Today, 40 organizations led by the Economic Policy Institute, We Build Progress, the AFL-CIO Tech Institute, and Workshop delivered the letter below urging Congress to center workers in federal AI legislation. 

Dear Member of Congress: 

Employers’ increasing use of AI systems has the potential to affect the lives and livelihoods of workers across the country. Without appropriate guardrails, employers’ integration of these technologies may jeopardize workers’ rights, put workers at risk of discrimination, violate privacy rights, and dramatically impact the economic stability of working families.

These risks posed by technological change are not new. For years, employers have used algorithmic or automated systems and similar technologies in ways that harm workers. Now, the pervasive and growing integration of AI into the workplace is amplifying these risks. These impacts on workers are further exacerbated by persistent power imbalances in the labor market that favor employers. 

It is urgent that Congress take action. It has been nearly two years since the Bipartisan Senate AI Working Group released its roadmap for AI policy, but the Senate has yet to consider comprehensive legislation. AI adoption is moving forward at breakneck speed, and America’s workers cannot afford to wait. 

We applaud members of Congress who have introduced worker-focused legislation addressing issues like civil rights, surveillance in the workplace, and improvements to labor market data. Efforts at broader federal reform must also center the impacts of AI on workers. Under these circumstances, we urge the newly formed House Democratic Commission on AI and the Innovation Economy to center the recommendations of members with expertise in workers’ need for strong labor protections and AI’s impact on the economy. 

The urgency of this moment is further compounded by the Trump administration’s decision to prioritize corporate capture over the public good. In December, after Congress again declined to preempt critical state efforts to regulate AI, President Trump issued an Executive Order that purports to block states from protecting their own residents—a move that blatantly infringes on states’ rights while offering no federal alternative. The administration has doubled down with a national AI legislative framework that would severely curtail states’ ability to regulate AI. Rather than respecting states’ authority to protect their own residents, the administration is doing the bidding of tech oligarchs. 

The AI industry, venture capitalists, and lobbyists spent hundreds of millions of dollars last year pressuring Congress to pass legislation that would prevent state lawmaking. These attempts have failed multiple times because a significant number of members across both parties recognize the dangers posed by AI, while industry actors continue to push for deregulation. 

This is not what the public wants. Recent polling shows a bipartisan consensus in support of AI safety measures: 88% of Democrats and 79% of Republicans favor maintaining existing rules for AI security. Many people want more guardrails on AI: Majorities of both parties are in favor of new regulations to protect society, including 63% of Democrats and 59% of Republicans. 

Federal action is necessary, but it must also leave states room to innovate. Not all states are taking action, so Congress must provide a baseline of protection for people across the country, with a core focus on workers’ rights and livelihoods. 

But federal legislation should be a floor, not a ceiling. Locking the U.S. into a static, insufficient federal framework would guarantee that protections will swiftly become obsolete. It’s important that policymakers do not build a framework that is so narrow or rigid that it fails to keep up with constantly changing AI risks and shifting economic conditions, leaving workers vulnerable to new risks from new tools and practices.

A strong federal framework can create a reinforced system of guardrails to help working people navigate the growing use of AI. Congress has a responsibility to act now—the well-being of our workers and communities depends on it.

Sincerely,

AFL-CIO 

AFL-CIO Tech Institute 

AFT 

American Federation of State, County and Municipal Employees

Americans for Responsible Innovation 

California Initiative for Technology and Democracy

California School Employees Association 

Care in Action

Center for Democracy & Technology 

Center for Oil & Gas Organizing

The Century Foundation 

Communications Workers of America (CWA) 

Consumer Federation of America 

Data & Society 

Economic Policy Institute 

Encode AI 

Future of Life Institute

Interfaith Center on Corporate Responsibility

Jobs With Justice 

The Leadership Conference on Civil and Human Rights 

Legal Aid Justice Center 

Louisiana Progress 

National Action Network 

National Association of Voice Actors 

National Black Worker Center 

National Domestic Workers Alliance 

National Employment Law Project 

National Employment Lawyers Association 

National Institute for Workers’ Rights 

National Partnership for Women & Families 

National Women’s Law Center 

Open MIC (Open Media and Information Companies Initiative) 

Oxfam America

Public Citizen 

Service Employees International Union (SEIU) 

TechTonic Justice 

United Church of Christ Media Justice Ministry

United Food and Commercial Workers International Union 

We Build Progress 

Working Partnerships USA 

Workshop 

Writers Guild of America West

Key takeaways:

• The growing revenue of college sports and the heightened attention on the experience of college athletes suggest that college athletics is far from the amateur endeavor it might have started as decades ago.
• Recent policy changes have allowed some college athletes to receive compensation, whether in the form of name, image, and likeness (NIL) rights or revenue sharing. However, not all college athletes have the right to be compensated.
• The NCAA has backed the SCORE Act, which would jeopardize college athlete compensation by prohibiting them from being classified as employees in the first place.
• Policymakers should consider proposals that strengthen rights for college athletes, including granting them employee status under federal labor laws.

Introduction

It has long been argued that college athletes should not receive compensation to maintain the “amateurism” of college sports. However, the growing revenue generated from college sports and heightened attention on the experience of college athletes suggest that college athletics is far from an amateur endeavor.

Only recently have college athletes been granted the right to be compensated for name, image, and likeness (NIL) rights. This decision came into effect after years of antitrust lawsuits against the National Collegiate Athletic Association’s (NCAA) compensation rules. These lawsuits culminated in the Supreme Court decision in NCAA v. Alston, as well as a growing number of states enacting their own compensation laws for college athletes. The recent House v. NCAA settlement allows Division I schools—those with the largest and most economically lucrative athletic programs—to share revenue with college athletes, and further expands opportunities for college athletes to receive compensation.

As a result of these policy changes and a growing movement among college athletes to demand fair compensation for their performance, federal policymakers have put forward proposals to address college athlete compensation. In this blog post, we examine these proposals and their impacts on college athletes and their labor/employment status.

A brief history of college athlete compensation

Despite claims of “amateurism” in college sports, the experience of college athletes showcases a reality in which athletics is prioritized over academics. For example, while the NCAA puts limits on how many hours college athletes can engage in athletic-related activities during playing season, many coaches create expectations for students to exceed these limits, with some athletes exceeding over 40 hours per week. News coverage has reported that coaches have issued fines to athletes who miss practices. Many college athletes are also required to travel for their games, forcing them to miss classes. If college athletes fail to meet these expectations, they may be cut from the team, which could jeopardize future scholarships and other academic opportunities.

Simply put, some college athletes are expected to perform a physical regimen that more closely resembles professional sports than amateur endeavors on top of their academic coursework. The athletic commitment is demanding enough to be its own job, yet college athletes are performing them without any meaningful compensation in return.

In recent years, there have been several policy changes related to college athlete compensation. In 2019, California became the first state to pass a law that granted college athletes NIL rights. The NCAA permitted NIL compensation in 2021 and since then, more than 30 states have enacted laws related to college athlete compensation, with remaining states deferring to NCAA rules to regulate such compensation.

A primary driver of the NCAA’s change of rules regarding NIL compensation was the 2021 Supreme Court decision in NCAA v. Alston. The unanimous decision upheld a lower court decision that found the NCAA’s rules restricting certain educational benefits for college athletes violated federal antitrust laws. In a concurring opinion, Justice Brett Kavanaugh questioned “whether the NCAA’s remaining compensation rules can pass muster under ordinary rule of reason scrutiny” and suggested collective bargaining as an avenue for college athletes to receive a fairer share of the revenue that they generate for their schools. Soon after the NCAA v. Alston decision, the National Labor Relations Board (NLRB) General Counsel Jennifer Abruzzo issued a memorandum taking the position that college athletes are employees under the National Labor Relations Act.

In response to this memo, men’s basketball players at Dartmouth College filed for a union election petition at the NLRB; however, the petition was withdrawn shortly after the 2024 presidential election. In January 2025, Acting General Counsel William Cowen rescinded Abruzzo’s memorandum, leaving college athletes’ employee status in limbo.

The House v. NCAA settlement, which allowed Division I schools to share revenue directly with college athletes, was another turning point in the college athlete compensation landscape. The majority of states with college athlete compensation laws have considered legislation to modify their statues to reflect the terms of the House settlement, but not all have done so.

Who are college athletes?

The National Collegiate Athletic Association is the governing body for college athletics in the United States, overseeing sports programs for 557,000 college athletes at more than 1,100 colleges. It organizes institutions into three divisions based on size, athletic scope, and financial resources. Division I schools are the largest, with the most extensive athletic programs and highest scholarship limits. Approximately 37% of college athletes compete for Division I schools. Division II schools offer fewer scholarships and financial resources, while Division III has the greatest share of college athletes (38%), but offers no athletic scholarships.

During the 2024–2025 school year, the college athlete population was 57% male and 43% female. These young men and women are diverse: 61% are white, 16% are Black, 7% are Hispanic or Latino, 7% report more than two races, and 2% are Asian. Breaking down demographics by race and gender, we find that white males make up the largest group at 32%, followed by white females at 28%, Black males at 12%, and Black females at 4%. The remaining athletes fall into other demographic categories. If we focus on men’s basketball and men’s football athletes at the highest revenue-earning,1 there are 11,504 total athletes, 32% of whom are white and 48% of whom are Black, with the remaining athletes falling into an “other” race category.

Figure A

In terms of geography, college athletes tend to be from the most populous states. According to estimates using NCAA data and population data from Census, most student-athletes are from California, Texas, Florida, New York, and Pennsylvania (in descending order). On a per capita basis, it is Georgia, North Carolina, and Michigan (in descending order) that produce the highest rates of college athletes. This is likely due to having several large state universities with strong athletic programs and an impressive high school sports infrastructure. NCAA-affiliated institutions are also concentrated in the populous states, but especially among states in the Northeast. The states with the most NCAA schools are Pennsylvania (96), New York (93), California (59), Texas (53), and Massachusetts (51).

Current policy landscape

As mentioned above, many states have enacted laws that grant college athletes NIL rights. In the wake of the House v. NCAA settlement, there have been calls for federal policymakers to pass legislation addressing college athlete compensation.

One of the most prominent pieces of federal legislation is the Student Compensation and Opportunity through Rights and Endorsements (SCORE) Act. Backed by the NCAA, this bill would prohibit college athletes from being classified as employees, denying basic labor rights to over half a million young people. The bill creates a federal standard for NIL rights. In doing so, the SCORE Act preempts state legislation concerning college athlete compensation, creating a ceiling rather than a floor for setting standards around college athlete compensation. Further, the SCORE Act limits the types of NIL deals athletes can enter, places caps on NIL payments, and restricts athletes’ abilities to transfer and play at new schools. Finally, the bill would grant the NCAA broad antitrust immunity by authorizing them to limit revenue sharing and education-related benefits to athletes.

On April 3, 2026, President Trump issued an executive order on college athletics. Similar to the SCORE Act, the order directs the NCAA to tighten rules on transfers, eligibility, and NIL compensation, threatening noncompliant schools with the loss of federal funding. It does not, however, address whether college athletes are employees (an earlier executive order from Trump directed the Department of Labor and National Labor Relations Board to clarify employee status of college athletes). Multiple lawyers have argued the latest executive order would not survive a legal challenge. The NCAA president nonetheless praised it, and both the administration and conference commissioners are using the order to push Congress to pass the SCORE Act.

The Student Athlete Fairness & Enforcement (SAFE) Act is another proposal that seeks to codify a federal standard for NIL rights. However, unlike the SCORE Act, the SAFE Act establishes strong health and safety protections for college athletes, allows flexibility for transfers, and places penalties on bad actor agents, among other reforms. Furthermore, the bill does not address college athletes’ employee status or shield the NCAA from antitrust liability.

By far the most effective policy solution for college athletes to be fairly compensated is to grant them the right to form unions and bargain collectively. Legislation like the College Athlete Right to Organize Act  would classify college athletes as employees, granting them the right to form unions and bargaining collectively under the National Labor Relations Act. The bill would also amend the NLRA to define public colleges—in addition to private colleges—as an employer in the context of intercollegiate sports so that all college athletes have the right to organize and collectively bargain.

Below we evaluate whom these proposals impact and estimate how much revenue the college sports industry generates under current compensation policies.

College athlete demographics versus college attendee demographics

College sports are frequently presented as disproportionately Black, but the data show a slightly different story. Black college athletes make up roughly 16% (89,000) of all college athletes compared with 13% (3.31 million) of the total college student population, not significantly different from the NCAA share. Hispanics are drastically underrepresented in the NCAA, accounting for only 7% of college athletes, despite representing over 20% of total college enrollment. In fact, it is white college athletes, and white male athletes in particular, who are disproportionately represented in college athletics: While 61% of college athletes are white and 32% are white males, only 48% of all college students are white and only 19.1% are white males. Notably, it is Black female athletes who are left out of NCAA college athletics at the highest rates. While they account for 8.3% of total college enrollment (2.14 million), they are only 4.5% of total college athletes in the NCAA (25,000).

Figure B

How much do collegiate sports make?

By far, the most economically lucrative division in the NCAA is Division I sports, which includes 37% of total athletes but generates 96% of total revenue across the three divisions, according to the NCAA. According to the Knight-Newhouse College Athletics Database (an authoritative source on college athletics finances and a better representation of self-generated revenue), Division I schools generated $14.6 billion during the 2024 fiscal year. For context, of the five major professional sports leagues in the United States, only the NFL generated more revenue than Division I schools did during the same time period. The NFL, MLB, NBA, NHL, and MLS generated $22.2 billion, $12.8 billion, $12.3 billion, $6.6 billion, and $2.2 billion, respectively, in fiscal year 2024. The primary revenue sources for NCAA Division I are media rights (27%), donor contributions (22%), ticket sales (15%), and institutional support (14%). NCAA Division I revenue has grown 115% (in 2024$) since 2015.

Figure C

Due to the House v. NCAA settlement, schools gained the ability to share revenue directly with athletes beginning in the 2025–2026 school year, adding to any third-party NIL earnings athletes may receive. Though official figures for both revenue sharing and NIL deals are unavailable, schools are currently capped at $20.5 million under the revenue-sharing agreement. Not every university joined the new revenue-sharing arrangement, but every Power 4 school did (the 68 universities in the four highest revenue-generating conferences). Under the generous assumption that all Power 4 schools share the full $20.5 million with their athletes, this would amount to approximately $1.394 billion in athlete earnings, or about 15.1% of total revenue across these conferences. For comparison, coaches at the same set of schools receive $2.3 billion in compensation or 19% of total expenditure. However, if implemented as intended, the revenue-sharing agreement would be a step-up for revenue-generating athletes. Prior to House v. NCAA, the most Power 4 schools could provide the athletes was $2 to 4 million dollars in athletic scholarship money.

Conclusion

Despite the growing revenue that athletes are generating for college sports, many college athletes are not being compensated for their work. Recent policy changes have allowed some college athletes to receive compensation, whether in the form of NIL rights or revenue sharing. However, the reality is that not all college athletes have the opportunity to be compensated. Federal policy proposals, such as the SCORE Act, would further jeopardize college athlete compensation by prohibiting them from being classified as employees in the first place. It is bad policy to deny any worker basic labor rights. Policymakers should consider proposals that strengthen rights for college athletes, including granting them employee status under federal labor laws.

Acknowledgments

The authors thank the Notre Dame Student Policy Network (SPN) for their contributions to the background research for this blog post. The authors would like to thank Billy Bonnist and Liesl Erhardt for leading the SPN team, which included Sarah Francis, Evan Fitzpatrick, Ciara Gilligan, Anvita Jaipura, Owen Murphy, and Caroline Streicker.

1. Defined as the Football Bowl Subdivision (FBS) autonomy schools or schools in the Power 4 (formerly Power 5) conferences. It is worth acknowledging that other sports also produce significant revenue, including women’s basketball, softball, men’s baseball, and women’s volleyball.

Rising authoritarianism and the need to upend the failed Southern economic development model

For generations, Southern politicians backed by powerful business interests have promoted a Southern economic development model—characterized by low wages, regressive taxation, lax environmental regulations, a weak social safety net, and vicious opposition to unions—while claiming such policies will attract business and thereby generate regional economic gains. But data actually show a grim reality. The South lags all other regions on most indicators of economic health including job growth and wages, and Southern workers and their families experience significantly higher rates of poverty than in other parts of the country (Childers 2024a).

The truth is that this Southern economic development model was never designed to benefit most Southerners; rather, it is historically rooted in efforts of white plantation owners to retain their wealth following emancipation and ensure continued access to the labor of Black people for as little compensation as possible (Childers 2025). Foundational to these efforts was an authoritarian approach to state governance that suppressed popular democracy and worker organizing—an approach that also sanctioned prison labor, sharecropping, a century of Jim Crow laws, lynching, and other forms of state-sponsored terror and exploitation. Until partially challenged by federal legal and policy interventions won by post-WWII civil rights movements, many Southern states for decades held elections that served merely to provide a cover of legitimacy to one-party rule of white, wealthy elites—functionally excluding Black voters from the electorate and blocking working-class constituencies from any meaningful participation in governance (Mickey 2015; Perez 2024; Mast 2025).

Today, the Trump administration’s increasingly authoritarian actions echo this troubling Southern history. At their foundation, the administration’s approaches to bypassing constitutional checks and balances—while rolling back civil rights, worker rights, and environmental protections; terrorizing immigrant communities; deploying military troops in U.S. cities; and attempting to engineer election outcomes via gerrymandering and other forms of voter suppression—are rooted in authoritarian models developed and tested in the U.S. South, and that Black, brown, and immigrant communities across the country are no stranger to.

Recent attempts to terminate federal employee collective bargaining agreements, for example, are familiar to public employees in Southern states for whom collective bargaining has long been banned or severely restricted. The Trump administration’s use of military-style policing in communities across the country echoes Southern histories of weaponizing law enforcement (or National Guard troops) to suppress organizing and instill fear, while prioritizing the expansion of the carceral state over investments in housing, education, and public services. Trump’s efforts to override the authority of state officials mirror Southern state uses of abusive preemption laws to strip policymaking authority from local governments. And administration attempts to halt clean energy investments and environmental protections threaten to repeat harms familiar in Black and brown communities in the South, where corporations have insisted on lax environmental regulations that allow them to degrade air, water, and climate quality, while profiting from the exploitation of local natural resources and labor.

Seizing opportunities to reverse decades of anti-worker, anti-democratic policymaking in the South at a moment of rising authoritarianism in the U.S. is a daunting and unavoidably urgent challenge. It will require robust new forms of multiracial organizing and labor-community coalition building across a broad set of industries in the South. Labor-community coalitions can leverage community benefits agreements (CBAs) as a powerful tool to transform economic power relations in Southern workplaces and communities. Because CBAs are private agreements between labor-community coalitions and project owners, they do not rely on government action and can therefore shape economic outcomes of major projects even in otherwise hostile political environments. CBAs have traditionally been fought for and won by labor and community groups coming together and building necessary public pressure to hold developers, corporations, and elected leaders accountable for ensuring that public investments in major new developments truly benefit workers and communities.

In this report, we analyze the potential for labor-community coalitions to pursue strong CBAs that secure significant economic benefits for Southern manufacturing workers and communities, drawing on examples of existing agreements to model potential impacts. We examine the scale of recent public investments in Southern manufacturing and examine how strong CBAs on major publicly-subsidized private projects could improve the quality of newly created construction and production jobs; open up pathways to unionization; ensure equitable hiring and training opportunities for local residents; and address community needs such as child care, affordable housing, and natural resource protection.

We contend that upending the failed Southern economic development model and the authoritarian structures that underpin it will require building new forms of labor and community power to increase union density in the South. Well-known research shows that unions promote economic equality and help workers win improvements in pay, benefits, and working conditions (Economic Policy Institute 2021). But unions also powerfully affect people’s lives outside of work. They help foster solidarity, increase democratic participation, enable working-class communities to shape economic policies affecting their lives, and serve as a counterweight to corporate power in our economy and democracy (McNicholas et al. 2025). Historically, unions have been engines of resistance to entrenched and undemocratic power—mobilizing working people to challenge inequality, defend civil rights, and push back against authoritarianism in all its forms. For all these reasons, strengthening labor-community coalitions and pathways to unionization in growing Southern industrial sectors is not just good economic policy—it is also a democratic imperative amid national authoritarian backsliding.

Worker and community power can ensure new manufacturing investments yield good jobs and community benefits

The latest wave of manufacturing growth in the South presents both opportunities and pitfalls for workers and communities. Southern states continue to lure businesses—including large manufacturing facilities—with promises of low corporate tax rates, low wages, lax regulations, and massive public subsidies. The automotive manufacturing industry has been a key recipient of public subsidies, receiving billions of dollars from Southern states in recent decades (Childers 2024a; Todd 2021). This system of low taxation and corporate giveaways starves other essential public goods, like education and social safety net programs (Mast 2025b). Likewise, weak or nonexistent environmental regulations have contributed to toxic sites and resource degradation that disproportionately affect Black and brown families, reflecting often intentional decisions to site hazardous facilities in low-income communities of color (Bergman 2019).

Some announced manufacturing projects have been cancelled or reduced in size after the Trump administration’s slashing of federal supports for strategic industries, but many projects launched during the Biden administration continue to move forward. These manufacturing investments, both in traditional industries and nascent ones such as electric vehicle (EV) and EV battery manufacturing, are spurring significant job growth in some Southern communities. Yet past experience shows that new investments and resulting jobs are unlikely to generate economic benefits for most Southerners unless local residents are able to ensure that developers and corporations respect workers’ rights, protect local natural resources, and contribute a fair share toward addressing priority community needs.

Community benefits agreements can be powerful vehicles for communities to secure lasting local economic benefits from major industrial development, at both new and existing facilities. A CBA is a legally enforceable contract between a private developer or company and a local coalition—typically made up of labor, community, faith, environmental, and other grassroots organizations—that details how a project will benefit workers and the community, and in turn how the community will support the project (including via potential public investment). Benefits spelled out in a CBA can include commitments to strong labor standards; respect for workers’ rights to organize; equitable workforce recruitment, training, and hiring practices; affordable housing; environmental protections; or a broad range of other community-identified priorities. CBAs are a well-developed model for responsible community development—so far mostly, but not entirely, in regions outside the South—and have been used for many different types of major projects including sports stadiums, events centers, manufacturing plants, airports, transit projects, and more (WRI n.d.).

CBAs can likewise mitigate risks for project developers by ensuring local project support and addressing important concerns early on, whereas failure to engage local communities in major development decisions can otherwise lead to strong community opposition, interruption of development, obstacles to obtaining necessary siting permits or rezoning approvals, or significant legal costs. In an example from June 2024, developers shelved plans for a $1.3 billion data center in Indiana after facing significant local opposition over environmental concerns (Fazili et al. 2025).

Because a CBA is a private, legally binding agreement, it does not require government action and can be used to shape outcomes of major projects even in contexts (as in most of the South) where state legislators have preempted local governments from establishing their own job quality or environmental standards (EPI 2025a). That being said, state and local governments can still have a role in facilitating, negotiating, or enforcing community benefits. Cities like Detroit and Cleveland have ordinances requiring developers of projects using public resources to engage in a community benefits plan process (City of Detroit n.d.; City of Cleveland n.d.). In 2005, Atlanta passed an ordinance specifying worker and community benefits for the Beltline redevelopment (WRI 2025). However, government involvement in community benefits plans does not guarantee strong agreements on its own. A strong labor-community coalition remains essential for securing meaningful community benefits.

Another key strength of a CBA is that it can set standards across all stages of a project’s development to ensure long-term benefits for the community at large. Private developers or public entities sometimes negotiate Project Labor Agreements (PLAs) or Community Workforce Agreements (CWAs) with building trades unions and community partners to set wages, working conditions, and timelines for the construction phase of a complex development project. A CBA can be negotiated alongside a PLA to also ensure pathways to quality jobs for local residents during the operational phases of a project, including any future expansions of the facility or additions to its workforce. A CBA can also secure commitments to build affordable housing, strengthen environmental standards, and provide other benefits to the community such as child care, public parks, or other community spaces.

