increased Illinois’ income gap. That’s because median union employees, who make an average of $43,687 a year, earn $10,682 more than their nonunion counterparts. Overall, union workers on average earn 5.7 percent more in income than similar nonunion employees.

Union workers in the bottom 10 percent earn an average of $14,685 a year, compared to the meager $3,701 for nonunion workers. As the report noted, unions play a key role in preventing workers from falling into poverty.

The decline in union membership also puts more pressure on public resources because workers without the benefits that unions typically provide, such as health care and pensions, often depend on government programs.

The authors offered recommendations to address the decline in unionization in Illinois.

  • The state should continue to promote workers who want to form a union. Also, employers should be forced to put up a notice detailing workers’ rights, even for those who are not in a union. Specifically, these notices should discuss lawful, collective actions employees can take in an effort to improve their pay and workplace conditions.
  • The state avoid right-to-work policies, which weaken the labor force and drag down wages.

“Other states have tried this, and although it’s garnered their governors some national press, it’s really been to the detriment of those states that have tried it because it creates a culture of insecurity among workers,” said Robert Bruno. “Those policies failed, so it’s time to try something different – namely, worker-friendly policies.”

While union membership in Illinois has declined, the percentage of workers in lower-quality, part-time jobs has seen an uptick. In 1995, the share of Illinois workers who worked part-time was 15.5 percent. But that figure spiked to 19.2 percent, or nearly one-fifth of the workforce, in 2012.

“Given that we’ve shifted so much of employment to part-time, informal or conditional work, raising the state’s minimum wage would be of great help to lower- and middle-class workers,” Bruno said.

In addition to raising Illinois’ $8.25 minimum wage, the report called for the expansion of the state’s earned income tax credit, a more progressive income tax, crackdown on wage theft and increase investments in childhood education and public infrastructure.

“If you combine a minimum wage hike with the expansion of the earned income tax credit, that would be an immediate help to low-wage workers,” said Frank Manzo. “Those two moves alone would lower inequality and stimulate the state economy.”

UFCW Local 1546 represents workers in Illinois and Indiana in a diverse range of industries including grocery and drug retailers; meat cutting, processing, and packing; chemical works; nursing home and healthcare facilities, and many others.