Why ‘right-to-work’ was always wrong for Michigan: Restoring workers’ rights is key to reversing growing income inequality in Michigan
The Michigan state legislature is poised to make history this week by repealing an anti-union “right-to-work” (RTW) statute enacted in 2012. This repeal is an important step toward empowering workers to address historic levels of income inequality and unequal power in our economy, and would mark the first time a state has repealed a RTW law in nearly 60 years.
For decades, Michigan boasted the highest unionization rate in the country—and relatively higher median wages resulted for the state’s workers. In this blog post, we find that as recently as 2005, Michigan’s unionization rate was 1.69 times the national rate, and the state’s median wage was 6% higher than the national median.
But after lawmakers passed RTW in 2012, Michigan’s unionization rates declined faster than in the nation as a whole, and the state’s relative median wage fell below the U.S. median. Attacks on Michigan workers’ rights have especially benefited the rich—declines in unionization rates have been accompanied by dramatic increases in income inequality, with half of all income in the state now going to the top 10%.
The repeal of RTW in Michigan—in tandem with Illinois voters approving a constitutional Workers’ Rights Amendment (which bans future RTW laws) in 2022 and Missouri voters overwhelmingly rejecting their legislature’s attempt to impose RTW restrictions in 2018—would also signal an important turning point after a decade of extreme anti-union state legislation in the Midwest that has suppressed wages and eroded job quality.
Two years later, American Rescue Plan funds are still a transformative resource: State and local governments—particularly in the South—should invest unspent funds in workers, families, and communities
The American Rescue Plan Act (ARPA) celebrated its second anniversary on March 11. In those two years, ARPA has supported a strong economic recovery and, through its provision of $350 billion in State and Local Fiscal Recovery Funds (SLFRF), allowed state and local governments to make transformative investments in their communities.
At the time of President Biden’s inauguration on January 20, 2021, the U.S. economy had recovered less than 60% of the 22 million jobs lost during the pandemic recession. Overall, 26.8 million workers—15.8% of the workforce—were either unemployed, out of work due to the pandemic, or employed but experiencing a drop in hours and pay. Additionally, key economic indicators suggested that the economic recovery had begun to reverse.
The American Rescue Plan Act was both a vital emergency measure that helped the nation through the worst of the COVID pandemic and a significant step toward addressing the nation’s economic inequalities. The $1.9 trillion package provided fiscal relief at the necessary scale to counteract the negative economic impacts of COVID. As a result, 2021 and 2022 saw the highest job growth of any of the past 40 years.
As ARPA enters its third year, state and local policymakers should use their remaining SLFRF dollars to rebuild public-sector workforces and support low-wage workers and their families. In particular, many Southern states have significant amounts of unspent funds, and workers, families, and underfunded public services could greatly benefit from the local economic boost SLFRF investments allow.
High and rising teacher vacancies coincide with a steep decline in the overall well-being of the teaching profession
In a recent EPI report investigating the national teacher shortage, we documented a large and growing number of teaching vacancies, which we linked to poor compensation and highly stressful working conditions. The data we assembled show that teacher pay has been falling relative to college graduates in other fields since 1979, and reported levels of teacher stress are comparable to other jobs that are typically recognized as being stressful, such as nursing or being a manager or executive. A recent working paper by Matthew A. Kraft and Melissa Arnold Lyon has similar findings after casting an even wider net over the data.
In their report, Kraft and Lyon examine four broad sets of indicators of the overall well-being of the teaching profession: professional prestige, interest in teaching, enrollment in preparation programs, and job satisfaction. They compile nationally representative time-series data and find compelling evidence of four distinct periods in the status of teaching over the last half century: a rapid decline in the 1970s, a quick rise in the early- to mid-1980s, no significant change over the next 20 years, and the start of a steep decline around 2010. Kraft and Lyon’s findings since 2010 are very similar to what we found: While the pandemic exacerbated challenges facing teachers, “most of these declines occurred steadily throughout the last decade suggesting they are a function of larger, long-standing structural issues with the profession.”
February jobs report shows a resilient but sustainable labor market: The Fed should not put the economic recovery at risk
Below, EPI economists offer their initial insights on the jobs report released this morning, which showed 311,000 jobs added in February and wage growth continuing to decelerate.
Job openings fell in January, while layoffs increased
Below, EPI senior economist Elise Gould offers her initial insights on today’s release of the Job Openings and Labor Turnover Survey (JOLTS) for January. Read the Twitter thread here.