To be successful, a CBA must also include defined enforcement mechanisms that hold all parties to the agreement accountable. It must clearly establish the obligations of each party, metrics for measuring progress, and ongoing monitoring of compliance with the agreement’s provisions (Last 2025; PWF and CBLC 2016). If the company or the coalition fails to make good-faith efforts on the agreement’s commitments, an arbitration process is initiated. While monitoring of the agreement is an ongoing responsibility of all members of the coalition, providing a pathway for workers to organize in the operational phase of a project is of particular importance. A newly established union at the project site is well-positioned to monitor the commitments of the CBA and hold the company accountable over the long term.

Organizers and advocates should be clear-eyed that while strong CBAs can yield powerful economic outcomes, such agreements are by no means easy to win. There are generally no legal requirements for a particular company or developer to recognize or engage with a labor-community coalition, much less to agree to negotiate and implement a CBA. Building the broad-based, durable coalitions and leverage necessary to compel private interests to engage in CBA negotiations (and then to implement and enforce the terms of a CBA) is unavoidably a challenging, long-term, resource-intensive organizing project. And like any worthwhile organizing, the formation of strong, durable labor-community coalitions is itself a key outcome of successful CBA campaigns. Vastly expanding the capacity of broad-based coalitions and labor, faith, environmental, and other grassroots organizations to gradually build community and worker power in Southern communities is the most essential ingredient for transforming existing power imbalances and, ultimately, upending the failed Southern economic development model.

Indeed, recent initiatives to win CBAs in Southern states have proven so threatening to some corporate interests that they have sought to undermine them. In 2025, Tennessee Republicans passed legislation prohibiting any company that enters into a CBA from receiving state economic development funds—aiming to create obstacles to replication of a highly successful CBA covering Nashville’s soccer stadium, and to discourage a coalition of West Tennessee residents and allied groups calling on Ford and SK Innovation to negotiate a CBA covering its massive BlueOval electric vehicle and battery manufacturing complex (Abrams 2025). In Tennessee and elsewhere, however, labor-community coalitions are nonetheless continuing to organize to ensure that massive, publicly subsidized new facilities yield good jobs and community benefits.

A new wave of Southern manufacturing is an opportunity to transform working conditions in growing industries—and across the South

Growth in Southern manufacturing industries presents a significant opportunity for labor-community coalitions to shape labor standards and community benefits in new plants and facilities—and to shape economic outcomes for generations of Southern workers to come. In recent years, the South has seen a wave of manufacturing investments. Between 2017 and 2023, manufacturing construction doubled in the East South Central Census division (Alabama, Kentucky, Tennessee, and Mississippi) (O’Brien 2023). The West South Central division (Arkansas, Louisiana, Oklahoma, and Texas) has the highest amount of manufacturing construction spending of any division in the U.S. These investments are part of a long-term trend of manufacturing industries locating in the South, which in recent years was accelerated by large federal investments through the Inflation Reduction Act, Infrastructure Investment and Jobs Act, and CHIPS and Science Act. These federal investments included both direct public subsidies and tax credits to businesses that invested in key clean energy manufacturing industries such as the production of batteries, electric vehicles, solar panels, and wind energy products.

In contrast to the typical economic development approach of many Southern states, some recent federal investments have included incentives meant to encourage strong labor standards on projects receiving public funds. While the future of many of these investments (and accompanying incentives) is now uncertain, the U.S. has in the past two years experienced its largest investment in clean energy manufacturing ever, and much of that has occurred in Southern states.1 Since the third quarter of 2023, more than $125 billion worth of clean energy manufacturing investments were announced across Georgia, North Carolina, South Carolina, Tennessee, Kentucky, and Texas (CET 2025). Advancing even a portion of these projects would result in thousands of jobs for Southern workers.

Independent of the future of federal support for clean energy manufacturing, the South will likely continue to be the largest manufacturing employer of all U.S. regions. Figure A shows manufacturing employment by region in the United States since 1990. While manufacturing employment overall has fallen during the last three decades, the South has retained the largest share of manufacturing employment of any region. In 2024, 35% of U.S. manufacturing employment was in the South. Furthermore, since 2010, manufacturing employment in the South has grown by 17%, the quickest growth of any region.

Figure A

Manufacturing jobs are often considered to be well-paid, benefit-providing “middle-class” jobs, but there is nothing inherent to the sector that determines their quality. Manufacturing jobs in some industries became “good jobs” thanks to relatively high levels of unionization during the mid-20th century, which improved wages, benefits, and working conditions (Bayard et al. 2024; Rhinehart and McNicholas 2020). As Figure B shows, unionization in manufacturing has fallen in all regions since 1983, but the South has almost without exception had the lowest unionization rate of any region.

Conservative Southern policymakers have long been hostile to union organizing. For example, every Southern state except Maryland and Delaware has passed anti-union so-called right-to-work (RTW) laws, which make it harder for workers to form, join, and sustain unions. Southern states like Florida and Arkansas were among the first to pass such laws in the 1940s, amid a wave of big business backlash against new federal labor laws and white supremacist campaigns to maintain racial hierarchies and suppress multiracial worker organizing. RTW laws suppress unionization rates and, as a result, have driven down wages for both union and nonunion workers alike across the South (Sherer and Gould 2025; Childers 2023).

Figure B

In 2025, Southern manufacturing had a 6.7% unionization rate—slightly below the national unionization rate for private-sector workers (6.8%). Unionization in Southern manufacturing grew by more than a percentage point between 2024 and 2025, a notable one-year reversal of the industry’s long-standing unionization decline, consistent with overall union gains in the South (McNicholas, Poydock, and Shierholz 2026). Nevertheless, Southern manufacturing’s unionization rate remains well below the Midwest’s (11.2%), the region where manufacturing is the most heavily unionized. Unions have a strong impact on job quality because they leverage worker power collectively to raise wages, win benefits like health care and retirement, and enact other meaningful workplace improvements, such as improved health and safety standards. These benefits can extend beyond unionized workers themselves, helping set standards across a workplace, and with enough density, across an industry.

As unionization declines in an industry or region, so does job quality. For instance, as unionization rates have fallen in auto manufacturing, the pay advantage for auto workers compared with the median worker has declined significantly (Barrett and Bivens 2021). Figure C demonstrates how this relationship holds across regions in 2025. Manufacturing jobs in the South have a pay advantage of 7%, the lowest of any region. Southern manufacturing workers also experience the lowest median hourly pay of any region ($24.41).2

Figure C

The Southern economic development model clearly hurts the region’s workers by denying them their right to organize and suppressing their wages, but there are harmful spillover effects for their communities as well. Corporate tax breaks with no strings attached provide billions of dollars to corporations that could otherwise be used to invest in schools and other essential government services. These types of tax breaks might be worthy of consideration if manufacturing employers were required to create high-quality jobs for local workers and make long-term investments in local community development needs (i.e., housing, infrastructure, education, etc.). Without such protections, they are simply taxpayer-funded giveaways that often drain the very resources needed to develop the local workforce recruited by large new facilities.

Southern states enact little to no regulation of workplace safety or environmental pollution. This results in unsafe workplaces with greater levels of injury and death (Childers 2024a). Environmental pollution from manufacturing sites can negatively affect public health by contaminating water, air, and soil. New manufacturing investments also can mean significant changes to the demand for housing in a community. A new plant or factory can drive up the cost of living for nearby residents without yielding any economic benefits to a local community. Labor, community, and environmental groups need to collaborate on shared solutions to effectively address these intertwined challenges.

Labor-community coalitions can obtain commitments that ensure “economic development” means shared prosperity for all

Labor-community coalitions organizing around manufacturing projects can secure commitments that offer direct economic benefits to workers and communities, while also establishing groundwork for the growth of worker and community power in the area. While a campaign to win a CBA can be the impetus for forming a local labor-community coalition, the alignment and relationships built through this shared work can lead to longer-term, sustainable coalitions capable of transforming local and state power relationships.

The following section analyzes a set of commitments that can be included in a CBA for a manufacturing project. The CBA framework is flexible and allows for the inclusion of many different types of commitments prioritized by particular groups of workers, community members, and environmental groups. This report focuses on key types of commitments including union neutrality agreements, living wage floors, equitable workforce development practices (such as local or targeted hire policies and programs to expand pathways to apprenticeship training), affordable housing provisions, child care benefits, and environmental protections. Each type of commitment is analyzed in terms of its economic impacts and effectiveness in reshaping local economic development to ensure that public investments generate broadly shared community benefits.

The construction phase and Project Labor Agreements (PLA)

This report mostly focuses on community benefits for workers during the operational phase of a manufacturing plant. Nevertheless, it is just as vital to set high labor standards during the construction phase. Strong community benefits agreements are ideally developed in tandem with strong project construction labor standards set via project labor agreements (PLAs). A PLA is a multiparty agreement between a project owner and a coalition of labor unions that sets out labor standards and dispute resolution procedures to promote stability and efficiency on complex infrastructure projects while also ensuring the project will generate good jobs. PLAs ensure that construction projects run smoothly, are safer, and pay workers fairly (Mangundayao, McNicholas, and Poydock 2022). By setting negotiated wage and benefit levels for each type of work on a project, PLAs level the playing field in highly competitive construction bidding processes; they ensure that contractors base bids on their ability to deliver on quality and efficiency, rather than low-ball cost estimates that reflect intent to pay substandard wages or cut corners on safety. By standardizing wage and benefit levels and taking them out of the competition in the bidding process, PLAs incentivize the use of skilled union labor, which is 14% more productive than nonunionized construction work (McFadden, Santosh, and Shetty 2022). PLAs typically set wages, fringe benefits, and working conditions but can also include requirements to utilize certain numbers of apprentices, hire locally or from certain target worker populations, and/or provide child care or other benefits that open up pathways to good union construction jobs for members of underrepresented groups.

Several of the types of standards for construction workers typically included in a PLA have analogous labor standards in the operational phase. For instance, a CBA can secure commitments for local or targeted hiring and the development of registered apprenticeship programs in a manufacturing facility, extending equitable recruitment and high-quality training requirements that a PLA typically sets for construction into the operational phase of a project.

Removing obstacles to unionization: Neutrality and labor peace agreements

Protecting workers’ freedom to unionize has historically been key to turning manufacturing jobs into good jobs. This remains just as true today. However, like workers across the country, Southern manufacturing workers continue to face formidable obstacles—including weak labor laws, powerful anti-union corporations, and hostile politicians—to exercising their legally protected rights to form or join a union. Employers are charged with violating federal labor law in more than 40% of union elections and spend more than $400 million a year on “union avoidance” consultants (McNicholas et al. 2019; McNicholas et al. 2023). Because existing weak labor laws do not effectively deter employers from union busting, these tactics are treated by many employers as a normal cost of doing business—stacking the deck unfairly against workers seeking to exercise their rights to organize and collectively bargain.

Union neutrality agreements can help safeguard workers’ right to form unions free of the types of interference employers often deploy. Under a neutrality agreement, an employer agrees to remain “neutral” and not interfere with workers’ decisions on whether to unionize. Such agreements typically include joint commitments to a “card check” process for verifying whether a majority of employees have indicated interest in forming a union. Unions and employers sometimes also enter into a labor peace agreement, where unions agree not to engage in certain types of picketing, work stoppages, or other economic disruptions during the organizing process in exchange for employer neutrality.

Employers can also choose to commit to union neutrality as a matter of principle or company policy. Union neutrality—providing workers a more free and fair choice to decide whether to unionize—has been a key component of successful unionization drives in Southern manufacturing. To take two recent examples:

• In 2024, workers at the Volkswagen (VW) Chattanooga plant voted to join the United Auto Workers. Like many European corporations, the German-based VW has an established policy of maintaining neutrality in union election processes, although workers still voiced concerns that in its U.S. facilities, VW management tried to intimidate and dissuade workers from forming a union (Bomey 2024).
• In tandem with community benefits agreement negotiations with New Flyer in Anniston, Alabama, the United Steel Workers and Communications Workers of America negotiated three neutrality agreements with New Flyer and its subsidiaries in 2022. Over the two years that followed, these union neutrality agreements enabled workers to pursue five successful union drives, including at the New Flyer facility in Alabama (Last 2025; Sasha 2024).

Successful recent instances of union organizing in Southern manufacturing facilities have been powerful enough to generate their own backlash. Because of the threat that union neutrality agreements represent to the reigning Southern economic development model, several conservative state legislatures in the South have used model legislation developed by the American Legislative Exchange Council to pass laws intended to interfere with these agreements (Sachs 2024). While the legality of such measures remains in question and has not yet been tested, Alabama, Tennessee, and Georgia now all have legislation in place stating that employers who agree to a union neutrality agreement will be barred from receiving state economic development funds, disincentivizing companies from participating in these agreements (Stephenson 2024).

Importance of unionization to improve manufacturing jobs and wages

Securing unionization in Southern manufacturing can have significant wage benefits for workers. Unionized manufacturing jobs are more likely to provide family-sustaining wages. Unionization in manufacturing is associated with a 17.9% wage premium for workers (Scott et al. 2022). This means that compared with similar workers in terms of education, occupation, experience, race, and ethnicity, unionized manufacturing workers are paid almost a fifth more per hour than their nonunionized counterparts.

Table 1 translates this union premium into how much more unionized workers in the South could make on an hourly, annual, and plant-wide basis. The average nonunionized manufacturing worker in the South earns $34.50 an hour, so with the typical union premium, that worker would be earning an additional $6.18 an hour. If that worker works full time, year-round, the hourly premium translates to $12,846 more a year. To illustrate the potential impact of unionization in an entire plant, we take the example of the BlueOval auto manufacturing investment in Tennessee, which is projected to create 6,000 jobs (TN Office of Governor 2023). For a plant of that size, unionization could mean more than $77 million in additional wages for workers.

Table 1

Wage gains from successful unionization are not hypothetical for manufacturing workers in the South. For example, in 2024, workers at New Flyer in Anniston, Alabama, ratified a union contract with significant pay raises, with some workers gaining raises of up to 38% through 2026 (CWA 2024). Establishing a union contract with transparent pay ladders will also help New Flyer workers combat persistent pay gaps between white and Black workers in Anniston’s manufacturing industry (Erickson 2021).

The benefits of unionization go far beyond hourly wage increases. The workers at New Flyer also achieved significant gains in terms of vacation time and retirement contributions. Unionized workers secure critical benefits like health care and sick days at greater rates than their nonunion peers. Adjusting for differences in industry, sector, and region, union workers are 18.3% more likely to have employer-covered health insurance than their nonunion counterparts (EPI 2021). Almost 9 in 10 private-sector union workers have paid sick days, compared with less than three-fourths of nonunion private-sector workers (EPI 2021).

Unions also contribute to safer and healthier working conditions across a wide range of industries (Dean, McCallum, and Venkataramani 2022). By strengthening workers’ voice on the job, unions empower workers to report safety issues and demand better protocols. One example of this is that unionized construction sites experience significantly lower rates of Occupational Safety and Health Administration (OSHA) violations than nonunionized sites (Manzo IV, Jekot, and Bruno 2021). This is despite the fact that unionized workplaces actually experience greater rates of OSHA inspections than other workplaces, likely because many unions maintain active health and safety committees and because unionized workers have greater access to education on how to recognize safety hazards and are less afraid of reprisals from their employer for reporting them (Leigh and Chakalov 2021).

As the New Flyer agreement demonstrates, a strong CBA includes (or is negotiated in tandem with) union neutrality commitments ensuring that workers have a free and fair choice to unionize, without employer interference or retaliation. Securing a pathway to unionization can provide direct benefits to workers at a particular facility, while also increasing local organizing capacity and coalition strength for future negotiations over new projects and local development decisions. Not only is a new union a legally recognized institution that can monitor and hold the company accountable for commitments in the CBA, but it can also play a critical role in amplifying demands of workers and communities outside of the workplace and building power for working people more broadly.

Living wage floor

CBAs can also include commitments to minimum wage floors for the workers who will operate a new facility. For example, the 2018 Nashville Soccer CBA in Tennessee included a commitment to an hourly wage of at least $15.50 for stadium workers (SUN 2018). This provision set the stadium’s wage floor well above the minimum wage in Nashville, where workers—like all Tennessee workers and many across the South—are otherwise subject to the federal minimum wage of $7.25 an hour.

If a wage floor set by a CBA is high enough, it can help workers achieve a living wage in the place that they live. What constitutes a living wage must be determined by labor and community partners (Gould, Mokhiber, and DeCourcy 2024). For example, a living wage could be defined narrowly as covering the necessities for a single adult, or more broadly as including the needs of a working parent and their children. A living wage target must also make assumptions about nonwage income such as health care benefits and government transfers. Manufacturing workers in the South can also rightfully seek wages that not only cover bare necessities but provide the family-sustaining resources needed to be healthy and thrive.

Figure D shows the share of manufacturing workers in the South earning less than $30 an hour, or $62,400 a year in wages for a full-time worker. More than 3 in 5 (60.8%) manufacturing workers in the region earn less than $30 an hour. Around 80% of Southern Black and Hispanic manufacturing workers earn below the $30 threshold. Women in manufacturing are also more likely to earn below $30 an hour (71.8%) than men (59.1%).

Figure D

A $30 wage floor exceeds the minimum costs for a single adult in most jurisdictions in the U.S., but still barely covers needs for many families with children in manufacturing-dense counties nationwide. EPI’s Family Budget Calculator estimates living wage standards by county that cover modest but necessary costs families face like food, rent, and transportation in the United States. Table 2 shows three Southern counties with significant clean energy manufacturing investments in recent years (CET 2025). Each county has significant manufacturing employment, exceeding the U.S. average for manufacturing employment density. For each county, living wage standards from the Family Budget Calculator are listed for different family types. In Morgan County, Georgia, and Maury County, Tennessee, a single adult with a child must earn at least $30 an hour to cover basic needs. For a single economic provider to cover the costs of a four-person family, they must earn over $35 an hour in all the counties listed. These living wage standards indicate that a $30 wage floor would provide significant economic security for workers with smaller families or multiple wage-earners.

Table 2

A CBA that secures a strong living wage standard in a manufacturing facility can create a virtuous cycle that brings about greater prosperity in the area. Higher wages for low- and middle-income workers boost spending in the local economy because these workers spend a greater share of their paycheck than high-income workers (Anderson 2014). Other employers in the area might have to raise their wages to compete for workers with the CBA-bound employer. The establishment of a living wage also demonstrates to other workers in the area that higher wages are a feasible goal through collective action.

Local and/or targeted hire policies

Local and targeted hiring refers to policies that prioritize recruitment of individuals from the local community, or workers from specific groups who are otherwise underrepresented in a given workforce relative to local population demographics, such as women, people of color, veterans, low-income workers, formerly incarcerated workers, or workers with disabilities (Lawliss, Finfer, and Sherer 2022). A local hire policy can require that a certain percentage of hours worked on a project be completed by local workers. These policies can also require giving local workers the first option to apply for jobs on a project. For the prosperity created through manufacturing investments in the South to be shared equitably, it is important that local community members have access to the jobs that are created during both the construction and operation phases of a development. Workforce policies also should be designed to remove barriers to employment for groups of workers—especially workers of color and women—who have historically been excluded from many construction and manufacturing career opportunities. Increasing access to these well-paying jobs can increase economic mobility for workers with more limited opportunities.

Despite these benefits, some state policymakers have been hostile to local hire as a public policy. In 2015, Nashville voters passed a ballot initiative that required city-funded construction projects to dedicate 40% of construction hours to Nashville residents, with 25% of those hours going to low-income Nashville residents (Blair et al. 2020). The Tennessee state legislature then quickly passed a bill that preempted the city from creating its own local hire policy.

As Figure E shows, the harm of Tennessee’s preemption of local hire falls disproportionately on workers of color. The construction workforce in the Nashville metro area has a higher share of workers of color and immigrant workers compared with the state construction workforce overall. Black workers are 8.2% of the construction workforce in Davidson County, but 5.5% of the overall state workforce. More than half (51.5%) of construction workers in Davidson County are Hispanic, compared with less than a quarter (20.1%) of the state overall. Davidson County construction workers are also more than twice as likely to be immigrants (40.2%) than in all of Tennessee (14.8%). State preemption of local hire prevented Nashville from ensuring that public spending would benefit local workers. However, private agreements like CBAs offer an opportunity to incorporate local hire and/or targeted hire requirements into publicly subsidized developments, even in heavily preempted jurisdictions.

Figure E

In 2018, three years after the preemption of Nashville’s local hire policy, the labor-community coalition Stand Up Nashville was able to leverage $275 million in public subsidies for a new professional soccer stadium into a successful CBA (SUN 2018). The Nashville Soccer CBA included commitments to local hire for stadium workers, particularly workers from “Promise Zones,” i.e., high-poverty areas with fewer economic opportunities (SUN 2020). Through the CBA, Nashville Soccer Holding, LLC agreed to consider qualified Promise Zone resident referrals for jobs at the stadium. So far, the program has succeeded in hiring Promise Zone residents. In 2023, Nashville Soccer Club had hired 180 employees, 80 of whom were residents of Promise Zones (SUN 2023).

CBAs in the South and throughout the country are securing similar commitments to local and targeted hiring in clean energy and manufacturing investments. In Alabama, the New Flyer CBA commits the company to ensuring that at least 45% of new hires and 20% of promotions are members of “Historically Disadvantaged Groups” (Sabin 2022).4 In Massachusetts, a new offshore wind terminal entered into a CBA with the City of Salem—setting targets for hiring of local workers, workers of color, and women workers (Sabin 2024). The CBA for Maine Aqua Ventis, an offshore wind facility, includes local hiring opportunities for residents of Monhegan, Maine (Sabin 2017). 

These types of agreements help ensure that local residents benefit from large investments in their communities, particularly when policymakers have invested public dollars in the form of tax breaks or corporate subsidies to support a new facility. Ensuring local workers are prioritized in training programs and hiring processes for newly created jobs also helps community members stay in the area when housing costs are driven up by a large new manufacturing investment. And in the longer term, providing pathways for local workers to benefit directly from these investments strengthens the labor and community alliances needed to hold developers and corporations accountable over time.

Equitable workforce development through apprenticeships and pre-apprenticeships

In addition to local hire policies, which help create equitable pathways for local workers to secure good jobs at a manufacturing site, construction and manufacturing projects require a skilled workforce to operate safely and productively. A robust ecosystem of registered apprenticeship and pre-apprenticeship programs can help ensure both that employers find the skilled workers they need in a large new manufacturing facility, and that local workers can access pathways to newly created jobs.

Registered apprenticeship programs are training programs vetted by federal or state agencies to ensure use of high-quality, best-practice training standards and approved curriculum aligned with skills needed to succeed in a particular occupation. Registered apprenticeships combine paid on-the-job and classroom training and result in a recognized, portable credential certifying that a worker has the skills and experience necessary for a specific occupation. Pre-apprenticeship programs (also known as apprenticeship readiness programs) recruit and prepare participants for registered apprenticeships—often partnering with community organizations—to open pathways to apprenticeship for women, Black and brown youth, immigrants, workers with disabilities, or others historically excluded from skilled trades occupations. The best practice is for these apprenticeships and pre-apprenticeships to be joint programs between unions and employers, providing high-quality instruction tailored to industry needs and training that leads to placement in a high-quality job with wages, conditions, and benefits negotiated into a union contract. Often, a vital building block for successful manufacturing apprenticeship programs is the establishment of a unionized workforce at a facility.

