Anti-worker policies have weakened the economy in the Midwest in recent decades, according to a new Economic Policy Institute report examining the state of employment, wages, poverty, and union density in the region. While federal relief efforts during the pandemic gave the Midwest—and the rest of the country—a boost, the sunsetting of those relief programs has put workers and families back in a precarious position. 

The report finds:  

• The Midwest has had the slowest median wage growth of any region in the country since both the Great Recession and the beginning of the pandemic. A significant bright spot of the current recovery nationally and in the Midwest has been the largely unprecedented improvement in wages for the economy’s lowest-paid workers. However, between 2019 and 2022, wages for the typical worker increased only $0.08 (0.4%) in the Midwest, while the Northeast and West saw increases of more than a dollar (5.7% and 4.7%, respectively). Relative to 2007, median wages in the Midwest have grown only 5.8% as of 2022. 
• The Midwest’s unemployment rate is at a historic low, but racial disparities remain significant. The Midwest has the nation’s lowest unemployment rate (3.2% as of May 2023) and highest prime-age employment-to-population ratio (81.9% in 2022). However, the Black unemployment rate is more than 2.5 times the white unemployment rate. 
• Union density has declined in the Midwest more than in any other region since 1979. The Midwest’s union membership rate dropped from 28.9% in 1979 to 11.0% in 2022. Once a union-dense region, the Midwest today has only one state (Minnesota) that ranks in the top 10 for union membership. 
• The Midwest lags the rest of the country in access to paid sick leave. In the Midwest, 72% of private-sector workers report having access to paid sick leave, which is lower than the West (89%), Northeast (82%), and national average (77%). 
• A strong federal policy response reduced poverty during the pandemic, but poverty rates are rising as relief programs end. A weak policy response in the wake of the Great Recession exacerbated poverty, but the strong policy response to the pandemic recession led to a significant drop in poverty rates (as captured by the supplemental poverty measure) in the Midwest and nationwide. Unfortunately, the sunsetting of pandemic relief programs means poverty rates have returned to their previous levels. 

From the end of World War II until the mid-1980s, the Midwest enjoyed relatively low inequality and high worker wages, in large part due to high rates of union membership. In the wake of the Great Recession, however, most Midwestern states have implemented policies that have worsened job quality and reduced economic security for working families, such as passing so-called right-to-work laws and preempting local governments’ efforts to improve labor standards. As a result, the Midwest has endured years of slow wage growth and declines in unionization. 

“The Midwest once led the country as a region ripe with high-quality, union jobs and pathways into the middle class. Yet this leadership has been challenged by years of relentless attacks on unions, deindustrialization, and the failures of policymakers to prioritize working families’ economic security,” said report co-author Nina Mast, who is an economic analyst for EPI’s Economic Analysis and Research Network. “Midwestern policymakers have an opportunity to reverse course by repealing anti-worker policies and putting worker-friendly policies in their place, such as raising minimum wages, enacting paid sick and family leave legislation, protecting the right to organize, and investing in the public sector.” 

The influx of federal funds from the CARES Act, the American Rescue Plan Act (ARPA), and other federal legislation blunted the worst economic effects from COVID. But as federal investments begin to phase out, Midwest policymakers must act now to maximize the impact of federal relief funds. 

“Midwestern policymakers face a critical juncture. The impact of the federal pandemic response shows clearly that good policy can change people’s lives for the better. State lawmakers must seize the opportunity to enact policies that will increase job quality and build racial equity,” said Dave Kamper, report co-author and senior state policy coordinator for EPI’s Economic Analysis and Research Network.