Job openings fell in January 2023, according to the latest #JOLTS data, while hires ticked up. Total separations were unchanged, but quits dropped slightly and layoffs increased slightly. https://t.co/dXEZgZoGFw pic.twitter.com/KCWsAvuszp
— Elise Gould (@eliselgould) March 8, 2023
The level and rate of hires ticked up in January, not surprising given the strong job growth in the payroll survey. Total separations held steady, while layoffs rose and quits fell. Both are key indicators to watch in coming months as measures of workers’ economic security. pic.twitter.com/x9HkXq5gBo
— Elise Gould (@eliselgould) March 8, 2023
Five principles for making state and local reparations plans reparative
We are still living in the aftermath of 2020’s overlapping crises of racial injustice, our nation’s polycrisis. Between the emergence of the COVID-19 pandemic, the ensuing economic recession, and the public police murder of George Floyd, we saw a harsh truth about the structure of American political economy: White supremacy has shaped our institutions such that their outcome is consistent Black precarity and premature death.
This confluence of tragedies brought awareness of the Black American condition to a new generation. It also reinvigorated interest among academics and policymakers to finally do something about the problem of racial disparities (though activists and community organizers largely never lost interest in this).
This renewed awareness and interest in addressing racial disparities brought attention to arguably the only structural solution to persistent Black-white economic and social disparities, one that we have put off as a country for generations: reparations for slavery, Reconstruction, Jim Crow, and mass incarceration.
The Supreme Court is poised to strike down affirmative action and student loan forgiveness: These decisions would threaten college enrollment and completion for students of color
In the wake of the appalling decision to overturn Roe v. Wade, the Supreme Court is yet again at the forefront of repealing sweeping legislative precedent that will change the lives of millions of Americans. Following arguments from Harvard University and the University of North Carolina on whether race-conscious admission programs are lawful, the Supreme Court is expected to overturn affirmative action in college admissions later this year.
Similarly, the Supreme Court will hear arguments later this month over President Biden’s student loan debt relief plan that would forgive at least $10,000, and up to $20,000, for tens of millions of federal student loan borrowers. The Supreme Court will likely strike down the plan.
Both affirmative action and student loan debt forgiveness are critical measures for college access and completion for students of color. Sadly, these statutes, along with many others, have been targeted and threatened within the courts over the years—leaving students of color to bear more acute barriers to higher education and more disparate socioeconomic outcomes.
U.S. trade deficit hits another record high in 2022
The U.S. goods trade deficit reached a record $1.182 trillion in 2022—an increase of $105 billion from the 2021 trade deficit—according to U.S. Census Bureau data released this morning. Below, EPI senior economist Adam S. Hersh offers his initial insights. Read the Twitter thread here.
EPI retracts fact sheet on employer violations in union elections
The Economic Policy Institute recently published a fact sheet on illegal employer behavior during union election campaigns. Out of an abundance of caution, we are retracting the fact sheet due to inaccuracies with the underlying data. Instead, we refer readers to earlier research showing that U.S. employers are charged with violating federal labor law in four out of every ten union election campaigns.
EPI will update the data in a forthcoming report. We deeply regret the error.
Labor market off to a strong start in 2023: 517,000 jobs added in January as unemployment rate hits historic low
Below, EPI economists offer their initial insights on the jobs report released this morning, which showed 517,000 jobs added in January, the unemployment rate hitting a historic low of 3.4%, and wage growth slowing.
From EPI senior economist, Elise Gould (@eliselgould):
Read the full Twitter thread here.
The labor market is off to a strong start this year with 517,000 jobs added in January, an unemployment rate at a historic low of 3.4%, and wage growth that continues to decelerate, slowing down to 3.7% at an annualized rate (down to 4.4% growth over the last year).
— Elise Gould (@eliselgould) February 3, 2023
Message to the Fed: Wage growth continues to decelerate no matter how it’s measured. These trends are not driving inflation. pic.twitter.com/94jmSRCWvR
— Elise Gould (@eliselgould) February 3, 2023
Not only was job growth in January stronger than anticipated, the revisions were larger as well. After benchmarking against UI records, total payroll employment for March 2022 was revised up by 568k jobs. Total establishment survey revisions increased December 2022 jobs by 813k! pic.twitter.com/hqk3KyytlH
— Elise Gould (@eliselgould) February 3, 2023
From EPI president, Heidi Shierholz (@hshierholz):
Read the full Twitter thread here.
Important note! I wouldn’t normally be happy that wage growth is slowing, but the thing here is that *inflation is slowing much faster than wage growth is slowing.* That means real wages are rising, which is great news (this wasn’t happening in ’21 or the first half of ’22). 2/
— Heidi Shierholz (@hshierholz) February 3, 2023
Folks, over the period of slowing nominal wage growth of the last 10 months, the labor market has added 365,000 jobs per month on avg, and the unemployment rate is down to 50-year lows. It looks like the economy can have a soft landing, if the Fed doesn’t stand in the way. 4/
— Heidi Shierholz (@hshierholz) February 3, 2023
State and local governments have gained back less than 2/3rds of what they lost in the spring of 2022.
The gap in state & local jobs is a crisis, BUT IT DOESN’T HAVE TO BE. State & local governments can and must use their ARPA funds to raise pay and refill those jobs. 8/— Heidi Shierholz (@hshierholz) February 3, 2023