Unlike lower-quality workforce development programs, registered apprenticeships pay workers fairly for their labor during their training—and in joint apprenticeship programs, the wages and benefits of apprentices are negotiated into a union contract and typically include scheduled increases as apprentices progress through the training program. Registered apprentices (across joint and non-joint programs) typically see their earnings increase 49% between the year before they enter the program and the year after completing it (Walton, Gardiner, and Barnow 2022). These increases in earnings are greater than for similar workers who do not enter the apprenticeship during the same time period (Katz et al. 2022). Apprenticeships can also be particularly attractive to workers because they are debt-free. Most apprentices (60%) consider debt avoidance the most important reason for choosing to enroll in an apprenticeship (Walton, Gardiner, and Barnow 2022).

Apprenticeships can be a powerful tool for increasing the diversity of construction and other industry workforces. While participation of women and workers of color in apprenticeships has grown in recent years, this growth has been painfully slow for decades (CEA 2024). Research finds that union-based (joint) apprenticeship programs have been more successful than other types of apprenticeships at increasing diversity in the construction industry (Ormiston and Bilginsoy 2024). Joint apprenticeships enroll a higher share of women, Black workers, and Hispanic workers than non-joint programs, and have higher program completion rates for all workers, including for women and workers of color. Community benefits agreements can secure commitments and partnerships that equitably grow this pipeline of workers and set enforceable local and targeted hiring goals which in turn spur diversification of construction and manufacturing apprenticeship programs.

For instance, the New Flyer CBA creates a partnership between the company and coalition partners to develop pre-apprenticeship and technical training programs that expand access to manufacturing jobs for workers with low incomes and from disadvantaged groups (Sabin 2022). For these programs to succeed, community groups and educational institutions must have an active role in shaping the programs and connecting workers to these opportunities. The development of a growing skilled workforce and a robust, high-quality workforce development ecosystem can in turn be a strong incentive for bringing more facilities to an area over time. In 2015, Polaris stated that a significant factor in its decision to choose Huntsville, Alabama, for a new production facility was the area’s skilled workforce (Polaris 2015). As more workers participate in high-quality training programs that lead to union jobs, the organized workforce of the region will grow, strengthening labor-community coalitions the next time there is an opportunity to shape new development in the region.

Child care

Child care is an essential but extremely costly expense for many working families across the South. Average annual infant care costs in the South range from $6,868 in Mississippi to $14,277 in Virginia.5 The Department of Health and Human Services recommends that 7% or less of family income go toward infant child care costs, but typical Southern families spend significantly more. In Alabama, infant care costs are 9.8% of median family income, while in Oklahoma the share is 15.4% (EPI 2025b).

Increasing access to high-quality, affordable child care not only makes work more accessible to parents (and especially to women, who on average continue to assume disproportionate care responsibilities), but is a powerful investment in children’s development that can help narrow class and racial inequalities (Morrisey 2020). In addition, child care workers tend to work for very low wages and experience poverty at greater rates than the typical worker.

A large manufacturing investment in a locality might produce a significant number of jobs, and in turn increase the demand of workers and their families to live nearby. This is likely to increase the need for child care services in the region. However, data show that child care employment has not kept up with manufacturing growth in Southern counties. Table 3 compares counties with high manufacturing density, where manufacturing employment makes up more than the national average (9% in 2009), with those with lower manufacturing employment density (EPI 2025c).

Table 3

Between 2009 and 2024, manufacturing employment in high-manufacturing-density counties in the South grew 15.9%, achieving faster growth than similar counties in the U.S. overall (12.1%). However, over the same period, child care employment only grew 4.5% in Southern high-manufacturing-density counties, far below the national rate of 14.2%. Child care employment growth in the South for low-manufacturing-density counties (22.3%) is also below the national level (28.5%). The South systematically underinvests in child care, despite its importance to a healthy economy in the region.

CBAs and PLAs have been used to secure both the construction of physical child care spaces and financial support for actual services. The Nashville Soccer CBA reserved 4,000 square feet for the development of a child care center (SUN 2020). In 2001, the CBA for the North Hollywood Commons mixed-use development project in Southern California secured a commitment to an on-site child care center. Fifty child care spaces at the center were reserved for low- and moderate-income families (Sabin 2001). In the Boston area, unions have secured Project Labor Agreements that seek to address the unique child care needs of the construction industry. The PLA for the Winthrop Center in Boston established a child care access fund to research, develop, and implement alternative child care models within the construction industry, with a particular focus on assisting single mothers with child care while supporting their career (NEREJ 2019).

These types of investments are vital supports for working families, particularly mothers, seeking to balance professional and care work. Combined with union neutrality for the child care workers at these facilities, commitments to providing child care can further elevate worker power in the region and help large new facilities recruit and retain the skilled, experienced workforces they need to succeed.

Affordable housing

Without strategies to address the housing needs of a community impacted by a new manufacturing investment, local residents can experience increased economic precarity or forced displacement. The local housing impacts of a large industrial investment can be complex. A significant manufacturing investment can make a local community more attractive as workers move into the area to be close to their place of work. Manufacturing investments are also likely to be paired with prospective real estate investments in anticipation of future development around the original project. State and local governments might use eminent domain and other purchasing mechanisms to secure land for roads and other new infrastructure. These dynamics can increase housing costs for residents, particularly renters who are most vulnerable to the impacts of housing speculation and prospective rent increases. For instance, the BlueOval development in West Tennessee is already reported to have increased property prices and housing rents (TCG 2023). Homeowners, particularly those with fixed incomes, can also be more burdened with housing costs as higher demand in the area increases property tax valuations (Payne 2019).

On the other hand, extreme proximity to an industrial site can expose residents to environmental hazards and noise pollution, and may be considered unsightly, which decreases property values (Currie et al. 2016; Upton and Talpur 2024). The exact distribution of these changes in demand for housing across a community will depend on the type of industry and any other types of development included in the project.

Industrial investments like manufacturing facilities tend to take place in rural and semirural areas, in part because land is relatively inexpensive (Wiley 2015). While the counties with a higher share of manufacturing employment tend to have lower housing costs than urban areas, housing affordability remains a significant issue for workers. On average, across high-manufacturing-density counties in the South, a two-adult, two-child household must cover more than $14,000 a year in housing costs.6 A large share of renters in high-manufacturing-density counties in the South still are cost-burdened by housing, meaning they spend more than 30% of their income on rent, utilities, and other housing costs. As shown in Figure F, across the Southern states, the share of cost-burdened households in high-manufacturing-density counties ranges from 28% in Arkansas to 47% in Florida. More than 2 in 5 (42%) of Texas renters in these counties are also housing cost-burdened.

Figure F

A strong CBA will secure commitments to build a certain number of affordable housing units or dedicate a share of housing at the site as affordable. The Nashville Stadium CBA created agreements that at least 12% of residential units in the development would be affordable and that 20% of those units would be three-bedroom units to accommodate families (SUN 2020). The Staples Center CBA in Los Angeles, California, was another successful example of strong affordable housing benefits. The 2001 agreement for the development of an expanded convention center, theater, and surrounding housing, hotel, and retail space secured commitments that 20% of housing units would be affordable. The developer also agreed to provide $650,000 in interest-free loans to nonprofit affordable housing developers in the local community (WRI 2001).

Even in situations where a labor-community coalition is unable to reach a final CBA with a company, coalition organizing around community demands can still deliver meaningful affordable housing victories. Between 2002 and 2006, a labor-community coalition in Denver pressured Cherokee Investment Partners to provide community benefits as part of their redevelopment of the site of the Gates Rubber Company. The coalition leveraged zoning changes necessary for the project and a potential subsidy package from the city to extract benefits including an affordable housing plan for hundreds of rental and for-sale affordable housing units (Ingram and Hong 2011; PowerSwitch Action 2025).

In 2005, the labor-community coalition organized by Georgia STAND-UP was able to attach community benefits to an Atlanta city ordinance allocating $2 billion in public funding for the Atlanta Beltline transit-oriented development project. The city resolution shaped by the coalition established an affordable housing trust fund and a goal of developing 5,600 affordable housing units (PowerSwitch Action 2025). As of 2024, more than 4,100 affordable units have been created as part of the project (Atlanta Beltline, Inc. 2024).

Labor-community coalitions can also pursue other land-use commitments beyond the development of affordable housing. The BlueOval Good Neighbors coalition in West Tennessee has demanded commitments to protect land for farmers in the area. The development of the Ford factory has pushed Tennessee’s Department of Transportation to pursue land for new roadways through purchase and eminent domain. The area targeted for new roadways is a majority Black farming community, and several farmers are engaged in lawsuits with the state over the state’s meager compensation offers for their land (Wadhwani 2023). The coalition has demanded that farmers be offered replacement land in exchange for their sold land, as well as the creation of a 10,000-acre community land trust (BlueOval Good Neighbors n.d.).

Creating or protecting affordable housing is essential for protecting the communities that are necessary for any effective labor-community coalition. Large developments can cause instability within the community as new residents arrive, and existing residents are buffeted by rising housing costs. Because of historic and ongoing racial discrimination in housing policy, labor policy, and real estate practices, the costs of these changes are most likely to impact Black and Hispanic workers. Black families and other workers of color are the most likely to be cost-burdened by housing (JCHS 2024). Creating housing for workers and families to remain in the area is vital for continued collective action to secure benefits from developers and hold those developers accountable for their promises.

Environmental standards, funding, and monitoring

Large-scale manufacturing projects often have significant environmental impacts, both during construction and once they are in operation. Air, noise, and groundwater pollution; harm to wildlife habitats; and residents’ exposure to toxic byproducts are just a few examples of common concerns, and these consequences can be severe when projects are approved without sufficient environmental consideration. The consequences of large manufacturing projects often disproportionately harm communities of color and low-wealth areas throughout the South (Brouk 2024). For decades, poor and Black residents in the region have been exposed to toxic chemicals, pollution, and other environmental dangers at alarming rates (Bergman 2019).

In 2021, the Tennessee governor approved the construction of a General Motors lithium battery supplier in the city of Spring Hill, on the banks of the Duck River. Though the project was seen as an economic success, the plant’s operation has taken a toll on the fragile river ecosystem. The lithium battery factory is not the only strain—just eight companies along the river drain tens of millions of gallons of water daily (Wadhwani 2024). This enormous water usage has lowered river water levels, threatened biodiversity, and harmed local tourism and recreation. Advocates for the river’s health blame the state’s prioritization of manufacturing expansion without regard to the long-term environmental or economic consequences for local residents or other existing local industries.

CBAs are a tool that may help community-labor coalitions address the environmental impacts of data centers in the South. Data centers are booming across the United States, but particularly in Southern states like Georgia, Texas, and Virginia (Walker and Goldsmith 2026). New centers are heavy users of water and energy, create noise and air pollution, and are driving up electricity costs nationwide both by increasing demand for energy and requiring utilities to invest in new infrastructure paid for by all ratepayers (Merchant and Guerra 2025; Bizo et al. 2021; AI NOW 2025; Reed 2025). For example, in Virginia, electric bills were on track to increase as much as 25% in 2025 because of data centers (Penn and Weise 2025).

Growing community concerns surrounding data centers could create leverage for labor-community coalitions to pursue CBAs and other community benefits strategies. In 2025, community opposition blocked or delayed $64 billion in data center projects across the nation (Data Center Watch 2025). As community resistance to data centers continues to grow, more developers may recognize the need to come to the table with local coalitions to negotiate binding commitments on environmental and economic outcomes to secure project approvals. A handful of localities have begun to create agreements with data center developers regulating water use and securing commitments to green energy use (Turner Lee and West 2026).

Past development projects provide examples of how communities have used CBAs to secure long-term commitments to clean energy transition and protection of local natural resources in a multitude of ways, from mandating that any new construction must meet specific sustainability standards to requiring companies to contribute a set dollar amount to a city’s renewable energy transition fund. In Virginia, the City of Richmond Resort Casino CBA ensured the developing and operating company would design and construct all project buildings to Leadership in Energy and Environmental Design (LEED) Silver standards and would use previously existing pavement where possible (WRI 2021). The agreement also required the developer to attempt to reduce the urban heat island effect by planting shade trees along sidewalks and using other landscaping methods (WRI 2021). These agreements can mitigate additional environmental harm in areas that have already been polluted. A CBA between the Town of Waterloo, New York, and Seneca Meadows, Inc. regarding a landfill expansion commits the waste management company to pay for the development of new public water lines and other potable water infrastructure if existing public water wells become contaminated (WRI 2005).

CBAs can also be used to expand the positive impact of an already climate-friendly project. In New York, a CBA with an offshore windfarm developer stipulates that the company must contribute $2 million to the town of East Hampton’s Ocean Industries Sustainability Program (WRI 2018). Additionally, Deepwater Wind South Fork, LLC must spend $200,000 to establish an Energy Sustainability and Resilience Fund to support East Hampton’s transition to 100% renewable energy (WRI 2018). CBAs with environmentally focused companies provide valuable opportunities for communities looking to address climate change, especially where state governments have failed to invest in environmental programs.

A CBA can achieve a variety of climate and environmental commitments from a company but is also a strong starting point for building local capacity to monitor resource use, pollution, and other environmental priorities. A strong coalition of community, labor, and environmental groups can play essential roles in implementing and enforcing CBA commitments in contexts where understaffed government agencies have limited ability to monitor or investigate pollution and other environmental harms. Instead, workers and community members are often the first to report harmful practices and safety concerns. A strong CBA can provide opportunities for labor and environmental groups to work together to monitor and protect worker and community health, natural resources, and ecosystems.

Conclusion

For decades, Southern economic policies shaped by dominant business and corporate interests have resulted in poor working conditions and failed to ensure that profits generated by publicly subsidized development are shared with local workers and communities. Confronting the deep, long-standing imbalances of power that have entrenched this failed economic development model will require significant organizing and coalition-building to increase the collective power of workers and community members to shape different outcomes from the latest Southern manufacturing boom. Building new forms of worker and community power will be equally necessary to counter escalating authoritarian actions of the Trump administration, which closely parallel many features of the failed Southern economic development model that by design prioritizes corporations over workers and communities.

Our analysis shows that community benefits agreements could be powerful tools for Southern labor and community groups building the shared power necessary to reshape local and eventually regional economies. When strong coalitions of labor, environmental, faith-based, and other grassroots community organizations are able to build the necessary power to bring a company or developer to the table to negotiate an enforceable agreement, such coalitions can secure measurable economic benefits like higher wages, respect for workers’ rights to unionize, local or targeted hiring, protection of natural resources, or more affordable housing. Such economic gains are beneficial in themselves, but they also raise expectations, build local capacity to pursue additional gains, and demonstrate to the community at large that local residents can shape their own economic futures, and that these types of victories are achievable in the face of the Southern status quo.

While the urgent project of upending the Southern economic development model will require vigorous and persistent organizing across many sectors and geographies, community benefits agreements are one key strategy for turning manufacturing jobs into good jobs, ensuring long-term local economic gains from new industrial investments, and even renewing democracy in contexts where it has long been suppressed. Forming strong, long-lasting labor-community coalitions is essential to winning concrete gains for local workers as well as reshaping the political fabric of Southern communities and increasing working people’s influence over broader state or regional economic policy decisions. Winning and implementing any strong CBA requires the formation of an empowered labor-community coalition, which ideally endures and gains greater strength, experience, and influence over time. Just as the economic benefits of unionization extend far beyond an individual workplace, establishing a strong CBA coalition can create broader positive impacts across a community or region—delivering higher-quality jobs; more equitable tax systems; stronger public services; and healthier, more inclusive political systems.

Acknowledgements

The authors wish to thank the AFL-CIO Center for Transformational Organizing for their partnership and invaluable contributions in the production of this report. The authors are also grateful to Athena Last and Ian Elder at Jobs to Move America and Ben Beach at PowerSwitch Action for their expert feedback.

Appendix

Appendix Table 1

Notes

1. Clean energy manufacturing includes manufacturing of batteries, electric vehicles, mineral products, solar energy products, and wind energy products.

2. Workers in Southern states experience lower wages than in other regions even after adjusting for cost-of-living differences (Childers 2023).

3. The facilities covered by these agreements included plants in Alabama, California, Kentucky, Minnesota, New York, and Wisconsin.

4. This category includes workers who are Black, Indigenous, and/or people of color; women; LGBTQ+ persons; systems-impacted people (formerly incarcerated people); persons emancipated from the foster care system; residents of Anniston, Alabama, lacking GED or high school diploma; and veterans.

5. Southern states excluding D.C., Delaware, and Maryland.

6. EPI analysis of Family Budget Calculator and Quarterly Census of Employment and Wages data.

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Access to paid sick leave is increasing in some areas

On a national level, we’ve seen positive trends in access to paid sick days from 63% of private-sector workers in 2012 to a record high of 80% in 2025, according to the latest data from the Bureau of Labor Statistics. These advances are driven by the fact that state and local governments enacted laws to enable workers to earn paid sick leave. In 2024, ballot measures were passed in Alaska and Nebraska. Alaska’s leave policy took effect on July 1, while Nebraska’s took effect just last week (albeit weaker than originally passed). Unfortunately, a paid sick leave measure that Missouri voters overwhelmingly approved by ballot was rolled back by the legislature and is no longer in effect.

Currently 18 states (including Washington, D.C.), 17 cities, and 4 counties have some form of paid sick leave requirements. Given that the existence of state laws varies, it’s no surprise that there are significant differences in access to paid sick time across the country, as shown in Figure A. The share of workers with access to paid sick days ranges from only 63% in the East South Central states (Alabama, Mississippi, Kentucky, and Tennessee) and 71% in the West South Central (Arkansas, Louisiana, Oklahoma, and Texas) up to 98% in the Pacific states (California, Oregon, Washington, Hawaii, and Alaska). The fact that the nearly 30 million workers in the Pacific states have essentially universal access to at least some form of paid sick days highlights that this key labor standard is purely a policy choice—and one that state and local governments can enforce on their own.

Figure A

Notably, many state governments in the East South Central and West South Central Census divisions have passed preemption laws prohibiting local municipalities from passing paid sick leave policies. So not only have legislative majorities failed to enact paid sick leave at the state level, but these states have also blocked cities and counties from passing legislation to provide paid sick leave for their workers.

Access to paid sick leave is greatest for the most highly paid workers

As with geographic variation, access to paid sick leave remains vastly unequal by wage level. As shown in Figure B, the higher the wage, the greater the access to paid sick leave. Among the 10% of private-sector workers with the highest wages, 96% have access to paid sick days. By contrast, among the 10% of workers with the lowest wages, only 41% have access to paid sick days.

Figure B

The unequal access to paid sick days is particularly troubling since low-wage workers are least able to absorb lost wages when they or their family members are sick. Workers may have trouble paying for housing, food, health care, and other necessities (see Table 1 of this report). This unequal access is why state laws are so important: Most of the gains from state and local paid sick provision benefited the lowest-wage workers. Access for the bottom 10% of wage earners increased from 19% in 2012 to 41% in 2025.

There is also huge variation in access to paid sick days within the private sector for workers by work hours and union status. Full-time workers are much more likely to have paid sick days than part-time workers (88% versus 56%). Unionized workers have greater access to paid sick days than nonunion workers (86% versus 80%).

Fortunately, there is a relatively simple way to address some of these inequities: The federal government can pass legislation to mandate paid sick leave for all workers. In the absence of federal action, state governments can move on their own and mandate that employers provide this key labor standard. Paid sick leave not only helps reduce the transmission of disease, it also provides economic security for workers who might otherwise lose income if they have to take time off from work. 

The human and economic costs of extreme heat

Heat is the leading cause of death among all weather-related fatalities, killing 177 people last year alone and at least 211 workers between 2017 and 2022. We know that existing data on heat-related workplace fatalities significantly understate their true incidence and that, as climate change leads to more frequent and intense heat waves, these numbers will only rise. Despite this, 43 states and D.C. have yet to take action to prevent heat deaths. With federal rulemaking now in limbo, it is more imperative than ever for states to act quickly to protect workers from the growing danger of heat exposure.

Like workplace deaths and injuries in general—and due to occupational segregation and geographical factors—the ­­impacts of extreme heat are distributed unevenly based on income, race/ethnicity, and immigration status. The lowest-paid 20% of workers suffer five times as many heat-related injuries as the highest-paid 20%. And Black, Hispanic, and immigrant workers face higher exposure to extreme heat because they are more likely to work in high-risk industries like construction and agriculture.

While workplace deaths are the most urgent consequence of extreme heat, heat is also responsible for thousands of illnesses and injuries every year that result in unexpected health care costs, missed workdays, lost wages, and productivity declines that cost both workers and their employers. Overall economic costs are staggering: Short-term heat-induced lost labor productivity costs the U.S. approximately $100 billion annually and these costs will only increase as climate change worsens. Without emissions reductions or sufficient heat adaptations, labor productivity losses may double to nearly $200 billion by 2030 and reach $500 billion by 2050.

If no action is taken to mitigate the growing risks of extreme heat exposure, the hottest states will suffer the gravest economic consequences. Researchers at the Union of Concerned Scientists estimated annual earnings at risk for workers in each state across seven of the most heat exposed occupations.1 Southern states make up nine of the 10 states where workers stand to lose the highest average annual earnings (see Figure A). Texas will be one of the hardest hit; it’s projected to lose a cumulative $110 billion in labor productivity by 2050.

Despite these economic risks, some Southern states are standing in the way of protecting their own workers and businesses. Texas and Florida—which accounted for almost half of all heat-related severe injuries in the construction industry between 2015 and 2023—have failed to adopt statewide heat standards and banned cities and counties from passing local heat standards.

Figure A

Even though the economic harms of heat-related injuries, illnesses, and deaths are well documented, new heat standard proposals regularly face significant opposition from industry interests who claim, with little evidence, that protections will be too costly to implement. While exaggerated claims and fearmongering are consistent with a long history of industry resistance each time OSHA has proposed new standards, suggestions that a heat standard would disrupt business aren’t backed by available evidence. In its own regulatory impact analysis of the proposed heat standard, federal OSHA estimated that savings to employers are projected to outweigh any implementation costs by $1.4 billion each year.

Existing models provide roadmap for states to adopt or strengthen their own heat standards

Years of research and experience have produced clear guidelines for evidence-based, effective standards that states can now adopt quickly and with confidence. The strength and effectiveness of existing heat standards varies across states with respect to which workers are covered and what steps employers must take to prevent extreme heat exposure. All state heat standards (except for Nevada’s) set a temperature threshold above which employers are required to provide workers with water and shade. Most states also set a high-heat threshold above which additional precautions must be taken to protect workers. Many states also mandate an acclimatization period for workers to adjust to working in high temperatures, but the length of that period varies across states. All states with heat standards mandate that employers train workers on heat illness prevention, monitor workers for signs of heat illness, and have a plan to respond to heat illness emergencies.

A strong state standard should, at a minimum:

• Cover all indoor and outdoor workers;
• Include temperature thresholds to mandate precautions like water, rest, and shade;
• Guarantee an acclimatization period;
• Designate a high-heat temperature threshold at which additional precautions apply; and
• Impose no new costs on workers, meaning that workers should be paid for rest breaks and time spent acclimatizing.

Seven states have already implemented heat standards: California, Colorado, Maryland, Minnesota, Nevada, Oregon, and Washington. While California, Washington, and Minnesota were early adopters of heat standards, advocates have built tremendous momentum toward the adoption of new standards in additional states in the past two years. In 2024, Colorado, Maryland, and Nevada all passed new heat standard laws and California expanded its existing heat standard (originally covering only outdoor work) to cover indoor workers. This year, 18 state legislatures proposed new heat standards, including bills in states like Illinois and New Jersey, that outline elements of comprehensive, evidence-based standards that other states can use as models. 

States with existing standards should review checklists for a strong heat standard as well as model legislation in states like Illinois and New Jersey to audit their regulations and strengthen them if needed. States without standards should build comprehensive, effective standards that follow these evidence-based recommendations, cover as many workers as possible, and include clear, enforceable measures.

States should act now to limit harms to workers, businesses, and state economies while federal rulemaking is in limbo

The fate of the proposed federal heat standard now under consideration could eventually reshape the heat standard policymaking landscape, but in the meantime, there is no downside to states taking action. The current proposed federal standard is fairly strong, a testament to years of research, advocacy, and community mobilization. However, given the Trump administration’s hostility toward workers and industry lobbying groups’ strong opposition to the proposed standard, possible outcomes include the adoption of a weakened standard or long delays in formalizing the proposed rule to effectively block its implementation. 

Some industry representatives opposed to the current proposed federal standard have indicated that, instead of continuing to block the federal rule, they may support the passage of a weak standard in order to stave off future rulemaking. Some have speculated that industry interests may support modeling a weak federal standard on Nevada’s months-old, untested state standard, which has no temperature threshold and has been characterized as “almost as bad as no heat standard” by worker advocates.

There are three possible outcomes of the federal heat standard rulemaking process: 

1. The Trump administration finalizes the proposed, strong federal heat standard. If a strong rule is formalized, states should (and must) adopt it. A strong federal rule protecting all workers from the effects of extreme heat is the best-case scenario. Under this scenario, states where employers and workers have already gained experience with strong state heat standards will be better prepared to implement the federal rule.
2. The Trump administration abandons/indefinitely delays action on the current proposed federal heat standard. If no federal rule is implemented, states will retain latitude to continue enacting their own heat standards. Under this scenario, states with strong, effective standards will help workers and employers immediately reap important safety and economic gains as climate change continues to increase risks of human and economic damage from extreme heat.
3. The Trump administration finalizes a weakened version of the federal proposal. In this scenario, states under federal OSHA jurisdiction would be required to follow the new federal standard and states with OSHA “state plans” could continue to enact/enforce stronger heat standards. It is also likely that any new federal standard could face legal challenge (delaying its implementation), so having a strong track record of effective state standards in place would remain critical for building additional legal and political pressure to eventually enact a stronger federal standard. Likewise, given likely legal delays, even under this scenario, states under federal OSHA’s jurisdiction would be able to continue to enforce their own standards until any new federal rule were upheld in court and any stronger state law had been blocked by a federal court order.

In short, states have every reason to enact strong, effective heat standards and no reason to wait on uncertain federal action. There is zero risk for states who act now and great dangers associated with waiting while workers and businesses alike continue to suffer.

Amid federal backsliding, state lawmakers can act to protect workers from deadly heat

Over 144 lives have already been lost to heat-related hazards since federal rulemaking began four years ago to establish a long-overdue federal OSHA heat standard. Given the possibility that the Trump administration could block or delay the proposed federal standard—or worse, weaken it to try to preempt more effective state and local standards—state lawmakers should move quickly to implement strong heat standards of their own, prevent more deaths and illnesses, and bolster their state’s economy against the damaging effects of extreme heat.

1. The research was conducted in 2021. Given the limited number of occupations considered in these wage loss estimates, recent federal reversals of major policies intended to address climate change or accelerate the clean energy transition, and documented increases in global warming since 2021, these estimates are likely extremely conservative.

I am testifying in strong support of SB 170 and SB 171—two bills to repeal Public Act 98 and Public Act 105, respectively. Public Act 98 has prohibited local governments from entering project labor agreements on publicly funded projects since 2011, and Public Act 105 has prohibited local governments from enacting a wide range of important labor standards since 2015.

For several years, EPI has closely tracked the ways in which the spread of abusive forms of “preemption”—state interference in local policymaking—is not only preventing shared prosperity but also deepening economic inequality.1 Preemption in this context refers to situations in which state lawmakers block local ordinances from taking effect—or dismantle existing local ordinances outright. In the past decade, lawmakers in some states have increasingly misused preemption to interfere with local governments’ ability to set job quality standards. Blocking these local policies results in wage suppression for all workers and contributes to maintaining racial and gender pay gaps.

Preemption of local policymaking is embedded in a racist history

The use of preemption laws to block local labor standards is deeply intertwined with a long history of racism. In the 2020 EPI report Preempting Progress, we trace current-day preemption of workers’ rights back to state-sanctioned policies and practices begun in the post-Reconstruction South, which disadvantaged Black and brown workers, as well as women and low-income workers.2 In a 2021 EPI report focused on Midwestern states, we looked further at how the abuse of state preemption is entangled in histories of segregation, redlining, and other policy choices that reinforced anti-Black racism and white supremacy following the Great Migration.3 I begin with this background because the deep inequalities plaguing our economy today remain rooted in this history of racism and worker exploitation.

Today, preemption laws are often passed by majority-white legislatures, erecting barriers to economic security in cities whose residents are majority people of color. State lawmakers who have used preemption to disempower local governments are often bending to pressure from corporate interests and right-wing groups such as the American Legislative Exchange Council (ALEC).4

Preemption of local labor standards suppresses wages and increases economic inequality

Michigan’s legislature in 2015 used preemption to deny local governments the ability to improve job quality by passing Public Act 105, nicknamed the “Death Star Bill” for its complete destruction of localities’ power to enact nearly any policy that could benefit workers —ranging from minimum wage increases to fair scheduling laws, paid leave, and a host of other standards.

The result stripped cities and counties of their ability to address growing inequality and declining worker wages. As recently as 2005, Michigan boasted a relative state median wage that was 7% above the national median. But as Figure A illustrates, Michigan’s wage advantage has since disappeared, and for the past decade Michigan’s relative median wage has remained below the U.S. median.

Figure A

During this same period, state preemption deprived local Michigan communities of policy tools that could have improved the lives of workers and their families.

For example, in our 2021 report, we examined the fair scheduling prohibition included in Michigan’s preemption law to assess preemption’s direct impact on workers. Unfair scheduling practices can take many forms. Some employers use computer algorithms to make last-minute staffing decisions. Others use on-call scheduling, where workers are asked to stay available without pay, but are not told whether they are required to come in until immediately before a shift. Alternatively, workers may be scheduled for full shifts but then sent home early with no notice, depriving them of income while still requiring them to pay for child care, transportation, or other arrangements. Such practices are widespread in retail and food service jobs also characterized by low wages and meager benefits.5

Fair scheduling laws mitigate these practices by ensuring workers receive advance notice of schedules or additional pay when schedules change without notice. Because of the importance of predictable schedules for workers and families, cities from New York to Chicago to San Francisco have adopted fair workweek ordinances.6

But in Michigan, state legislation has denied local governments the opportunity to adopt similar policies that could especially benefit women and workers of color, who are far more likely to hold low-wage jobs subject to erratic schedules.7 For example, if Detroit were able to enact fair workweek legislation, we estimate that 38,702 workers in retail and food service would benefit. As Table 1 shows, the vast majority (29,943 or 77.4%) of those workers are Black. Women would particularly benefit from a fair workweek ordinance focused on retail and food service, where they make up over half the workforce.

Table 1

Empowering local government to set job quality standards is especially critical at a time of unprecedented opportunity for Michigan communities to compete for historic federal investments in infrastructure, clean energy, and manufacturing

Massive federal investments now flowing to state and local governments via scores of programs created by the Bipartisan Infrastructure Law (BIL), the CHIPS and Science Act, and the Inflation Reduction Act (IRA) present huge opportunities to accelerate the transition to clean energy while creating good jobs in communities that need them most.

To maximize the benefits of federally-funded projects, cities, counties, and school boards need immediate access to a full range of implementation tools including local policy options that Michigan state preemption laws currently prohibit. Specific local policy tools like project labor agreements (PLAs), prevailing wage standards, and apprentice utilization thresholds are especially important for shaping job outcomes on public infrastructure and green energy projects.8

PLAs can also serve as the foundation for broader agreements—known as community workforce or community benefits agreements— through which local governments can ensure that major public construction projects target priority community needs. A host of competitive grant programs administered by federal agencies (Departments of Energy, Labor, Transportation, and others) explicitly encourage state and local applicants for funds to use project labor agreements or more expansive community benefits agreements to set minimum standards for all jobs on a project.

To illustrate with just one example, the Department of Energy’s Regional Clean Hydrogen Hub program (created by the Bipartisan Infrastructure Law) designates $7 billion for 6–10 regional projects to advance clean hydrogen production and use. The program requires applicants for these funds to submit a Workforce and Community Agreement Statement describing any plans to negotiate a project labor agreement or community benefits agreement to ensure projects generate high-quality jobs. Proposals including strong plans are scored higher, increasing their chances of drawing down the largest federal funding awards for their communities.9

To take a second—potentially transformative—example: Under the Inflation Reduction Act, cities, counties, and school districts can maximize their access to direct payments from the IRS to recoup the cost of clean energy projects only if the projects pay workers a prevailing wage and utilize a certain percentage of registered apprentices.

Cities like Boston, Chicago, Los Angeles, New York, or Seattle—in states where local governments have not been restricted by preemption—have long experience using these policy tools to maximize high-road economic impacts of major projects. These cities are already exercising their competitive advantage in drawing down new rounds of federal funds via competitive grant programs.10

Given current opportunities for local governments to leverage federal funds toward good jobs, there is no time to waste in empowering Michigan cities, counties, and school districts to attach prevailing wage, PLAs, and apprenticeship requirements to upcoming infrastructure and green energy projects. 

Reversing preemption of local standard-setting is the next essential step in restoring Michigan’s role as leader in good job creation

Workers, advocates, and policymakers across the country have begun to push back on the trend of harmful state preemption after years of observing its economic damage. There was a time when the Midwest was a leader in incubating local laboratories of democracy—including progressive cities, counties, and school districts that enacted innovative policies to support working families. By taking steps today toward passage of SB 170 and 171, Michigan can restore its position as a regional leader on the path back to a high-road economy. Michigan workers need and deserve better jobs and opportunities, and passage of these two bills will restore the critical ability of local governments to enact labor standards necessary to help reverse inequality and build local economies that work for everyone.

Notes

1. The Economic Policy Institute’s Workers’ Rights Preemption in the U.S.: A Map of the Campaign to Suppress Workers’ Rights in the States, last updated in August 2019, tracks state legislation that preempts local action on key worker rights including minimum wage, fair scheduling, project labor agreements, prevailing wage, paid leave, and labor standards in the gig economy.

2. Hunter Blair et al., Preempting Progress: State Interference in Local Policymaking Prevents People of Color, Women, and Low-Income Workers from Making Ends Meet in the South, Economic Policy Institute, September 30, 2020.

3. Julia Wolfe et al., Preempting Progress in the Heartland: State Lawmakers in the Midwest Prevent Shared Prosperity and Racial, Gender, and Immigrant Justice by Interfering in Local Policymaking, Economic Policy Institute, October 14, 2021.

4. Lisa Graves, ALEC, “Model” Legislation, and Preemption, Local Solutions Support Center, March 15, 2023.

5. Daniel Schneider and Kristen Harknett, It’s About Time: How Work Schedule Instability Matters for Workers, Families, and Racial Inequality, The Shift Project at the Institute for Research on Labor and Employment, University of California at Berkeley and University of California at San Francisco, October 2019.

6. HR Dive, “Predictive Scheduling Laws: A Running List of States and Localities That Have Adopted Predictive Scheduling Requirements” (web page), last modified February 13, 2023.

7. Leila Morsy and Richard Rothstein, Parents’ Non-Standard Work Schedules Make Adequate Childrearing Difficult: Reforming Labor Market Practices Can Improve Children’s Cognitive and Behavioral Outcomes, Economic Policy Institute, August 6, 2015.

8. Karla Walter, 4 Job Quality Questions All Applicants for Federal Funds Should Answer, Center for American Progress, June 20, 2023.

9. U.S. Department of Energy, Office of Clean Energy Demonstrations, Guidance for Creating a Community Benefits Plan for the Regional Clean Hydrogen Energy Hubs, last updated October 17, 2022.

10. U.S. Department of Labor, Project Labor Agreements as Tools for Equity; New York City Mayor’s Office of Contract Services, “Project Labor Agreements” (web page).

• establishing dedicated local labor standards offices that enforce workers’ rights laws 
• establishing ongoing worker boards or councils 
• passing local worker protection laws
• actively enforcing local worker protection laws 
• setting job quality standards for contractors with the municipal government 
• establishing legal consequences for labor violations among applicants for municipal permits or licenses 
• practicing high-road employment principles in relation to municipal employees
• championing worker issues through public leadership 

While other reports have done an excellent job of exploring local action on specific issues like paid sick leave, living wages, and creation of worker boards, this report identifies and examines the broader trend of increased local action and analyzes the landscape of cities and other localities’ pro-worker actions in a comprehensive way.

Why it matters: Policies and enforcement that protect the rights of workers, ensure workers are able to meet their basic needs, and support workers’ efforts to organize are foundational to building healthy, thriving, and equitable communities. Working people in the United States today face multiple crisis situations that not only adversely impact their well-being, but also undermine the health and well-being of communities. Outdated labor laws are skewed against workers trying to form and join unions, and workers who try often face retaliation and other violations by employers. Public enforcement resources are inadequate, and workers are increasingly unable to bring their claims in court because of forced arbitration. In this context, cities and localities are vitally important and necessary actors in the effort to expand and enforce workers’ rights. They are close to their residents, and often are nimble and fast-moving in responding to emerging needs. A few cities (along with a few states) are also at the vanguard of innovating on policy and piloting new approaches to expanding and protecting workers’ rights. There is very meaningful work currently happening at the local level, with untapped potential for much more local action. 

What can be done about it: Local policymakers, enforcers, advocates, and community members can work together to pilot new local laws, create dedicated labor enforcement agencies and worker boards, develop strategic community enforcement partnerships, and use permits to drive compliance. Localities can fight abusive state preemption that impairs the abilities of local governments to build upon minimum standards set at the state level. Unions, worker advocates, and the public can think creatively about how to enact measures within their own localities and press for action. Other actors and observers in this space—federal and state government, the media, funders, academics, and more—should develop a greater understanding of the emerging role of cities in protecting working people. They should work to institutionalize and chronicle protecting and supporting workers as part of our understanding of what localities do. This report offers a road map of opportunities to enact policies at the local level that advance workers’ rights and improve working conditions.

Executive summary

In recent years, cities, counties, and other localities have become innovators and leaders in standing up for working people. Responding to increased inequality, degraded working conditions, and insufficient or inconsistent worker protections at the state and federal level, localities have in many cases joined states as the “laboratories” of experimentation (as Supreme Court Justice Louis D. Brandeis described) in relation to workplace matters.1 A number of localities have come to view protecting workers and improving their conditions as part of their core municipal function.

This report provides an overview of some of the most noteworthy ways in which localities have taken action on behalf of working people in recent years:

• Some localities have established dedicated local labor standards offices that enforce workers’ rights laws; educate employers, workers, and the public about these laws; and in some cases help formulate or inform municipal policy in this area.
• Localities have established ongoing worker boards or councils to provide workers with a formal role in local government and/or access to local officials and agencies.
• Other localities have focused on passing local worker protection laws, including ordinances regarding minimum wages, paid sick leave, and fair scheduling; industry-specific protections for sectors with high violation rates or specific vulnerability (such as the domestic worker, gig, hotel, retail, fast-food and freelance industries); broader anti-discrimination protections; and specific laws responsive to the COVID-19 pandemic.
• Localities are actively enforcing local worker protection laws, including with funded community partnership models in some instances.
• Some localities have established job quality standards for contractors, while others have established legal consequences (including denial and revocation) for applicants for initial or renewed municipal permits or licenses who have a history of wage theft violations or unresolved labor standards orders.
• Localities are demonstrating how to be a high-road employer of municipal employees, including by incorporating labor standards like higher minimum wages and paid sick leave, and enabling or facilitating collective bargaining among workers in local government.
• Active localities and local elected and appointed government leaders are exerting leadership in the public sphere, through education and outreach about labor laws, issuance of reports, convenings and public hearings, and use of the bully pulpit.

Federal—and in some cases state—preemption creates some limitations on what localities can do to expand and protect workers’ rights. Preemption occurs when federal or state law prevents subordinate levels of government (in this case, municipalities) from legislating or acting on a given issue. Still, local governments have considerable opportunity to take meaningful action on behalf of the working people within their jurisdictions.

The time is ripe for local action to advance workers’ rights. Working people are expressing dissatisfaction with worsening working conditions by resigning, forming and joining unions, and demanding change. 

Overview and introduction

Policies and enforcement that protect the rights of workers, ensure that workers are able to meet their basic needs, and support workers’ efforts to organize are foundational to building healthy, thriving, and equitable communities (Bhatia et al. 2013; USC ERI 2020). Working people in the United States today face multiple crisis situations that not only adversely impact their well-being, but also undermine the health and well-being of communities. The COVID-19 pandemic has led to many workplace clusters. Federal and state workplace measures have been varied, yet insufficient, to provide adequate protection from the virus.

Even before the pandemic, working people had been experiencing a multitude of serious challenges. Two widespread challenges are wage theft—the practice of employers failing to pay workers the full wages to which they are legally entitled—and misclassification of workers as independent contractors—the practice of employers labeling workers as independent contractors, rather than employees, to avoid paying unemployment and other taxes on workers and covering them with workers’ compensation insurance. Outdated labor laws are skewed against workers trying to form and join unions, and workers who try often face retaliation and other violations by employers (McNicholas 2019). Public enforcement resources are inadequate, and workers are increasingly unable to bring their claims in court because of forced arbitration (Hamaji et al. 2019). Employers who fail to pay unemployment or other taxes deprive public coffers of resources needed for programs serving important human needs (Erlich 2019). Meanwhile, the labor market itself is skewed—workers’ wages have not kept up with their productivity (Mishel 2021), and corporate concentration along with anti-competitive practices add to workers’ challenges in getting a fair wage (Stansbury 2021). These challenges have fallen hardest on workers of color and workers in low-wage industries.

Federal and state leaders who wish to take action on these thorny and deep-seated issues often face significant obstacles when they seek to pass laws, promulgate regulations, or take other steps responsive to workers’ needs. Such challenges can be even greater in relation to emerging developments in the workplace.

Supreme Court Justice Louis Brandeis famously described states as laboratories of public policy experimentation.2 In relation to workers’ rights, U.S. localities3 have been true laboratories of experimentation in recent years (Diller 2014).4 Historically, the federal government and states have been responsible for workplace regulation; over the years, cities and localities have not generally taken a leading role.5 But in roughly the past decade, cities and localities have become increasingly important actors in expanding and enforcing workers’ rights—what some commentators have called the “municipalization” of labor law (Sarchet 2021).

Cities and localities have introduced cutting-edge laws that do not exist at the federal or state level (including some responsive to newly emerging problems); established new offices devoted to protecting workers; used their contracting, licensing, and permitting powers to drive employer compliance; and implemented new methods of enforcement, including close and even funded partnerships with worker and community organizations. Such action by localities has occurred not only in traditionally worker-friendly regions, but also in progressive cities located within more conservative states. (Efforts in such locales have often, but not always, been met with state-level preemption measures, as noted by Blair et al. 2020 and Wolfe et al. 2021). And in some cases, such as the expansion of paid sick days, policy leadership at the local level has provided proof of concept and helped build momentum for states (and earlier in the pandemic, even the federal government) to take action. Local government action on workers’ rights also often reflects efforts to address local conditions when it comes to cost of living, dominant and emerging industries, and the needs and organizing of specific communities (especially communities of color and immigrant communities).

This report provides both an outline and a road map: an outline of actions that cities and localities have taken in recent years to protect workers, and a road map of possible policy and enforcement options for local leaders, both elected and appointed, to consider.6 Such actions include:

• establishing a dedicated department, office, or subagency within city government focused on worker issues
• creating boards or councils that provide workers with a voice, a role, and/or access to local government
• passing laws that create new and essential rights for workers
• enforcing worker protection laws, including through strategic, innovative, and/or collaborative approaches
• leveraging contracting, licensing, and/or permitting powers to raise and address worker issues
• incorporating high-road employment practices and labor policies in relation to their own municipal workforces
• using soft powers, including community education and outreach, issuance of reports, and other “bully pulpit” vehicles for reaching the community and highlighting worker needs and available resources

Notably, some cities and localities have taken meaningful action to protect workers and advance their rights and well-being during the COVID-19 pandemic; more should follow suit. This report also outlines a number of measures taken at the local level in response to COVID-19.

This report is intended not only for local leaders, but also for labor unions and worker advocates, to help deepen their understanding of policy and enforcement levers at the local government level in order to guide advocacy and collaborative governance efforts. This report can also inspire academics and other researchers to study local efforts to advance workers’ rights. Finally, policymakers at all levels of government should pay attention to the innovative solutions advanced by localities. ​​

At least 20 localities have created or are creating dedicated local labor agencies

A number of localities have created agencies specifically dedicated to enforcing workers’ rights under local ordinances, including laws addressing minimum wages,7 wage theft, paid sick and safe leave, fair scheduling/fair workweek requirements requiring advance notice of scheduling, fair chance hiring laws, gig worker rights, and more. Several of these agencies are also charged with analyzing and potentially proposing local labor policies. In other instances, localities do not have a dedicated stand-alone office, but units of other municipal agencies focus specifically on workers’ rights matters. And some localities without dedicated units have tasked specific government entities with enforcing wage theft or paid sick leave laws, such as a city manager, treasurer, or attorney; office of human rights; unit of the mayor’s office; or other officials (A Better Balance n.d.b.; Boulder 2022; Pinellas OHR n.d.; Miami-Dade WTP n.d.).8

Creation of a dedicated unit within local government focused on workers’ rights can be transformative. It ensures that municipal public servants will be involved in worker protection in a continuous, proactive, ongoing, and in-depth manner. It allows specialized staff to develop expertise on the relevant municipal laws and policies, as well as deep knowledge of issues affecting local workers. Where there is a dedicated worker-focused office in local government, staffers can develop ongoing relationships with relevant stakeholders like worker advocacy groups, unions, immigrant rights advocates or service providers, employment lawyers, and employer associations, as well as other relevant government enforcement agencies at the local, state, and federal levels. A dedicated office also can be mobilized to address emerging needs, including those that arose in the COVID-19 pandemic. Most importantly, establishment of a dedicated office institutionalizes and embeds the work within local government, ensuring the focus on workers and their challenges will continue beyond a particular administration.

Jurisdictions with dedicated agencies, subdivisions, or staff include Berkeley (California), Boston, Chicago, Denver, Duluth (Minnesota), Emeryville (California), Flagstaff (Arizona), Los Angeles City, Los Angeles County, Minneapolis, New York City, Philadelphia, San Francisco, San Jose, Santa Clara County (California), Seattle, St. Paul (Minnesota), and Tacoma (Washington).9 In addition, the San Diego County Board of Supervisors voted in 2021 to create a county labor office, and the San Diego City Council followed suit in 2022 by voting to create a labor enforcement office in a new Compliance Department.10 Tucson, Arizona, voters in 2021 passed a ballot initiative to create a local minimum wage and also a city Department of Labor Standards.11 Numerous Florida localities have created wage theft enforcement or mediation programs of various kinds: Broward County (complaint form), Miami-Dade County, and Pinellas County.12 Via court order, Palm Beach County created a Wage Dispute Division within the county civil court.13

More dedicated units to enforce workers’ rights are likely on the horizon. For example, a legislative proposal resulting from the work of an Earned Sick and Safe Leave Task Force is currently under consideration in Bloomington, Minnesota (population of approximately 90,000), home of the Mall of America.14 The city manager there has stated that two full-time equivalent staffers (one attorney and one paralegal) would be needed for this work.15

Snapshots of several local agencies in cities of varying size:

Berkeley, California (Pop. 124,321): The Workplace Enforcement and Standards Unit was created in 2014. It currently has a single full-time equivalent (FTE) employee, who also holds nonlabor-related responsibilities in addition to enforcing the city’s minimum wage, living wage, paid sick leave, and other laws (U.S. Census Bureau 2022a).

Chicago (Pop. 2.7 million): Chicago’s Office of Labor Standards, housed in the Department of Business Affairs and Consumer Protection, began operating in 2019 (its official launch date was in 2020). As of June 2022, the office has eight FTEs. It enforces the city’s minimum wage, wage theft, paid sick leave, fair workweek, COVID and vaccine anti-retaliation laws, as well as a law effective in January 2022 requiring employers of domestic workers to provide them with written contracts (U.S. Census Bureau 2022b).

Denver (Pop. 715,522): Denver Labor, created in 2019, is a division enforcing wage and hour laws located in the Denver auditor’s office. The office has 25 FTEs, and it enforces the city’s minimum wage laws, as well as a number of laws related to government work: a minimum wage applicable to city contractors, the city’s prevailing wage, the city’s living wage, and more. The office also has a community education emphasis: there are full-time community education staff and an annual outreach/education plan, including radio and internet ads, weekly online training, hundreds of outreach events, and multilingual written materials (U.S. Census Bureau 2022c).

Duluth, Minnesota (Pop. 86,697): Enforcement of Duluth’s earned sick and safe time law (effective in 2020) is handled through the equivalent of one employee housed in the city clerk’s office (U.S. Census Bureau 2022d).

Los Angeles City (Pop. 3.9 million): The Office of Wage Standards in the city of Los Angeles was created in 2015. It is authorized to have 30 FTEs, although in February 2022, this figure included nine vacancies. It enforces the city’s minimum wage, paid sick leave, and fair chance hiring laws (U.S. Census Bureau 2022f). (The county of Los Angeles has a separate enforcement agency that enforces the county’s own workplace laws.)

Minneapolis (Pop. 429,954): The Labor Standards Enforcement Division was created within the city’s Department of Civil Rights in 2016. The office has five FTEs, and it enforces the city’s paid sick and safe time, minimum wage, wage theft, and freelance worker protections laws, as well as a law giving hospitality workers the right of recall, which will sunset one year after the COVID-19 public health emergency (U.S. Census Bureau 2022g).

New York City (Pop. 8.8 million): New York City’s Office of Labor Standards and Policy was created in 2016, and is housed in the Department of Consumer and Worker Protection (DCWP). (That agency was long known as the Department of Consumer Affairs; its name changed in 2019 (Greenbaum 2019) in part to convey the agency’s focus on workers as well as consumers.) In 2021, the office had 33 FTEs. While it lacks jurisdiction to set a city minimum wage, the office enforces the city’s Paid Safe and Sick Leave Law, Freelance Isn’t Free Act, and the Fair Workweek Law in retail and fast-food, as well as several new cutting-edge laws, including a “just cause” termination law giving fast-food employees protections against arbitrary termination, and a law giving food delivery workers greater control over their working conditions and authorizing DCWP to set a minimum pay rate (U.S. Census Bureau 2022h).

Philadelphia (Pop. 1.6 million): In the June 2020 primary election, voters of Philadelphia overwhelmingly approved a ballot question to amend the city charter to create a city department of labor, demonstrating widespread public support for municipal involvement in workers’ rights issues (U.S. Census Bureau 2022i; Ballotpedia n.d.). The head of the Philadelphia Department of Labor is the deputy mayor for labor, holding a high-profile position within city government. The Office of Worker Protections, located within the department, has a total of nine FTEs, and enforces wage theft, paid sick leave, and fair workweek laws; laws covering specific industries (domestic worker bill of rights, wrongful discharge of parking employment, recall and/or retention of hotel, travel and hospitality workers); and more. The office established a domestic worker task force and has been tasked with creating a portable benefits system for domestic workers (Orso 2020), likely to be the nation’s first. In addition, in 2020 and 2021, the office partnered with worker organizations on a citywide effort on the Philadelphia Worker Relief Fund (MF Phila. n.d.; Cox 2020), which distributed more than $2.2 million to 2,820 families left out of COVID-19 government relief (Philadelphia 2020a). The office also collaborated on a referral system with the city health department’s COVID-19 containment unit to mediate paid sick leave when workers reported exposure.

San Francisco (Pop. 873,965): San Francisco’s Office of Labor Standards Enforcement (OLSE) was created nearly 20 years ago (San Francisco n.d.a; SF OLSE n.d.e). The office has 30 FTEs, and currently enforces more than 30 citywide laws, including ordinances on minimum wage, paid sick leave, fair chance employment, scheduling laws, and others, as well as a handful of other laws related to government contracting (SF OLSE n.d.f; U.S. Census Bureau 2022j).

San Jose (Pop. 983,489): San Jose’s Office of Equality Assurance, with a staff of eleven, implements, monitors, and administers the city’s wage policies, including the living wage law applicable to city service contracts, the prevailing wage law which covers public works (construction) projects, and the minimum wage ordinance applicable to employers for work performed within the city. The Office also contracts with a number of neighboring localities to provide minimum wage enforcement services for their own local minimum wages. For example, in 2020, the City of San Jose entered into contracts with the nearby cities of Burlingame, Cupertino, Milpitas, Redwood City, San Carlos, San Mateo, Santa Clara, South San Francisco, and Sunnyvale; maximum compensation under the contracts is $40,000 to $45,000 to cover a period of two and a half to three years. This arrangement allows smaller localities to functionally pool resources in order to have their local laws enforced (San Jose 2020; San Jose n.d.; U.S. Census Bureau 2022k).

Santa Clara County, California (Pop. 1.9 million): The County’s Office of Labor Standards Enforcement was created in 2017. The office has capacity for five FTEs; four were filled as of May 2022. Among other things, the office ensures that recipients of county permits, licenses, and contracts comply with labor laws and satisfy outstanding judgments issued by the California Labor Commissioner’s Office. The office also enforces wage theft prevention and living wage requirements related to contracting, contained in Chapter 5 of the Santa Clara Board of Supervisors Policy Manual (Section 5.5.5.4) (SC BOS 2020). In 2021, the office also enforced a hazard pay ordinance related to COVID-19 (SC OLSE n.d.c; U.S. Census Bureau 2022l).

A deeper dive into Seattle’s local labor agency

Seattle’s Office of Labor Standards has grown rapidly since its creation in 2015 as a division within the Seattle Office of Civil Rights. The Office of Labor Standards became an independent, standalone city agency in 2017, and the breadth and impact of its activities provide a useful example of the potential of municipal labor agencies.

Staffing: As of February 2022, the office had 34 FTEs and one full-time temporary position. These position include a director, deputy director, communications manager, seven outreach positions, four policy-focused positions, three operations and finance positions, and eighteen enforcement officials.

Ordinances: The office enforces 18 city laws. These include laws of broad application (paid sick and safe time, fair chance employment, wage theft, and commuter benefits ordinances); laws targeting specific industries (secure scheduling ordinance for retail and food services workers, as well as ordinances protecting domestic workers, transportation network company drivers, and hotel workers); and laws enacted during the COVID-19 pandemic (paid sick and safe time for gig workers, as well as premium/hazard pay for gig workers/grocery employees) (Seattle OLS 2012, 2013, 2015a, 2015b, 2017, 2020b, 2020d, 2020e, 2020h, 2021a). Finally, on September 1, 2022, the Independent Contractor Protections Ordinance (Seattle OLS 2021b) will take effect; it will require commercial hiring entities to provide certain precontract disclosures and payment disclosures, and also requires timely payment of contracts. See Section 6 for more in-depth discussion.

Enforcement: The office has brought a number of successful enforcement actions, including in fast-food, gig economy, construction, retail, grocery, and other industries. These cases are described in Section 7.

Policymaking: The office has helped develop city labor policy in various ways. The office ran a broad policymaking process to develop two labor standards ordinances for transportation network companies (TNC) drivers, including contracting for a minimum compensation standard study (Reich and Parrott 2020). The office conducted an extensive stakeholder process and drafted the eventual TNC Driver Minimum Compensation Ordinance (Seattle OLS 2020i), which went into effect in 2021 and the TNC Driver Deactivation Rights Ordinance (DRO). The DRO provides drivers protection against unwarranted termination from companies’ platforms, a pathway to resolve deactivation disputes before a neutral arbitrator, and which created a first-in-the-nation Driver Resolution Center to provide consultation and direct representation to drivers facing deactivation, along with culturally relevant outreach and education, and other support. The Office of Labor Standards completed a request for proposal to award an 18-month contract for just more than $5 million to a community organization to get the Driver Resolution Center up and running (Seattle OLS n.d.h).16

In addition, pursuant to a city council resolution and recommendation by the city’s Domestic Workers Standards Board,17 the Office of Labor Standards will be crafting a proposal for portable paid time off for domestic workers.

Pandemic response: The Office of Labor Standards has taken numerous actions in response to the COVID-19 pandemic. In April 2020, following amendment of the city’s Paid Sick and Safe Time Ordinance (PSST) to expand PSST uses in response to COVID-19, the office conducted emergency rulemaking to ease the burden of verification for use of PSST on workers and the health care system. The office provided updated information in more than 11 languages and, with the city’s Department of Neighborhoods, increased access to this information through audio and video recordings, as well as through trainings and town hall meetings. Responding to the increase of domestic violence during the pandemic, the office also partnered on a safe leave training with a local community organization, API Chaya, and the Mayor’s Office on Domestic Violence and Sexual Assault.

The office also assisted in distribution of food vouchers and masks via community-based organizations, including the office’s Community Education and Outreach Fund partners, to workers who experienced structural or institutional barriers to accessing support from government (e.g., language barrier, fear of deportation, experienced domestic violence, did not qualify for other benefits). The community-based organizations enrolled more than 800 workers who had lost their jobs or experienced a decrease in hours or wages due to the pandemic. Each worker received $1,920 in grocery vouchers over a seven-month period.

Finally, along with the mayor’s office and the Office of Immigrant and Refugee Affairs, the Office of Labor Standards worked to increase access to unemployment funds for workers, especially for potentially misclassified gig workers and domestic workers, and also to enhance access to information about unemployment benefits in multiple languages. One effort included contracting with a community organization for three months to provide cultural- and language-specific outreach and referral assistance to transportation network company, taxi, and for-hire vehicle drivers seeking to access COVID-19-related relief resources. The community organization assisted 1,400 workers with their unemployment insurance claims in 12 languages, including Kiswahili, Nuer, Twi, and Hausa. Another effort included partnering with a local civil legal aid organization to provide training on unemployment insurance, and paid sick and safe time.

Several cities have created boards or councils to provide workers with a formal role and/or access to local government

Workers’ boards are bodies established by governments that include worker representation and that typically aim to provide workers with a voice and formal role in setting higher minimum standards for jobs in particular industries. These boards typically investigate challenges facing workers by conducting hearings and outreach activities, issuing reports on findings, and making recommendations regarding minimum wage rates, benefits, and workplace standards. By focusing on workers in specific industries, these boards are able to address industry-specific issues and involve workers and their organizations directly in governance decisions.

Professor Arindrajat Dube, based on his analysis of industry-specific wage boards in Australia, concludes that wage-setting boards “are much better positioned to deliver gains to middle-wage jobs than a single minimum pay standard” (Dube 2018); the local boards described here do not have wage-setting powers, but some may make recommendations. In 2019, the Center for American Progress issued a how-to guide for state and local governments and advocates interested in developing workers’ boards or similar structures (Andrias, Madland, and Wall 2019). The guide’s detailed recommendations include ensuring a broad mandate; requiring representative and democratic selection of members; granting boards authority to gather relevant information through hearings and investigations; granting boards authority to issue recommendations; creation of strong enforcement mechanisms to ensure compliance with new standards; and empowering worker participation in board activities by requiring employers to provide reasonable time to participate and compensating workers for their participation, among other things.

In some states, preemption of local wage or standard-setting limits potential recommendations a board could make that would result in material policy change; however, even then, workers’ boards may be able to impact local government purchasing and contracting policies, workforce development programs, tax abatement and incentive policies, economic development planning and community benefits agreements, distribution of local government funding, and workplace safety trainings. They may also be able to provide independent monitoring of local, state, and federal public health and labor laws, and inclusive economic development planning. Worker boards are a relatively new development, mostly established in the last five years.

The following are examples of several local worker boards or similar structures:

Seattle Domestic Workers Standards Board: In 2019, Seattle passed the Domestic Workers Ordinance, which along with establishing a minimum wage and entitling workers to rest and meal breaks, also created a Domestic Workers Standards Board (Seattle CC 2018). The board, members of which are appointed by the mayor and city council (and one member is appointed by the board itself), requires representation from domestic workers (including workers who are and are no members of worker organizations), employers, and the community (with an emphasis on vulnerable populations like people with disabilities) (Seattle OLS 2018a). The board is empowered to provide recommendations to the city council on workplace safety standards, discrimination and sexual harassment, training for workers and employers, access to leave, wage standards, workers’ compensation, hiring agreements, and other topics, and has been granted funding to implement these recommendations.

Detroit Industry Standards Boards: Detroit passed an ordinance in November 2021 creating a structure for industry standards boards (SEIU Healthcare 2021; Detroit 2021). A standards board in a specific industry can be established under the ordinance by the city council, at the request of the mayor, or by petition of at least 225 workers in a given industry. The standards boards are composed of workers, employer representatives, and other individuals appointed by the mayor and city council. The industry boards are tasked with investigating industry conditions, conducting outreach to workers, making recommendations as to pay, benefits, training opportunities and scheduling, and forwarding complaints to relevant enforcement agencies.

Harris County (Texas) Essential Workers Board: Harris County established an essential workers board in 2021 to advise the county on programs and policies that support essential workers. All members must be “low-income essential workers,” with at least one worker representative from each of the following essential industries: airport or transportation; construction; domestic work or home care; education or child care; grocery, convenience, or drug store; health care or public health; janitorial; food services, hospitality, or leisure services; and retail (Trovall 2021; Harris County 2021). In addition to advising the county on its overall approach to protecting essential workers’ rights and providing a public forum, the board is also tasked with providing feedback on the county’s “purchasing and contracting policies, workforce development programs, tax abatement and incentive policies, community benefits agreements, distribution of federal COVID-19 relief and recovery funds, disaster preparedness and recovery programs, OSHA trainings, independent monitoring of local, state, and federal public health and labor laws, and inclusive economic development planning.”

Durham (North Carolina) Workers’ Rights Commission: In 2019, Durham formed the Workers’ Rights Commission as an advisory body to the city council on working conditions in Durham. Except for a liaison to the city council, all members are workers appointed by the city council and must include workers from the largest employers in Durham, workers in low-wage industries, workers organized in unions, and unorganized workers. The commission aims to provide a public forum for discussion and exploration of workers’ rights, conduct studies, recommend pro-worker policies for the city council’s state legislative agenda, craft a workers’ bill of rights and develop a voluntary recognition program to reward employer compliance, propose standards to encourage all employers within the city to establish a minimum standard, support workers in union campaigns, and provide channels of communication between organized and unorganized workers (Durham WRC n.d.).

Twin Cities’ Workplace Advisory Committees: In 2016, Minneapolis created a Workplace Advisory Committee in connection with passing the city’s safe and sick time ordinance (Minneapolis 2016a). The committee is composed of representatives from organized labor, workers, and employer representatives, among others. The committee is tasked with providing advice on workplace initiatives, recommendations on community engagement, and monitoring and evaluating implementation of workplace policies (Minneapolis 2016a). St. Paul’s Labor Standards Advisory Committee (St. Paul n.d.a) advises and supports the city’s Labor Standards Enforcement and Education Division. The committee includes representatives of employers, employees, and the public, and advises in the development and implementation of policies, procedures, and rules related to the city’s minimum wage and earned sick and safe time ordinances; recommends actions to improve strategic community outreach and education efforts; supports strategic enforcement and strategic outreach; explores and recommends opportunities and resources to help small businesses; assists with community partnerships; and engages business owners, workers, and community stakeholders to gather feedback and recommendations.

Los Angeles County Public Health Councils (LA PHC n.d.): In November 2020, Los Angeles County approved a program establishing public health councils to help ensure that employers follow COVID safety guidelines. Implemented and overseen by the county’s Department of Public Health, the program empowers workers to form public health councils at their worksites to monitor compliance with county health orders in the following industries: food and apparel manufacturing, warehousing and storage, and restaurant (LA County BOS 2020). The Department of Public Health will enlist the help of certified worker organizations to conduct outreach and education to workers interested in forming public health councils.

Localities can serve as model employers in relation to their own workforces

Localities can support working people by creating good working conditions for their own municipal workforces. Nationally, about one-third of state and local employees are paid less than $20 per hour, and more than 15% are paid less than $15 per hour. In 13 states, more than 20% of state and local workers are paid less than $15 per hour (Sawo and Wolfe 2022). Women and Black workers are more likely to be employed by local and state governments, so improving working conditions for local government workers advances important equity goals (Cooper and Wolfe 2020).

A significant portion of local government employees are union members (40.2% in 2021) (BLS 2022); high unionization rates among law enforcement and teachers contribute to these numbers. Working conditions for these employees are established through collective bargaining agreements with the locality. Working conditions of nonunionized municipal workers are governed by applicable federal, state, and local laws, as well as municipal policy.

Localities can support workers by raising labor standards for their own employees regardless of union membership. They can also take steps to allow and facilitate collective bargaining by their employees.

Limited public funds can lead to concerns about the cost of supporting municipal workers in light of other pressing public funding needs. However, in addition to improving municipal job quality as a matter of values and commitment to working people, localities themselves can benefit from doing so. High-road job offerings can help attract better-qualified workers to local government and reduce turnover, both of which enable local governments to provide higher-quality public services, as well as avoiding the cost associated with employee turnover. Municipal employers are often the largest employers in many regions (Hain and Coffin 2020), and thus improved standards for municipal workers can also lead to additional benefits, like public health gains when paid sick leave prevents spread of illness, and stabilizing and stimulating the local economy in times of stagnation or recession. By exemplifying practices of a model employer, local governments also can play a leadership role for private and nonprofit employers, helping create local norms that lift local working standards generally. And collective bargaining in particular can help reduce racial and gender pay gaps, attract workers to local government, and create high-quality jobs (Morrissey and Sherer 2022).

Local governments can also support municipal workers by limiting and resisting privatization, defined as the shifting of governmental functions and responsibilities to the private sector through such activities as contracting out (Local Progress 2019). Privatization of local government functions has proliferated in the recent past, affecting services and infrastructure like water treatment, trash collection, and toll collection (Early 2021; Dutzik, Imus, and Baxandall 2009). Privatization not only denies opportunities to municipal workers who are more likely to be unionized and to have higher job standards, it also undermines democratic accountability. Moreover, projected cost savings from privatization often do not materialize, and service quality often declines under private provision (PWF n.d.b).18

Localities have raised labor standards for municipal employees

A number of localities have raised the minimum wage paid to their own municipal workforce; recent examples include Atlanta; Jersey City, New Jersey; Milwaukee; New Orleans; North Miami Beach, Florida; Tallahassee, Florida; and West New York, New Jersey (Noble 2021; Fox 2021a, 2021b; Atlanta 2017; Miami Times Staff 2021). More than 100 localities have passed paid family or parental leave policies for their municipal employees (NPWF 2020). Many local governments extended emergency paid sick leave to their municipal workers during the pandemic, and some front-loaded the annual sick leave allotment for all employees (Hain, Yadavalli, and Wagner 2020). The city of Austin distributed stipends to some city workers who continued to provide in-person services during the COVID-19 pandemic (Newberry 2020).

Localities can enable and support collective bargaining and union organizing by municipal workers

Localities also can enable or facilitate collective bargaining and unionizing among their municipal workforce. Public employee unions can be stable bargaining partners to local governments, promote labor peace, and ensure the delivery of high-quality services.19 In addition, unions reduce inequality as well as race and gender disparities (EPI 2021; Bivens et al. 2017) and boost democratic participation (McElwee 2015).

Whether or not local government workers can form and join unions varies by state and by the type of municipal worker. Many state statutes expressly authorize collective bargaining by teachers, police officers, and firefighters (Sanes and Schmitt 2014). In some states, local governments are permitted to collectively bargain with all municipal workers (Monroe 2018; Vermont 1973).20 In some states, local governments are prohibited from doing so.21 In states where collective bargaining for local employees is neither guaranteed nor prohibited by state law, localities can facilitate unionizing and collective bargaining by their own workforces by passing local ordinances permitting collective bargaining. Two states where there has been heightened attention to this issue in recent years are Virginia and Colorado. In Virginia, the General Assembly in 2020 passed a law lifting a previous ban, thereby allowing localities to recognize and collectively bargain with unions by passing an ordinance. A number of Virginia localities have since passed collective bargaining ordinances, including the city of Alexandria, Arlington County, Fairfax County, Loudoun County, and the Richmond School Board (Alexandria Magazine Living Staff 2021; Armus 2021; Olivo 2021; Loudoun 2021; Hunter 2021). In 2022, the Colorado state legislature passed a bill granting public employees the right to collectively bargain; previously localities could decide whether to grant such rights, and out of approximately 270 localities in the state, only 16 had collectively bargained contracts with any of their workers (Colorado General Assembly 2022; Miller 2022; Vo 2022; Kenny 2021). For example, Adams County, Colorado, had passed a resolution in 2017 authorizing collective bargaining for county employees.22 In states such as Colorado and Virginia, localities can explicitly grant their municipal workforce the right to collectively bargain. Cities like Louisville, Kentucky, Memphis, Tennessee, Salt Lake City, Utah, and Tulsa, Oklahoma, have recognized and entered into collective bargaining agreements with municipal unions (Louisville HR n.d.; AFSCME 1733 2021; SLC HR n.d.; Tulsa HR n.d.).

In addition, localities can emulate legislative measures taken by certain states to facilitate public employee union access to government workers in response to the Supreme Court’s decision in Janus v. American Federation of State, County, and Municipal Employees, Council 31, et al. That case held that requiring public employees to pay union fair share agency fees to cover the costs of collective bargaining violates the First Amendment (McNicholas 2018).23 The decision bars unions from requiring workers who benefit from union representation to pay their fair share of that representation, thereby reducing public employee union resources and potentially their stability. In the wake of the Janus decision, a number of states, including California, Massachusetts, New Jersey, Washington, and several others, passed measures to reduce barriers to public-sector unionization, such as by requiring public employers to allow public employee unions access to new employee orientations, and to provide public employee unions with lists of new and current employees with contact information (NCSL 2019).

Finally, the 2022 Report of the White House Task Force on Worker Organizing and Empowerment (Harris and Walsh 2022) contains a number of recommendations for the federal government to increase unionization rates among federal employees. While some of the measures contained in the report would potentially be preempted by the National Labor Relations Act, many of them could be adopted readily by local governments, such as:

• facilitating exposure to unions during the hiring process for job applicants and onboarding process for new employees, including listing information about whether a position is in a bargaining unit and the relevant union in job opportunity announcements, and encouraging agencies to offer their unions more opportunities to communicate with new hires during onboarding
• developing guidance and labor relations materials for agencies to use in trainings for managers and supervisors regarding unfair labor practices and neutrality in union organizing campaigns
• increasing and visibly supporting workers’ right to organize, including a know-your-rights initiative on the right to organize and collectively bargain

The report contains extensive analysis and practical suggestions about ways to encourage and facilitate collective bargaining.

Localities have enacted worker protection laws on a range of topics

Local governments typically have some authority to initiate legislation, subject to their authority under the relevant state constitution, state statutes, and city charters. In recent years, local governments have increasingly used this power to pass laws to advance workers’ rights.24

Laws setting higher minimum wages

In recent years, localities have often led the nation in policymaking to raise workers’ wages. The Fight for 15 campaign and other worker advocates and organizations have played a key role in seeking increased local minimum wage floors, which has paved the way for more innovative policymaking to advance workers’ rights by local governments (Meyerson 2019).25 Local wage and hour laws exist in a statutory landscape, including the federal Fair Labor Standards Act (FLSA), which establishes a federal minimum wage, overtime pay, record-keeping, and youth employment standards, and state laws that similarly establish their own state-level minimum wage and hour standards. The FLSA, and in some cases state law, acts as a floor, permitting local governments to provide more generous protections for workers. Some states, however, preempt local governments from setting higher local requirements, as discussed in further detail below (EPI 2019).

Currently, 52 cities and counties have local minimum wage laws that raise the minimum wage above the level established by state and federal governments (UC Berkeley Labor Center 2022; Lathrop 2021).26 Local minimum wages aim to keep workers out of poverty and to increase consumer purchasing power to spur economic growth. Such wages sometimes are enacted in metropolitan areas where the costs of living are higher relative to the rest of the state or region. Local minimum wages may vary in terms of wage levels, implementation timelines, and exemptions (for example, based on the size or classification of an employer, such as employers with more than 25 employees or nonprofits). Since 2012, local minimum wage increases have affected more than 4 million workers, more than half of whom are workers of color, and generated more than $33 billion in additional income for these workers each year (Lathrop, Lester, and Wilson 2021).

One way to increase the wages of many service workers without setting a higher minimum rate is for a locality to disallow the lower minimum wage that is permitted in many states and under federal law for workers who customarily and regularly receive tips (USDOL 2022b). Tipped workers are more likely to be women and people of color, and more likely to be subject to sexual harassment (Schweitzer 2021).27 In 2016, the city of Flagstaff eliminated the tipped minimum wage by referendum (Results for America n.d.). Las Cruces, New Mexico, also has enacted a higher tipped minimum wage than the state.28

In some instances, laws setting local minimum wage rates have focused on particular industries. Seattle’s Domestic Workers Ordinance requires domestic workers be paid at least the city’s minimum wage (Seattle OLS 2018a). At least four California cities—Los Angeles, Oakland, Santa Monica, and West Hollywood—have required a higher minimum wage for their hotel workers (LA DPW n.d.; Oakland n.d.; Santa Monica n.d.; West Hollywood n.d.).29

Laws addressing wage theft

Wage theft occurs when employees do not receive wages to which they are legally entitled for their work, including paying workers less than the minimum wage, not paying overtime premiums to workers who work more than 40 hours a week, or asking employees to work “off the clock” before or after their shifts. Cooper and Kroeger (2017) investigated just minimum wage violations, and found that in the 10 most populous states in the country (California, Florida, Georgia, Illinois, Michigan, New York, North Carolina, Ohio, Pennsylvania, and Texas), 17% of eligible low-wage workers reported being paid less than the minimum wage, amounting to 2.4 million workers losing $8 billion annually. Cooper and Kroeger estimate that workers nationwide lose $15 billion annually from minimum wage violations alone. A 2021 study found that more than $3 billion was recovered on behalf of workers by federal and state enforcers and through private litigation (Mangundayao et al. 2021).

In addition to setting up dedicated enforcement agencies and ensuring that these agencies are robustly funded to pursue violations, local governments can pass laws to address the problem of wage theft. For example, Denver passed a wage theft ordinance that classifies wage theft as a criminal misdemeanor and empowers the city attorney’s office to prosecute claims of $2,000 or less and seek restitution (Denver 2021).

In some instances, such measures may be a way for cities preempted from setting minimum wage rates to nonetheless have an impact on wage-related concerns and to protect workers within their jurisdiction from predation and abuse. Numerous localities in Florida have passed ordinances setting up administrative processes that make it easier for workers to file a complaint and recoup stolen wages without retaining a lawyer. In Florida, Miami-Dade County led the way, followed by Alachua County, Broward County, Hillsborough County, Osceola County, Pinellas County, and the city of St. Petersburg (Huizar 2019b). These ordinances set out a procedure for administrative resolution of wage theft claims by first allowing workers with claims of more than $60 in unpaid wages to settle claims with the city’s help. If those claims are not resolved, workers then may proceed to a hearing where the employer may be exposed to additional penalties (Miami-Dade WTP n.d.). An analysis of the Miami-Dade County Wage Theft Program found that between its adoption in 2010 and September 2014, workers recovered $2,039.83 in unpaid wages, on average, an amount researchers found was “well above the average recovered by federal enforcement” (RISEP-FIU 2014).

Finally, more wage theft protections at the city level may be on the horizon. The Austin (Texas) City Council passed a resolution in early 2022 directing the city manager to develop an ordinance on wage theft, with stakeholder input.30 Houston and El Paso, Texas, had previously passed similar resolutions (Ramirez 2022).

Paid sick and safe leave

Presently, 19 cities and counties have laws requiring employers to permit workers to take time to recover from an illness or care for a sick loved one and to be compensated for that time (A Better Balance n.d.b, 2021).31^, 32 Now 14 states and Washington, D.C., also have passed laws requiring paid sick leave (A Better Balance n.d.b), but local governments first led the way. For example, Jersey City, New Jersey, first enacted a paid sick leave ordinance in 2013, followed by 12 additional cities before a statewide law took effect in 2018.33 Research shows that paid sick leave ordinances effectively slow and reduce the spread of contagious illnesses by reducing the likelihood that workers will go to the workplace sick (otherwise referred to as sick presenteeism) (WCEG 2020). Especially for workers in low-wage industries, paid sick leave provides economic security when facing illness. Meanwhile, research has shown that businesses do not find such laws to be particularly burdensome once they are in effect. For example, a study of New York City employers revealed that “[b]y their own account, the vast majority of employers were able to adjust quite easily to the new law, and for most the cost impact was minimal to nonexistent” (Appelbaum and Milkman 2016). Moreover, 86% of the employers surveyed expressed support for the paid sick days law.

Local paid sick leave laws vary—i.e., exemptions for smaller employers, how family and loved ones are defined, the rate at which workers accrue sick time, and when workers start to earn sick time and whether it rolls over. However, many of them were developed with the technical assistance of groups like the nonprofit organization A Better Balance (A Better Balance n.d.a), and therefore have similar features. They generally provide somewhere in the range of 40 to 48 hours of leave annually, and prohibit retaliation against workers for taking leave.

Some of these laws also create a right to “safe leave” for situations in which workers or their family members are victims of domestic violence, stalking, and sexual assault (A Better Balance 2019). Safe leave laws can be used, for example, to obtain a protective order, access social services, or relocate.

Fair scheduling

Eight cities—Chicago; Emeryville, California; New York City; Philadelphia; San Francisco; San Jose, California; SeaTac, Washington; and Seattle—have laws to ensure workers have predictable schedules, more opportunities for existing employees to work, and sufficient periods of rest between shifts (A Better Balance 2022c). This set of policies, which have commonly been referred to as fair workweek or fair scheduling laws, have been championed and implemented because workers, particularly in the service sector, commonly receive their weekly work schedules only a few days in advance, and their scheduled work hours and workdays often change substantially from week to week. Fair workweek laws were first passed at the local level (Fair Workweek Initiative n.d.), paving the way for state-level action; Oregon has now adopted a statewide fair scheduling law.

Research suggests that unstable and unpredictable work scheduling practices undermine workers’ health and well-being and also lead to economic insecurity and income volatility, and that the fair workweek law in Seattle increased not only schedule predictability, but also subjective well-being, sleep quality, and economic security (Harknett, Schneider, and Irwin 2021). Most fair scheduling laws cover specific industries, such as retail or fast-food. They require covered employers to provide an initial estimate of a worker’s schedule upon hiring, advance notice of schedules, and compensation (predictability pay) for employer-initiated schedule changes with less than the requisite notice; workers also typically have the right to decline shifts that do not allow for a requisite period of rest, and the right to request a modified schedule.

In addition, because many workers in the relevant sectors seek additional work hours, fair workweek laws generally require employers to offer additional hours to existing employees before hiring new staff. Such laws also typically include provisions that prohibit employers from retaliating against workers for exercising rights under fair scheduling laws. Fair scheduling laws differ as to which employers are covered (typically limited by size and industry), notice and rest times, the level of predictability pay, and the like. San Francisco’s Family Friendly Workplace Ordinance specifically entitles workers to request a flexible or predictable schedule to assist with caregiving responsibilities, and requires employers to engage in an interactive process with the worker (San Francisco 2013).

Laws governing platform companies in the ‘gig’ economy

Almost all federal and state laws governing the workplace protect employees and not independent contractors. Platform companies in the so-called “gig” economy, in which workers are hired via apps, treat workers as independent contractors instead of as employees, thereby avoiding the obligations of an employer. This practice has led to considerable litigation, including lawsuits by the attorneys general of California and Massachusetts, alleging that such workers are misclassified (Gerstein 2020). Employer misclassification of workers as independent contractors is a longstanding, pervasive problem affecting millions of workers annually (Rhinehart et al. 2021).

New York City and Seattle have both passed ordinances creating various rights and protections for these workers, even as the cities have refrained from determinations about employee status. In 2018, New York City passed legislation34 empowering the relevant regulatory agency, the Taxi and Limousine Commission (TLC), to set minimum pay rates; accordingly, later that year, the TLC issued a rule (NYC TLC 2018) setting a minimum pay standard based on a study it had commissioned (Reich and Parrott 2020). In 2020, Seattle passed a similar ordinance (Seattle OLS 2020i) setting minimum pay for transportation network company drivers. New York City has also passed legislation35 allowing a city agency to set minimum payments for third-party (typically app-based) food delivery and courier providers. A comprehensive proposal to improve pay and transparency about working conditions for such workers was passed in 2022 by the Seattle City Council (Bull 2022, Taylor 2022a).

Seattle also passed a Transportation Network Company (TNC) Driver Deactivation Rights Ordinance (Seattle OLS 2021l), which grants drivers the right to challenge unwarranted deactivations before a neutral arbitrator, and creates a Driver Resolution Center to provide representation for drivers.36

Finally, in 2021, New York City passed a series of policies to protect delivery workers whose precarity was made clear during the COVID-19 pandemic (Figueroa et al. n.d.). An organization of bicycle delivery workers, Los Deliveristas Unidos, played a significant role in advocating for the new law (Los Deliveristas Unidos n.d.; City Staff 2021). The policies include a requirement that restaurants allow delivery workers to use their restrooms as long as they are picking up an order; minimum per-trip payments; transparency for customers and workers about tips (whether the tip goes to workers, in what form, and on what timeline); a prohibition on fees for receiving payment and a requirement that payments are made weekly, including at least one option that does not require a bank account; a prohibition on charging workers for insulated delivery bags; and permission for workers to limit their personal delivery zones (Sugar 2021).

Protections for freelancers or independent contractors

Minneapolis, New York City, and Seattle have passed laws to aid freelancers and independent contractors in securing timely payment for their work. Because such workers are not generally protected by employment law, they often face challenges in securing payment for their work, which is enforced by contract law and therefore typically requires securing legal counsel for any enforcement action (Yang et al. 2020). These local ordinances protecting freelancers require a written contract that includes certain written terms (e.g., pay rate and payment schedule) for a value greater than a minimum amount, require payment within 30 days of completion of the contract, offer protection against retaliation, and set up an administrative enforcement process. In 2022, the New York State legislature passed a state-level Freelance Isn’t Free Act based on New York City’s model (Maher 2022).

Protections against discrimination

Although the focus of this report is labor standards, not discrimination, it is worth noting that local governments have passed laws to expand protections from employment discrimination beyond what is protected under federal and state law. These local laws are typically enforced by local fair employment practices agencies (FEPAs), which are typically separate from agencies that enforce labor laws that regulate workers’ wages, hours, and benefits. For example, at least 330 local governments have passed nondiscrimination ordinances protecting workers from discrimination at work on the basis of sexual orientation, and at least 225 have done so to protect workers from discrimination on the basis of gender identity as well (MAP n.d.; HRC n.d.). Some local ordinances also protect workers from discrimination on the basis of marital or partnership status, family status, immigration status, status as a veteran, credit history, caregiver status, sexual and reproductive health decisions, salary history, weight and height, and status as a victim of domestic violence, stalking, or sex offenses (Vanderbilt 2012; Eidelson 2022; Brown 2002). In addition, federal employment discrimination protections only apply to employers with 15 or more workers, and local ordinances also often cover smaller workplaces (Clampitt n.d.). New York City in 2022 included domestic workers in the law prohibiting workplace discrimination (NYC CHR 2021). In addition, San Francisco in 2017 passed a law requiring employers to provide a reasonable break for a worker desiring to express breast milk for their child and to provide a space for lactation, other than a bathroom, that is shielded from view and intrusion (San Francisco 2017).

Several types of local anti-discrimination laws are described in more detail below.

Fair chance hiring

At least 22 local governments have passed laws requiring private and public employers to consider a candidate’s job qualifications before inquiring about a candidate’s criminal history—commonly referred to as “ban-the-box” or “fair chance” policies (Avery and Lu 2021). They may also prohibit consideration of certain types of past offenses, or require hiring entities to consider evidence of an applicant’s rehabilitation. Even more cities and counties have adopted fair chance hiring for their vendors’ or their own hiring. Fair chance policies vary as to the size of covered employers, when a background check is permitted in the job application and interview process, penalties, and enforcement.

Salary history bans

At least 20 local governments have passed laws prohibiting employers from inquiring about a job applicant’s salary history during the hiring process (HR Dive 2022; AAUW 2022).37 These ordinances seek to remedy systemic pay discrimination against women and people of color by allowing applicants to negotiate a salary based on their qualifications and earning potential, rather than being measured by their previous salary. Some local ordinances apply to private employers operating in the jurisdiction, whereas others apply only to local government hiring processes.

Pay transparency law

In January 2022, New York City became the first city38 to enact a pay transparency law,39 which requires employers to list a minimum and maximum salary for positions located in the city. This type of pay transparency law helps curb pay inequities. The law amends the New York City Human Rights Law (NYCHRL), the city’s ordinance that protects against employment discrimination, and makes any failure to post salary ranges an “unlawful discriminatory practice.” Ithaca, New York also passed a similar pay transparency law in May 2022 that applies to any employer with more than three permanent workers based in Ithaca (Zerez 2022).

Crown Act

Twenty eight municipalities, including New York City, have passed laws prohibiting discrimination based on a worker’s hairstyle or hair texture (NYC CHR 2019). Often known as the Crown Act (NAACP LDEF n.d.), these laws aim to address the impact of natural hair-based discrimination Black workers face in the workplace.

Protections against wrongful termination

Throughout the United States, almost all states have what is known as at-will employment; employers may terminate workers for reasons unrelated to job performance, as long as they are not discriminatory, retaliatory, or otherwise violative of the law. Just cause protections prevent employers from legally firing workers without warning or explanation (Tung, Sonn, and Odessky 2021). Such laws promote economic security and stability for workers and their families; they also protect workers from retaliation for raising concerns about violations of workplace laws.

Both Philadelphia and New York City have adopted ordinances that prohibit employers in certain industries from arbitrarily terminating employees. In Philadelphia, parking workers may only be terminated for just cause (which requires progressive discipline) or a bona fide economic reason (Philadelphia DOL 2021). New York City passed similar legislation applicable to fast-food workers (NYC OM 2021e).40 That legislation was recently upheld in the face of a legal challenge.41

In addition, in the wake of Hurricane Irma in 2017, the Miami-Dade Board of County Commissioners passed an ordinance (Miami-Dade Cty. 2018) prohibiting employers from retaliating or threatening to retaliate against nonessential employees for complying with county evacuation or other county executive orders during a declared state of local emergency.

Worker retention laws

Some localities have passed laws to protect workers’ employment when services are contracted out or when a contract changes hands (see Weil 2014, Weil n.d. on the “fissured workplace”). At least four cities (Hoboken, Newark, New York City, and Philadelphia) have passed laws that generally require successor contractors that operate in those cities to retain employees for at least 90 days, provide written offers of employment, retain employees by seniority, and maintain a preferential hiring list of employees not retained (Keon 2021; Kiefer 2022; Hoboken n.d.b., Jackson Lewis P.C. 2016). These laws differ in the categories of workers that are covered; Philadelphia’s ordinance provides the broadest coverage including security, janitorial, building maintenance, food and beverage, hotel service, and health care services workers (Keon and Sopher 2021). Unlike the policies addressing contractors discussed in Section 8, these ordinances apply to all contractors and subcontractors, not only those contracting with the relevant local government.

Industry-specific protections

Workers in certain industries may be subject to specific harms or be especially vulnerable to violations of the law. As a result, some local governments have passed laws specifically protecting workers in those industries.

Domestic workers

Chicago, Philadelphia, and Seattle have passed laws to provide domestic workers’ rights. In Seattle and Philadelphia, domestic worker bills of rights seek to ensure healthy working hours, sufficient earnings, and protections from sexual harassment and other exploitation. There are 2.2 million domestic workers in the United States—these housekeepers, child care workers, and home care workers are overwhelmingly (91.5%) women and are likely to be people of color, born outside of the United States, and older than other workers (Wolfe et al. 2020). Domestic workers are three times as likely to be living in poverty as other workers, and often are not protected by federal and state labor laws (Wolfe et al. 2020).42 Bill of rights ordinances typically provide domestic workers with meal and rest breaks, paid time off, and protections from sexual harassment and discrimination. Seattle’s law also created a Domestic Workers Standards Board, which provides a forum for employers, domestic workers, worker organizations, and the public to consider, analyze, and make recommendations to the city on other possible legal protections and standards for domestic workers (Seattle OLS 2018a). Chicago and Philadelphia have laws that provide domestic workers with the right to a written contract in English, as well as the language preferred by the worker (Chicago Dept. BACP 2021b; Philadelphia 2021b; Esposito 2021).

Hotel workers

At least seven cities have passed laws requiring hotels to equip workers with panic buttons, GPS-enabled devices that alert security when activated, and other protections (Hotel Tech Report 2022; Oakland OCA 2019). Entering a hotel room occupied by a visitor often places workers at risk of sexual harassment and assault, and data show that women in the hospitality and restaurant industries have the highest rates of sexual harassment on the job (Campbell 2019). In addition to requiring panic buttons, local ordinances typically require notice in each hotel room indicating that workers are equipped with panic buttons, and, in some cases, require hotel employers to develop and comply with a sexual harassment policy, take safeguarding steps after receiving an allegation of harassment, and prohibit retaliation for reporting sexual harassment or assault (UNITE HERE Local 1 2022; West Hollywood CC 2021). At least five cities have also passed laws regulating workloads, including regulation of hours and amount of work denoted in maximum square footage cleaned in a day (Stokes and Sarchet 2018; Santa Monica 2019; Sarchet 2021; Wagner 2020; Seattle OLS 2020f; Emeryville 2022). A few localities require additional payments from employers to increase health care access, and preferential hiring to retain workers when hotel ownership changes (Wagner 2020; Sarchet 2021; Santa Monica 2019).

Fast-food workers

New York City in 2017 passed a law, which is no longer in effect, requiring fast-food employers, upon authorization by an employee, to deduct voluntary contributions from workers’ paychecks and remit them to a nonprofit organization (not a labor union) designated by the employee (NYC n.d.c).43 The voluntary contributions were intended to enable and facilitate such workers having support and assistance from an organization advocating on their behalf, addressing work-related issues and other matters affecting working people.

Grocery workers

Los Angeles, New York City, and San Francisco have grocery worker retention policies that require new grocery store owners to retain employees of the previous owner for a 90-day transitional period after a change in ownership of the grocery store (NYC OLPS n.d.a; PWF n.d.e).44 The ordinances also establish a review process through which workers will be considered for continued employment.

Car wash workers

New York City’s car wash accountability law requires car washes to obtain a license to operate (NYC DCWP n.d.a). In addition to a license application, car washes must provide proof of workers’ compensation insurance, proof of disability benefits insurance, proof of commercial general liability insurance, and proof of unemployment insurance. Notably, car washes must also post a surety bond (also known as a wage bond) to cover potential wage claims as a condition of doing business.

Adult entertainment workers

Minneapolis in 2019 passed an ordinance requiring adult businesses to give workers copies of their contracts, post rules for customer conduct and workers’ rights, and prohibit retaliation against workers who report violations (Otárola 2019). Under the law, managers and owners are also prohibited from taking tips from workers, and workers will be provided security escorts when leaving after a shift. The ordinance also requires businesses to follow standard cleaning procedures, clear tripping hazards, and install security cameras to monitor all areas where entertainers interact with customers.

Wage standards and other requirements for local contractors or license/permit holders

Many localities have placed requirements on their contractors, including prevailing wage laws, living wage laws, and responsible bidder rules. In addition, some localities have created requirements for license or permit holders, in relation to compliance with labor laws or disclosure of past violations. Section 7 contains a detailed discussion of local laws affecting government contractors, and those affecting license and permit applicants and holders.

Higher labor standards for airport workers

Airports throughout the country are owned and operated by public entities—local and state governments, and regional entities composed of such governments (NASEM 2017).45 These public entities have required minimum wages for contractors and vendors at airports as a condition of being permitted to operate there. Many airport workers are low-paid; research has shown declining or stagnant wages, and poor working conditions (Sainato 2018; Editorial Board NYT 2018; Houston n.d.; Dietz, Hall, and Jacobs 2013). The Service Employees International Union (SEIU) has catalyzed airport-driven wage increases as a way to improve the working conditions of poorly paid janitorial, catering, food service, and other workers in airport facilities.

In places where local governments have authority to regulate the airport, many localities have exercised this authority to require all airport contractors to pay a higher minimum wage than the wage broadly required within the surrounding jurisdiction. Counties that have taken such action include Broward County (Fort Lauderdale, Florida) and Miami-Dade County, Florida (Miami-Dade Cty. n.d.a, n.d.b; Broward 2021). Cities taking similar action include Chicago, Denver, Houston, Los Angeles, Oakland, Philadelphia, Portland, Oregon, St. Louis, San Francisco, and San Jose, California (Spielman 2022; SEIU 2019; Houston n.d.; LAWA n.d.; Philadelphia CC 2021b; Holton 2021; Philadelphia CC 2021a; Port of Portland 2020; Port of Oakland 2001, 2021; STL Air Portal n.d.; SF OLSE n.d.d; Aitken 2021). In some instances, additional labor standards are required of airport contractors; for example, San Francisco also applied its health care ordinance to airport workers (San Francisco 2020), and the city of Los Angeles includes a worker retention provision (LAWA n.d.).

Some localities like Miami-Dade County, Philadelphia, and San Francisco, require certain contractors operating at the airport to enter into labor peace agreements with labor unions (LAWA n.d.).46 A labor peace agreement generally requires the employer and union to waive certain rights under federal law with respect to union organizing (for example, neutrality and nonopposition to the union on the employer side and a promise not to strike, picket, or disrupt the employer’s operations on the union side) to ensure uninterrupted workflow or, in the case of government, uninterrupted delivery of public services. In addition, the city of SeaTac, Washington, does not contain Seattle’s airport, but largely surrounds the airport; it passed an ordinance setting minimum employment standards for hospitality and transportation industry employers that requires higher wages for hotels and other businesses in the airport’s immediate vicinity (SeaTac n.d.).

Protecting workers and public health during the COVID-19 pandemic

Local governments have played a crucial role in protecting public health and worker safety during the COVID-19 pandemic. Especially given the failure of the federal government to take actions to protect worker safety in the beginning of the pandemic—and then subsequent action by the U.S. Supreme Court preventing the federal government from implementing a vaccine-or-test standard for workplaces—local and state governments have had to take emergency action to protect workers and public health (Rosenberg 2021; Totenberg 2022). Given that COVID-19 spreads through airborne transmission of respiratory droplets from infected people, protecting workers from contracting and spreading COVID-19 also plays an important role in protecting overall community public health and safety. Moreover, because of racial health disparities and the overrepresentation of people of color as essential workers, Black and Latino workers have been and remain at higher risk of contracting and developing serious complications from COVID-19 (UIC SPH 2021).

Local governments have used myriad authorities and programs to address the challenges facing workers during the pandemic, including emergency authorities often pegged to the duration of a local public health emergency order.47 Local governments—most typically by mayoral executive order—have used these emergency authorities to issue stay-at-home orders, as well as masking, testing, quarantine, and vaccination requirements (Foster n.d.; Kim and Romero 2021). For example, in December 2021, New York City’s mayor issued an order requiring all workers who perform in-person work or who interact with the public to be vaccinated (NYC DOH n.d.). These orders were typically enforced by local public health departments which, in some places, have taken complaints from workers and taken enforcement actions to stop workplace spread. Although these local public health measures are not always tied to the workplace, they are crucial to worker health and safety by ensuring that workers can stay home when necessary and reducing the likelihood of unmasked interactions.

In addition to the specific policies and programs intended to protect workers and public health during the pandemic outlined below, local governments also have established worker boards to hear from workers affected by the pandemic;48 mounted public education campaigns to inform workers, employers, and patrons about COVID safety at work (SAW LA n.d.); provided personal protective equipment (PPE) to employers for distribution to workers (St. Louis 2020); and set up funds for undocumented workers who were excluded from unemployment insurance and other federal funding (MF Phila. n.d.).

Paid sick leave: Modifications, enforcement, and emergency policies

As discussed above, 19 local governments have permanent paid sick leave laws. At least 16 local governments have made clear that paid sick leave may be used when their workplace or their child’s school or child care facility is closed due to a public health emergency (A Better Balance 2020, 2022b).49 Philadelphia, San Francisco, and Seattle temporarily limited employers from requiring a doctor’s note for employees to take sick leave (Philadelphia OMD 2020; SF OLSE 2020; Seattle OLS 2020g).

In addition to clarification and enforcement of permanent paid sick leave policies, local governments have also enacted emergency paid sick leave policies to supplement or extend federal emergency protections.50 For a period, the federal Families First Coronavirus Response Act required employers with fewer than 500 employees to provide workers with paid sick leave or expanded family and medical leave for reasons related to COVID-19, including the need to quarantine, care for an individual in quarantine, or care for a child whose care or schooling has been disrupted by the pandemic. Several local governments have passed paid sick leave legislation that supplements federal protections, for example by applying to employers with more than 500 workers, adding eligibility by permitting workers to take paid leave because they are older than 65 or are particularly vulnerable to COVID-19, and expressly permitting workers to take leave for vaccination-related illness (A Better Balance 2020). Local governments like Burlington, Vermont; Flemington, New Jersey; Shelby County, Tennessee; and Wilmington, North Carolina, enacted such emergency paid sick leave policies for their local government employees (A Better Balance 2020). Philadelphia51 and Seattle52 have passed emergency paid sick leave policies that extend to food delivery and transportation gig workers. Los Angeles County passed legislation requiring employers to provide additional paid leave for vaccination and recovery for workers who had exhausted their paid leave (LA County LED 2021).

Protection against retaliation in connection with workplace safety

Los Angeles County and Philadelphia passed ordinances prohibiting employer retaliation against workers in connection with workplace safety and compliance with COVID-19 public health orders. Los Angeles County’s law prohibits any adverse action by an employer against a worker for blowing the whistle on noncompliance with public health orders; discussing any perceived noncompliance with the county, other employees, or members of a public health council; belonging to a public health council; or informing employees of their rights under this ordinance (LA LED 2020; LA County n.d.). Notably, Los Angeles County’s law does not sunset. Philadelphia’s law53 prohibits employers from taking any adverse action against a worker for refusing to work in unsafe conditions if the worker reasonably believes the employer is operating in violation of a public health order and has notified the employer. An anti-retaliation law passed in Chicago (Chicago Dept. BACP 2022) protects against retaliation in relation to compliance with COVID-19 public health orders.

Hazard and premium pay

More than two dozen local governments in California and in the Seattle metropolitan area passed laws mandating hourly hazard pay bonuses of typically $4 or $5 per hour for grocery store workers (Egan et al. 2021; King 5 Staff 2021). Some laws also cover drugstore employers and vary as to the size of the employer covered (Kinder and Stateler 2021). Seattle also passed an ordinance providing food delivery gig workers premium pay on a per pick-up and drop-off basis (Seattle OLS 2020c).

Right to recall

At least 18 cities (Fair Hotel 2021) have passed laws—commonly referred to as “right to recall” or “right to return” laws—to protect workers in certain affected industries that were laid off during the pandemic. In particular, the leisure and hospitality sector accounts for 39% of total jobs lost due to the pandemic, which disproportionately affected workers of color (Huang 2021). These laws require employers to offer positions that become available first to qualified laid-off workers, typically in order of seniority. The laws vary as to which employers are covered (hospitality, event centers, commercial real estate), and whether laid-off workers can become qualified for the position with the same training that would be provided to a new employee hired into that position, enforcement, and notice. Detroit also passed a resolution in support of the right of recall, but is preempted by the state of Michigan from enacting an ordinance to that effect (DeVito 2021). Five cities have also applied this right to recall to changes in ownership of the employer (Fair Hotel 2021).

Severance

Shortly after emergency federal unemployment insurance relief in response to the COVID-19 pandemic expired, New York City passed a severance law requiring hotels with at least 100 rooms to pay a weekly severance of $500 per employee per week to laid off-employees for up to 30 weeks until the hotel has recalled 25% or more of its employees or reopened to the public (Moss 2022).

Vaccination

In addition to providing emergency paid sick leave for vaccination and recovery, local governments also have partnered with worker organizations to promote vaccination. Philadelphia partnered with the National Domestic Workers Alliance to transport workers to vaccine sites, where city officials addressed concerns by providing information about paid sick leave laws. Houston partnered with SEIU to deliver vaccines to janitors (Gerstein and Salas 2021).

Discrimination

San Francisco ​​enacted an ordinance prohibiting employers from discrimination based on exposure to or having tested positive for COVID-19 (SF OLSE n.d.b). Employers are prohibited from taking any adverse action (i.e., firing, threatening to fire, suspending, disciplining, rescinding an offer) against a worker because the worker tested positive for COVID-19 or is isolating or quarantining due to COVID-19 symptoms or exposure.

Federal and state preemption should be considered but still permit considerable action on workers’ rights matters

Preemption occurs when a higher level of government (for example, the federal or state government) restricts or withdraws the authority of a lower level of government (such as a city council) to act on a particular issue. While a detailed discussion of preemption is beyond the scope of this report, it is important for local governments to consider potential preemption by federal or state law.

Federal preemption

An analysis of federal preemption starts with the question of congressional intent: Did Congress intend to displace state or local law? Federal preemption limits some possibility for local action on workers’ rights, but still leaves significant room for legislation, enforcement, contracting consequences, and other local innovation. Some relevant federal laws and points to consider are as follows:

• The National Labor Relations Act (NLRA) guarantees and regulates the right of private-sector workers to organize into unions, bargain collectively, and take collective action to improve their working conditions. NLRA preemption is quite broad, and for workers covered by the NLRA, local and state governments are preempted from regulating workers’ rights to form and join labor unions or to bargain collectively with their employers, employer speech about unionization, and bargaining rules and obligations (Sachs 2011). Notable exceptions are when a state exercises traditional police powers; also when a state or local government acts as a “market participant,” it enjoys the same freedom to structure its labor policies as a private party and is not limited by NLRA preemption. Thus, local governments can require contracts to honor prehire agreements, for example.57 Moreover, local governments are free to enact labor laws that otherwise would be preempted by the NLRA for workers who are not covered by the law (i.e., farmworkers and domestic workers).
• The Occupational Safety and Health Act (OSH Act) regulates workplace safety nationally. It only preempts local and state action when there is a standard set by the Occupational Safety and Health Administration (OSHA) addressing a particular and specific workplace hazard (Flanagan, Gerstein, and Smith 2020). However, even if there is an OSHA standard, a local law, regulation, order, or government action will not be preempted if it protects the general public; to wit, laws of “general applicability (such as laws regarding traffic safety or fire safety) that do not conflict with OSHA standards and that regulate the conduct of workers and non-workers alike would generally not be pre-empted.”58 For example, a New York City building code provision regulating cranes was found not to be preempted because it protected not only workers, but also the “safety of the general public in the vicinity.”59 In addition, 21 states and Puerto Rico have become OSHA-approved “state plans” (USDOL OSHA n.d.) that regulate private-sector workplace safety and health themselves; they are subject to OSHA oversight and their provisions must be as protective of workers as OSHA standards and regulations (USDOL OSHA n.d.).60 In such states, federal OSHA preemption would not apply.
• There is no preemption of local standards that are more protective of workers under the Fair Labor Standards Act (FLSA), which sets the floor for minimum wage, overtime pay, record-keeping, and youth employment standards nationwide.61 In other words, the FLSA does not preempt higher minimum wages at the state and local levels.
• As a general matter, exercise of traditional police powers (civil or criminal) does not lead to preemption concerns. Longstanding principle in preemption cases requires courts to “start with the assumption that the historic police powers of the states are not to be superseded…unless that was the clear and manifest purpose of Congress.”62 For example, criminal prosecutions of employers, or civil tort lawsuits, for conduct that would also give rise to occupational safety and health violations generally would not be preempted (Flanagan, Gerstein, and Smith 2020).

State preemption

Local policymaking to advance and expand and protect workers’ rights, as well as other progressive causes, is substantially hindered by the emergence of state preemption used in a punitive manner (Briffault 2018).63 In particular, conservative state legislatures have increasingly preempted local efforts to increase the minimum wage, guarantee paid sick leave, require fair scheduling, regulate gig employers, and set prevailing wages for municipal contracts (Wolfe et al. 2021). For example, at least 26 states have passed preemption laws to prohibit local governments from setting minimum wages higher than the state minimum wage (EPI 2019). The preemption of local policies to support workers’ rights is most common in the South and Midwest, where these laws are part of a long history of efforts to limit the rights and freedoms of Black people (Blair et al. 2020; Wolfe et al. 2021). Even a progressive state like Washington recently moved in this problematic direction when the state legislature passed a bill on transportation network companies (like Uber and Lyft) that preempts any local regulation of the industry.64

An encouraging development in this area occurred in Colorado, when the state in 2019 reversed its prior preemption of local labor standards, providing cities and worker advocates in other states with potential lessons in how to do the same elsewhere (Huizar 2019a).

Even in the face of state and local preemption, there are still opportunities for localities and local government leaders to take action to protect workers: passing legislation that is not preempted; setting high standards in relation to local government employees; conducting extensive know-your-rights outreach and public education about workers’ rights; supporting pro-worker state legislation; conducting research and issuing reports on worker issues; documenting the extent of labor violations; promoting labor compliance by local government contractors, permit-holders, and licensees; and advocating for an end to state-level preemption. In addition, the Local Solutions Support Center and National Employment Law Project have created resources to assist localities in making assessments regarding preemption of desired action (Huizar 2021; LSSC 2020a, 2020b).

Enforcing local worker protection laws

This section provides examples of the enforcement cases brought by local labor agencies in recent years. However, it is important to note that the case descriptions are just a sampling of enforcement work performed at the city level, based on publicly available media coverage and press announcements. Only a few city agencies routinely issue news releases or disclose employer information about their investigations. More could recognize news releases as a tool in their worker protection toolkit, given the documented impact (Johnson 2020) of deterring employer violations by issuing press releases in workplace enforcement.

Some office websites include dashboards, posted annual reports, or other compilations of enforcement work, which should be consulted in conjunction with the below case descriptions, in order to obtain a fuller picture of the work being done. For example, Denver Labor, a division of the Denver Auditor’s office created in 2019, posts restitution stories (Denver n.d.b) on its website, summarizing the office’s enforcement work, including industry of employers, type of work, amount of money recovered, and the number of workers involved, although it does not mention specific employer names. The Seattle Office of Labor Standards has a Resolved Investigations (Seattle OLS n.d.e) section of its website, with detailed information about closed cases, and in 2021 released a press announcement (Seattle OLS 2021h) commemorating the office’s six-year anniversary and detailing accomplishments in that time. In addition, a number of offices post annual or periodic reports that include information not only about enforcement actions, but also about legal developments, outreach and public education activities, regulations issued, and more. (See Section 9 for more detail).

In addition to dedicated labor standards offices, it should be noted that city and county attorneys, who represent local government entities in legal proceedings, have sometimes enforced local worker protection laws. Some city and county attorneys have criminal authority to prosecute misdemeanors, but they typically bring and defend civil suits on behalf of local governments. Many city and county attorneys have the authority to enforce local ordinances to protect workers, although such enforcement is uncommon in many jurisdictions. In some states, they also have the authority to enforce select state laws,65 and they also can bring impact litigation on behalf of local governments (Justice Catalyst et al. 2019). In some cases, city or county attorneys have enforced workplace laws, either independently or in conjunction with municipal labor standards offices or other government entities.66 District attorneys, and in some places county or state’s attorneys, are responsible for criminal enforcement, and are increasingly using those powers to prosecute employer crimes involving serious violations of workers’ rights. In some jurisdictions, they have authority to bring civil cases as well.67 Criminal prosecutors have also been increasingly active in bringing charges against employers to protect workers’ rights (Gerstein 2021). In addition, some local auditors and controllers also enforce workplace laws. For example, in New York City, the comptroller plays a significant role in enforcing prevailing wage and other laws within the city (NYC Comptroller n.d.), and the city controller also enforces Pittsburgh’s prevailing wage ordinance (Pittsburgh 2010). Local departments or agencies that focus on contract enforcement may also enforce worker protections and standards in local governments contracts (LA City BCA n.d.). While enforcement action by these various officials is noteworthy, the cases outlined below generally include those brought by local labor standards agencies.

Examples of enforcement

In the compilation of cases below, where the same employer has committed multiple violations of law, to avoid duplication, cases are listed in one category only.

Paid sick leave

Enforcing paid sick leave laws has been a significant focus for many local agencies, particularly since these laws often exist only at the local level. New York and Seattle have been particularly active in this area. Agencies have obtained restitution for workers, as well as reinstatement in some cases. In some instances, settlements have also included crediting workers with additional paid sick leave in the future. New York City required Starbucks to educate the public about paid sick leave laws through posters in public areas, and Minneapolis required a home health agency to train all managers and staff on the relevant law.

New York City’s Department of Consumer and Worker Protection has enforced paid sick leave laws in multiple industries, with noteworthy cases involving fast-food, home care, and airline industry workers.

• The department conducted multiple investigations of paid sick leave violations involving home health agencies, including a 2021 collaborative case with the New York state attorney general’s office resulting in the recovery of up to $18 million for 12,000 home health aides at two agencies that underpaid workers and did not provide paid sick leave. In 2022, the department also reached settlements involving two domestic workers who had been denied paid sick leave (NYC DCA 2018a; NYC OM 2020a, 2021c; NYC DCWP 2022).
• Fast-food industry cases include a $155,000 settlement with a McDonald’s franchisee in 2019 (also involving fair workweek violations); an ongoing case against Chipotle, in the midst of which the city obtained reinstatement for a worker who had been unlawfully terminated; and a 2019 settlement with Starbucks, jointly with the New York state attorney general’s office, in which the company agreed to create a $150,000 restitution fund for employees whose rights had been violated, and to promote public education about the paid sick and safe leave law by requiring Starbucks to post an educational poster about paid sick leave in public locations in all New York City stores (NYC OM 2019b, 2020c NYC OM 2019c).
• The department in 2019 sued American Airlines for violating the paid sick and safe leave law by assigning disciplinary points and thereby illegally retaliating against workers for taking leave. American Airlines later sued New York City challenging the law. The case was ultimately settled in 2021; the airline agreed to pay workers restitution and to comply with the law going forward. The department in 2021 also settled a case involving a Southwest Airlines ground crew worker who was illegally fired for using sick leave; the resolution required reinstatement and payment of restitution. And in 2020, the department settled a case with an American Airlines contractor that staffed wheelchair attendants, customer service representatives, baggage handlers, and cargo agents; the contractor was required to pay more than $100,000 in restitution, and also to credit workers with additional prospective paid sick leave (NYC DCWP 2019b, NYC OM 2021b, 2021d, 2020b).
• In one case involving a law firm that violated the paid sick leave laws, the department obtained a hearing officer decision requiring payment of $172,000 to the worker (NYC DCWP 2019a).
• The Department of Consumer and Worker Protection settled two cases involving domestic workers who were denied paid sick leave (one was fired for using sick leave and for filing a complaint, ultimately losing their housing as a result) (NYC DCWP 2022).
• New York City’s law also requires paid safe leave to be used by those experiencing domestic violence, human trafficking, stalking, or similar offenses; the office in 2020 obtained a $25,000 settlement in its first paid safe leave case (NYC DCWP 2020b).

The Seattle Office of Labor Standards in 2011 recovered (Seattle OLS 2021i) more than $290,000 from a cleaning company for paid sick leave and other violations, including not paying for all hours worked, paying subminimum wages, and making unauthorized deductions from workers’ pay for training and other costs. In 2021, Seattle’s Office of Labor Standards resolved a paid sick and safe leave (Seattle OLS 2021c) involving Compass, a multinational food service company with hundreds of thousands of employees worldwide.

The Labor Standards Enforcement Division of the Minneapolis Department of Civil Rights has brought a number of paid sick leave enforcement cases, including against the national sandwich shop Jimmy John’s (Mahamud 2021) and a local gas station (Minneapolis 2018), as well as a home care business (Du 2021). In that last settlement, the division required the employer to train managers and staff on the relevant law, and to credit all workers with 80 hours of sick leave.

Chicago’s Office of Labor Standards in 2021 reached (Chicago OM 2021) paid sick leave settlements (Channick 2021) with a Burger King franchisee, recovering more than $458,000 in restitution for workers plus $100,000 in city fines, and with global snack food company Mondelēz Global LLC, recovering $476,000 in restitution for workers plus $95,000 in fines.

Wage theft

Some city agencies have authority to enforce municipal minimum wage or other wage-related laws. Wage theft68 cases brought by city enforcement agencies include the following.

Seattle’s Office of Labor Standards has been a national leader in enforcement activities in this area. Cases include:

• a $2 million settlement with a Domino’s franchisee in 2022 based on the employer paying workers below the city’s minimum wage and failing to pay overtime when employees’ work at multiple locations led to workweeks in excess of 40 hours; the case also involved fair scheduling violations (Seattle OLS 2022a)
• a 2022 settlement for more than $250,000 with a national traffic control company that paid below the city’s minimum wage, among other things (Seattle OLS 2022b)
• a finding in 2021 that construction contractors and subcontractors were jointly and individually liable for $2 million in underpayment based on a host of violations, including unauthorized deductions from workers’ paychecks, subminimum wages, uncompensated work time, nonpayment of overtime, and failing to provide paid sick and safe time (Seattle OLS 2021g)
• a 2021 settlement for more than $290,000 with a cleaning company for minimum wage paid sick and safe time violations, and retaliating against workers (Seattle OLS 2021i)
• a 2019 settlement for $182,000 with two Hyatt hotels that were paying a lower minimum wage for small employers instead of the applicable higher wage, and a $686,000 settlement, also in 2019, with a staffing company based on similar violations; the office also reached a $120,000 settlement for underpaid home care providers (Seattle OLS 2019d, 2019c, 2019b)
• after finding wage theft and other violations by two painting contractors, the office provided trainings in 2018 to the industry trade association
• the office also recovered more than $40,000 on behalf of workers with disabilities after the city eliminated a previously existing subminimum wage for such workers
• in one 2018 case involving a restaurant that had retained workers’ tips and failed to provide paid sick time, the employer apologized to employees (Seattle OLS 2018c, 2018d, 2018b)

Other local enforcement actions include a 2018 settlement (Minneapolis 2018) for $20,000 with McDonald’s by the Labor Standards Enforcement Division of the Minneapolis Department of Civil Rights, and a 2021 lawsuit (Chicago Dept. BACP 2021c) by the city of Chicago against DoorDash that focused on other legal issues, but also contained allegations that the company illegally retained workers’ tips.

In addition, Denver Labor reported (Denver OA 2021a) multiple successful enforcement actions in 2021 involving cases under the city’s minimum wage law, contractor minimum wage law, and prevailing wage law. Minimum wage cases included investigations involving a local restaurant, home improvement sales workers, a national retailer, a janitorial company, a fast-food chain, and a hair salon; sample prevailing wage cases involved a custodial contractor at the Denver Zoo, a crane contractor on a federal prevailing wage project, and solar power contractors at Denver International Airport.

COVID-19 pandemic-related enforcement

Seattle’s Office of Labor Standards has brought several actions enforcing the city’s gig worker paid sick and safe time law passed in June 2020. These enforcement actions have resulted in a $3.4 million settlement with Uber (Seattle OLS 2021d), a nearly $1 million settlement (Seattle OLS 2021e) with Postmates, and a $160,000 settlement (Seattle OLS 2021f) with DoorDash, all in 2021. In addition, the office recovered (Seattle OLS 2021j) more than $330,000 for 101 wine and alcohol shop workers who did not receive hazard pay as required by city law, as well as more than $100,000 (Seattle OLS n.d.g) for workers for the gig delivery company Go Puff. Los Angeles County also took enforcement (LA County CBA 2021b) actions against a number of employers based on pandemic-specific workplace protections, including a grocery store that failed to pay “hero pay” (also known as premium pay during the pandemic), and a construction company that terminated a worker for requesting indoor use of face coverings. Pursuant to New York City’s Grocery Worker Retention Act, the city’s Department of Consumer and Worker Protection filed a case (NYC DCWP 2020c) against a Bronx supermarket in 2020 and resolved it several months later (NYC DCWP 2021a) with payment of restitution and reinstatement of most of the discharged workers.

Protections for gig workers and freelancers

The broader issue of classification of workers for app-based driving and delivery companies generally has been playing out at the federal and state, and not local, level. The issue has emerged, for example, in relation to state laws on wages, workers’ compensation, and unemployment insurance (NELP 2019).69 However, there have been some instances of localities challenging misclassification of such workers as independent contractors rather than as employees. In other cases, several cities have created municipal-level wage, paid sick leave, or other protections that apply broadly, including for so-called gig workers, and have taken action to enforce those municipal laws in relation to app-based companies.

In addition to the COVID-19-related cases brought by Seattle described above, other cases include a civil lawsuit (SF ODA 2021) against the cleaning company Handy filed in 2021 by the district attorneys of Los Angeles and San Francisco, as well as a 2021 letter inquiry (Fox, Marchese, and Shimko 2021) regarding Handy’s potential misclassification, sent by the Seattle and Chicago Offices of Labor Standards and the Philadelphia Office of Worker Protections. Also, in 2021, the San Francisco city attorney, San Francisco Office of Labor Standards and Enforcement (OLSE) and a city supervisor announced (SF OCA 2021) a $5.3 million settlement with DoorDash, the largest in the OLSE’s history, after an investigation into allegations of violations of San Francisco’s paid sick leave law and a separate health care security ordinance (SF OLSE 2022), which creates an employer spending requirement to fund health care benefits (health insurance, dental, or vision coverage) for employees in the city. In 2020, OLSE reached a settlement of nearly $750,000 with grocery delivery company Instacart (Said 2020).

In addition, New York City agencies have taken action to enforce the city’s Freelance Isn’t Free Act (NYC DCWP n.d.e), which gives freelance workers (NYC DCA 2018c) the legal right to written contracts, timely payment, and freedom from retaliation. In late 2021, the New York City Law Department and Department of Consumer and Worker Protection announced (NYC OM 2021f) a lawsuit (NY Supreme Court 2021) against French global fashion media company L’Officiel, based on a pattern of failing to pay freelancers on time or at all, including writers, editors, photographers, videographers, graphic designers, and illustrators. According to DCWP, the agency has received 2,024 complaints from freelancers since the law’s inception in 2017, and has helped freelancers recover more than $2.1 million in owed compensation for their work.

Fair scheduling laws

Several cities have fair scheduling or fair workweek laws, which require employers in certain industries (usually retail and/or fast-food) to provide workers with their schedules with advance notice. These laws ensure that workers can plan for child care, elder care, education, second jobs, and other responsibilities, without having the insecurity of unstable and unpredictable schedules. In some cases, fair workweek laws also require employers to offer current part-time workers additional hours before hiring new employees, thereby increasing opportunities for full-time employment.

Seattle’s Office of Labor Standards has resolved a number of investigations under its secure scheduling ordinance, including recovery (Seattle OLS n.d.f) in 2020 of nearly $2 million from Macy’s in a case involving more than 800 workers, and recovery (Seattle OLS 2020a) that same year of more than $600,000 from Fred Meyer’s supermarkets in a case involving approximately 750 workers. In 2019, Seattle resolved a secure scheduling case (Seattle OLS 2019a) involving two franchises operating nine Jack in the Box locations and employing more than 500 workers.

New York City’s fair workweek law applies only to fast-food employers, and the Department of Consumer and Worker Protection has brought a number of actions. Most notably, in 2021, the department sued (Scheiber 2021) fast-food chain Chipotle for extensive and ongoing violations at several dozen stores, alleging that workers are owed $150 million as a result. The 2021 filing followed a prior case (NYC OM 2019a) in 2019. New York City also enforced its fair workweek law in cases involving McDonald’s and Pizza Hut (NYC OM 2021a) locations, the owner of 30 KFC stores (NYC DCA 2018b), and multiple other fast-food employers (NYC DCWP 2020a).

Philadelphia’s fair workweek law covers service, retail, and hospitality workers. A 2021 case involved the resolution (Reyes 2021a) of allegations of violations by a local Target.

Additional cases: Just cause termination rights, health care, and consumer protection

In addition to the broad categories described above, offices also have brought cases under other laws to protect workers and consumers. For example, in 2021, the New York City Department of Consumer and Worker Protection announced (NYC DCWP 2021b) the resolution of its first investigation of a termination of two Subway workers in violation of a new city law (NYC OM 2021e) protecting fast-food workers from being fired without just cause or for a bona fide economic reason. And in a consumer-related case, the department settled charges against (NYC DCA 2017) a large New York City parking garage company that began charging monthly customers an additional “living wage fee” after an increase in the city’s minimum wage under state law. The San Francisco city attorney has worked with the Office of Labor Standards in bringing cases under the city’s health care security ordinance, including a 2019 lawsuit (SF OCA 2019) against a tour bus company, and recovery in 2014 of $1.34 million from a janitorial company (SF OCA 2014).

Funded strategic enforcement partnerships with worker organizations

Some local labor agencies have explicitly and formally included worker organizations in aspects of the labor law enforcement process, by contracting with community organizations to support community partnerships that conduct public education and outreach, and refer violations to the enforcement agencies. Such relationships are sometimes referred to, most commonly by worker advocates, as “co-enforcement.”

This model has long existed at the federal level: The Occupational Safety and Health Administration (OSHA)’s Susan Harwood Training Grant Program since 1978 has awarded grants to nongovernmental entities, including worker organizations, “to provide training and education programs for employers and workers on the recognition, avoidance, and prevention of safety and health hazards in their workplaces and to inform workers of their rights and employers of their responsibilities” under the Occupational Safety and Health Act.

Several local agencies in more recent years have created similar formal, funded partnerships with worker organizations, including unions, worker centers, and community-based organizations. Some of these organizations played a role in advocating for what is now the longest-standing local program of this type, in San Francisco (Patel and Fisk 2017). The city was a forerunner in creating its community partners program was established under a 2006 amendment to the city’s minimum wage law, requiring the Office of Labor Standards Enforcement to create a community-based education and outreach program focused on workers in particular industries (San Francisco 2011).

The Office of Labor Standards in Seattle has a Community Outreach and Education Fund that grants money to community organizations focused on workers who experience high rates of workplace violations, including women, workers of color, immigrants and refugee workers, LGBTQ workers, workers with disabilities, veterans, and youth workers. The most recent round of grants was announced (Seattle OLS 2021k) in December 2021; nearly $3 million in funding will be provided over two years to nine organizations that will provide outreach, education, and support to low-wage workers. The office also has a Business Outreach and Education Fund (Seattle OLS n.d.a), which provides assistance and outreach to small businesses owned by low-income and historically disenfranchised communities, in order to increase their compliance with city labor laws. For the two-year period starting in January 2021, the fund committed $1.1 million to five organizational grantees. In 2021, the office also granted $50,000 to an organization to provide outreach to domestic employers about their obligations.

In 2021, the Chicago Office of Labor Standards announced (Chicago Dept. BACP 2021a) a $100,000 grant, funded in part by the city and in part by the Chicago Foundation for Women, to the nonprofit Arise Chicago. The funding is for outreach and education on city labor laws, with additional activities focused on domestic workers: providing trilingual trainings in developing contracts, and offering template contracts in Spanish, Polish, and English, among other things.

A Minneapolis ordinance requires the development and implementation of “a multilingual and culturally specific outreach and community engagement program to educate employees and employers about their rights and obligations under this chapter…[with] media, trainings and materials accessible to the diversity of employees and employers in the city.”70 Accordingly, the Office of Labor Standards has devoted $300,000 annually to contracting with community organizations for these purposes. The Centro de Trabajadores Unidos en La Lucha (CTUL)(CTUL n.d.) is a grantee and also helps administer the contract; in 2021, CTUL subcontracted also to Awood (a worker center serving the East African community) (Awood n.d.) and the local chapter of Restaurant Opportunities Centers United (ROC-United n.d.; Walsh 2021).

Finally, the Santa Clara County Office of Labor Standards Enforcement also provides funding for education and outreach to community-based organizations providing services to workers and businesses in Santa Clara County (SC OLSE n.d.e, n.d.b, and n.d.a).

Localities have created labor standard requirements and consequences for their government contractors, and for applicants/holders of licenses and permits

A considerable number of businesses interact with localities not just as regulated entities, but also as government contractors or vendors, or as holders of local government-issued permits or licenses. These relationships present opportunities for localities to improve working conditions or drive compliance with worker protection laws. Local governments may have more ability or leverage to positively affect employer conduct in these situations, when businesses are actively seeking approval, funding,71 or a contract from the government.

In relation to contractors or vendors, localities may wish to ensure their contracting funds family-supporting employment, not low-road, underpaid, precarious jobs. They may wish to ensure contractors do not win contracts through a race to the bottom on working conditions. They may also be aware of the practical benefits of contracting with companies that employ highly skilled unionized workers, where turnover and job disruptions may be reduced and product quality may be higher. Or they may wish to ensure their contractors—even if they are not high-road employers—at the very least do not have a history of violating basic workplace and other laws. This report provides a general overview of some options, but localities wishing to achieve these goals should consult more comprehensive and informative resources on this topic (Walter and Madland 2015; Walter, Rowell, and Wall 2020; IIIFFC 2017).

Before approving license/permit applications or renewals, localities may wish to ensure that applicants and license/permit holders are financially responsible, and that they are at least in compliance with the basic applicable workplace statutes.

In relation to contracts, permits, and licenses, localities also may wish to have laws and operations in place to allow termination of such relationships in the event of established and unremedied violations.

Accordingly, localities have passed laws and taken other actions in relation to their contractors, as well as license and permit holders.

Localities have imposed requirements related to public projects or projects seeing public approvals

Localities have imposed prevailing wage and living wage requirements on contractors, passed responsible bidder ordinances, and used project labor and community benefits agreements

Prevailing wage

Prevailing wage laws require covered government contractors to pay a wage and benefit rate based on similarly employed workers in a given geographic region (ILEPI n.d.a; Mahalia 2008). Sometimes ordinances also will require payment of prevailing wages by entities like developers and owners that receive local subsidies or tax abatements. These laws can help make sure that public funds support good jobs, and that bidders do not win government contracts through race-to-the-bottom labor practices. The federal prevailing wage laws (the Davis-Bacon and Service Contract Acts) cover federally funded construction and service contracts. Roughly half of U.S. states (USDOL 2022a) have prevailing wage laws. A number of localities do as well; for example, New York City requires payment of prevailing wage on city-contracted construction projects, to service workers (such as security guards) working for city contractors, and to service workers in residential projects that receive more than $1 million in city financial assistance with 120 or more residential units (Wall, Walter, and Madland 2020; NYC DHPD n.d.). In early 2022, San Diego County passed the “Working Families Ordinance,” which requires contractors for construction projects on county land working on projects of more than $1 million to use skilled, trained workers and pay prevailing wages. It also requires employers on county-leased land to provide paid sick leave. (Brennan 2022). Local prevailing wage laws more commonly cover construction of “public works,” or public buildings, roads, and structures, but they also may be enacted to cover service contracts with the locality as well (Walter, Rowell, and Wall 2020). Studies have found that prevailing wage laws have an overall positive economic impact, and also that costs savings were not realized in jurisdictions where such laws were repealed (Manzo IV 2018). The Center for American Progress in 2020 published a how-to guide with information for states and localities wishing to enact or expand prevailing wage laws within their jurisdictions (Walter, Rowell, and Wall 2020).

Living wage

Living wage laws require employers who receive contracts, tax benefits, or government subsidies from a locality to pay their workers a higher-than-minimum wage (PWF n.d.d; Bernstein 2002). These policies are meant to cover the cost of living, and the wage rates are often calculated based on ensuring that a family would be raised to or above the poverty threshold. Living wage policies in some cases establish different wage levels for employers who provide health insurance and those who do not. A 2011 compilation by the National Employment Law Project (NELP 2011) reported there were more than 120 localities with living wage requirements at that time.

As an example, Boston’s living wage law, enacted in the late 1990s, has as its purpose “to assure that employees of vendors who contract with the City of Boston to provide services earn an hourly wage that is sufficient for a family of four (4) to live at or above the Federal poverty level. This Chapter is also designed to maximize access for low- and moderate-income Bostonians to the jobs that are created, maintained or subsidized through service contracts with the City of Boston.”73 It covers city vendors and beneficiaries of city financial assistance. The law defines financial assistance broadly (Boston n.d.a),74 and covers any employer with at least 25 employees who has been awarded a service contract or subcontract with the city (Boston n.d.a).75 The law contains employee notice and employer reporting requirements, and a mechanism for enforcement, with potential penalties and remedies including fines, restitution, suspension of ongoing contracts and subcontract payments, and ineligibility for future city contracts for three years or until all penalties and restitution have been fully paid (Boston n.d.b).76 Companies bidding or negotiating on a service contract must complete an affidavit regarding the living wage (Boston 2022) prior to the awarding of the contract.

A major shortcoming of Boston’s law is that its formula for calculating the living wage can result in a relatively low dollar amount (the 2022 living wage is $15.87 per hour (Boston OWD n.d.), compared with the state’s 2022 minimum wage (Massachusetts n.d.b) of $14.25.

By contrast, the County of Santa Clara for 2021–2022 has a living wage set at $25.31 per hour (SC OCE n.d.) for employers who do not provide health or retirement benefits; employers who provide such benefits may pay a lower rate ($23.31 per hour with either health or retirement benefits; $21.31 per hour with both). In addition, Santa Clara County’s living wage requires77 provision of up to 12 paid days off to be used either as paid sick leave for the worker or for that worker to care for a family member or designated person.

Some city living wage laws incorporate other kinds of requirements, such as worker retention policies (PWF n.d.e). Hoboken, New Jersey, recently enacted a living wage ordinance for building service workers that includes both a monetary wage component and paid leave requirements.78 The city also passed an ordinance requiring contractors or subcontractors with a service contract in the city to ensure that when there is a change in employer, the successor employer must retain building service workers for 90 days.79 In 2022, the Newark (New Jersey) City Council passed an ordinance (TAPinto Staff 2022) to protect subcontracted janitors, security officers, and door attendants from losing their jobs for 90 days when a contract changes hands through no fault of workers.

Responsible contractor requirements

Numerous local governments have passed laws requiring contractors bidding for public projects (above a certain value) to meet certain “responsible contractor” criteria (ILEPI n.d.b). A responsible bidder ordinance is a policy that sets minimal requirements for all contractors bidding on publicly funded projects in a given political jurisdiction.

Criteria may include, for example, previous compliance with worker protection laws (i.e., laws prohibiting wage theft, misclassification. etc.), appropriate insurance coverage (i.e., for workers’ compensation), participation in a registered apprenticeship training program, and appropriate professional licenses (ILEPI n.d.b). While such requirements are based in commonsense and noncontroversial approaches, they do diverge from the frequently taken approach of awarding contracts to the lowest bidder based solely on price alone (IIIFFC n.d.d).

The Indiana, Illinois, Iowa Foundation for Fair Contracting has developed a Responsible Bidder Toolkit (IIIFFC 2017) providing guidance to municipalities wishing to pass such measures; the organization also compiled a list of nearly 50 responsible contractor ordinances in municipalities within those three states (IIIFFC n.d.a, IIIFFC n.d.b; IIIFFC n.d.c). Other localities are considering such requirements. New Orleans, for example, passed (New Orleans MO 2021) a responsible contractor ordinance after the collapse of the Hard Rock Hotel, which was under construction; three workers died in the accident. New Orleans also specified that the primary contractor would be responsible for any subcontractor violations.

Seattle’s minimum wage ordinance contains a provision disallowing employers from bidding on city contracts if they are the subject of a final order and have not paid all money owed; if an employer has been the subject of a final order twice or more within five years, the contractor cannot bid on city contracts for two years.80 Most of the city’s other labor ordinances contain similar language.

San Diego’s municipal code requires city contractors, during the term of a contract, to “comply with all applicable local, state, and federal laws, including health and safety, labor and employment, and licensing laws, that affect the employees, the worksite or performance of the contract.”81

Minneapolis bars the city from contracting with entities included on a list of companies with outstanding violations of the city’s wage theft law (Minneapolis n.d.c). The city of Omaha, Nebraska, sets contractor rules for contracts greater than $500,000. These rules include a “bid incentive” for contractors to use apprenticeship training programs (allowing them to be competitive while submitting slightly higher bids), and also require proof of workers’ compensation insurance, proper classification of workers as employees, and disclosure of subcontractors; penalties for noncompliance include withholding by the city of any payments still owed to the contractor, as well as a year of being debarred from bidding on contracts if there are two violations (Omaha n.d.).

Toledo, Ohio, has a municipal code that requires payment of prevailing wages for contracts of $10,000 or more, and prohibits awards of such contracts to bidders who have been convicted or found liable under the city’s wage-related law in the previous two years. For construction projects of more than $100,000, city law sets criteria, including continuity and experience of the workforce, local hiring, whether there is an apprenticeship program, and whether the employer provides benefits (health insurance and retirement or pension plan), as well as the bidder’s record of compliance with tax, wage and hour, and unemployment laws (Toledo n.d.b).

Other cities that disqualify contractors with a history of wage theft and other labor standards violations from winning city contracts include Cincinnati (Hussein and Coolidge 2016); Columbus, Ohio (Columbus n.d.a, n.d.b); Coralville, Iowa (Zaluska 2021); El Paso, Texas; and Houston.

In 2021, New York City amended its law to include a requirement, currently being challenged in litigation, that human services contractors and subcontractors must agree to labor peace agreements as a condition to being able to win or renew a city service contract with city agencies. Among other things, they must file an attestation that the employer has entered into a labor peace agreement with a labor union, or that no union has sought to represent their workers, and if a union seeks to represent their employees during a contract, they must enter a labor peace agreement within a set period of time (NYC n.d.a).82

Local and targeted hiring policies

Local and targeting hiring programs require or incentivize businesses that receive public dollars to hire workers from the local community, or from targeted populations in the community. Local hiring creates hiring preferences for people who live in a specific geographic area, which can be as large as an entire city or county, or as small as specific zip codes or neighborhoods. Targeted hiring refers to hiring preferences based on a range of worker characteristics, such as veteran status, gender, race or ethnicity (where allowed), residency in a low-income neighborhood, having been formerly incarcerated, having a disability, or being long-term unemployed (Gross and PolicyLink 2019). Local and targeted hiring policies can be implemented by ordinance, as part of responsible contractor standards, or negotiated as part of project labor agreements or community benefits agreements (UCLA Labor Center 2014). Baltimore’s local hire law, for example, requires compliance by vendors, contractors, and subcontractors who do business with the city, and is applicable to city-awarded contracts of more than $300,000, and city-subsidized projects of more than $5 million. The law requires businesses and all of their subcontractors to post new jobs with the mayor’s Office of Economic Development exclusively for a period of seven days, that 51% of all new hires are Baltimore residents, and for businesses and subcontractors to submit monthly reports (Baltimore OED n.d.).

Project labor and community benefits agreements

Project labor agreements (PLAs) are used primarily in the construction industry to establish the terms of employment for all workers on a project. Generally, PLAs specify workers’ wages and benefits, and may include provisions requiring contractors to hire workers through union hiring halls, otherwise establish a unionized workforce, or develop procedures for resolving employment disputes. PLA terms often also prevent workers from striking, and employers from locking workers out, during the project (Mangundayao, McNicholas, and Poydock 2022). PLAs can help eliminate costly delays caused by labor conflicts or shortages of skilled workers. While many states have policies that promote PLA use in state-funded projects, some states restrict or disallow them (Brubeck 2018; FC and SLC 2018; Von Wilpert 2017). Local governments such as those in Boston, Los Angeles, and New York City have successfully used PLAs for years; more localities could use PLAs on major projects.

Community benefits agreements are made between developers of a commercial and/or residential project and representatives of community groups where the project is being developed (PWF n.d.a). Communities can stipulate certain requirements for the projects, such as hiring from the local community, or guaranteed financial or social benefit from the project; in return, the developer receives the community’s support for the project (Island Institute 2021). Major development often occurs on city land, receives public funding or tax breaks that can accrue value to the developer, and in almost all cases require land use approvals that require the support of local government officials (PWF and LP 2019). Consequently, local governments are sometimes parties to community benefits agreements directly, may have a separate agreement with developers that is also part of negotiations, or may otherwise leverage their land use or funding powers as a part of these community benefits agreement negotiations.

Some examples of community benefits and labor peace agreements are as follows:

• In 2012, a community coalition and the city of Oakland negotiated a community benefits agreement that included requirements for local and targeted hire, living wages, fair chance hiring, limitations on the use of temporary workers, and community oversight and enforcement (PWF n.d.c).
• In 2018, the city of Nashville supported a community coalition in winning a community benefits agreement that included requirements for local hire, a $15.50/hour minimum wage, mandatory worker safety training for construction workers and supervisors, and workforce development (Porterfield 2021).
• A 2008 community benefits agreement regarding the development of the Bayview-Hunters Point neighborhood of San Francisco included a labor peace agreement in key industries related to the project (PWF n.d.c).
• Pittsburgh also has an ordinance from 1999 that requires hotel contractors and employers to sign labor peace agreements when city financing has been involved in the development of the hotel (Pittsburgh 1999).

Some localities created compliance requirements to obtain, retain, or renew permits or licenses; however, limited enforcement lessens deterrence

The licensing and permitting process can be used to drive improved labor standards and conditions; accordingly, some localities have incorporated labor-related requirements into these processes (Madland and Rowell 2017). This can take the form of requiring disclosures or evidence of compliance as part of the application or renewal process, or imposing potential permitting or licensing consequences in the event of certain established violations.

One caveat regarding the numerous laws that have been passed in this area: lack of media reports suggests very limited exercise of these powers by localities that have passed them. As with any law, the effectiveness of these provisions depends in large part on enforcement. Economists have observed that “employers will not comply with the law if the expected penalties are small either because it is easy to escape detection or because assessed penalties are small” (Ashenfelter and Smith 1979). Licensing and permitting consequences change both parts of the equation—the ease of escaping detection, and the scale of the assessed penalties. In addition, as discussed in Section 9 below, media coverage of these consequences would likely significantly drive deterrence.

Localities face several challenges in operationalizing these requirements. First, there is the need for at least some dedicated staff time on the local level to make the program work. There is also the logistical challenge of ensuring that local licensing or permitting agencies learn about serious violations, which will require proactive outreach and research. In addition, unless they are given very clear direction or mandates from the ordinance and/or from their chain of command, licensing or permitting agencies may be reluctant or resistant to imposing consequences based on workplace violations (even those that are proven and unremedied), seeing these issues as outside of their substantive purview.

There also may be concerns about revocation of a license or permit possibly leaving workers out of jobs. However, licensing and permitting provisions generally provide ample opportunities to cure, as well as a range of consequences—not only the most severe—including a period of temporary suspension for a license or permit, or a probationary period. In addition, the existence of licensing or permitting consequences could permit an agency to reach a negotiated settlement with terms to ensure future compliance, such as requiring an employer to engage an independent monitor. Such negotiated settlements or less punitive measures could in many cases be preferential to revocation.

In addition, it is likely that even one or two well-selected, well-publicized uses of these powers would achieve much of the desired deterrence in a given industry or neighborhood. Further, the limited available examples suggest that these consequences work: as described below, the Santa Clara County Office of Labor Standards Enforcement has operationalized food permit consequences for restaurants with unpaid wage-related determinations from the state labor commissioner. In response, almost all employers involved have paid what they owed in order to avoid further consequences.

In short, this tool appears to be underutilized despite its apparent untapped potential in terms of deterring violations. Localities without these laws might consider passing them, along with required annual reports on activities. Localities with such laws might wish to systematically enforce them through leveraging the license application and renewal process, and through scheduled routine checks with local, state, and federal labor enforcers, and routine searches of court filings.

Sample legislative language

Even without language specifically addressing wage theft or other labor conditions, licensing or permitting laws may contain general language with catch-all provisions that may be used for the purposes of ensuring licensees or permit holders comply with workplace laws. The Minneapolis Code (Minneapolis n.d.d) section on business license holders provides several examples of this:

• It requires license holders to“maintain and operate the business in compliance with all applicable laws and ordinances, including the zoning, fire, environmental health, environmental management, license, food, liquor, housing and building codes” (emphasis added).83 The “all applicable laws and ordinances” provides a basis for taking adverse action against a licensee based on proven violations of wage or other workplace laws.
• It requires license holders to “pay all delinquent court judgments arising out of their business and business operations.”84 This provision could provide a basis for adverse action in a situation where a judgment related to wage, discrimination, or other workplace violations remains unsatisfied.
• Finally, the code states, “The provisions of this section are not exclusive. Adverse license action, inclusive of, but not limited to, revocation, may be based upon good cause at any time upon proper notice and hearing. This section shall not preclude the enforcement of any other provisions of this Code or state and federal laws and regulations.”85 This broad “good cause” language again provides an opening for action based on workplace practices, such as persistent ongoing violations or egregious infractions.

In addition to potential use of this type of general language, some city laws specifically reference working conditions and labor violations in relation to issuance or revocation of permits and licenses.

For example, Philadelphia’s city code allows the city to “deny, suspend, or revoke any license or permit issued or pending” for a period of up to one year if the applicant or licensee was found guilty, liable, or responsible for violating the city’s anti-wage theft ordinance. In addition, all applicants for a commercial or business license must certify that they have not been found guilty, liable, or responsible for violating wage theft laws within the past three years (Philadelphia n.d.b). Similarly, Jersey City, New Jersey’s wage theft prevention law prohibits issuance or renewal of a license or permit to an applicant or entity that has been found liable for wage theft and has not come into compliance within 90 days of any final judgment. It also requires disclosure of wage theft cases within the two years prior to license or permit application, and requires the city to make an annual request to the state labor department for any wage claims (and associated documents) filed against licensees in the past two years (Jersey City n.d.).

Permits

Some localities have used the permitting process to drive labor compliance. Prior to issuance of a permit for construction of a building above a threshold size, the city of Milpitas, California, requires applicants to sign a form (Milpitas n.d.) acknowledging responsibility for complying with certain state and local labor laws. They must also sign a form certifying compliance before a certificate of occupancy will be issued for the project (Milpitas n.d.). For issuance of a special construction permit under the Quincy, Massachusetts, city code, all levels of entities involved in the project (construction manager, lead contractor, contractor, subcontractor, etc.) must comply with wage payment-related laws; if not, the city’s measures to achieve compliance include issuance of a stop-work order until there is compliance.86

Michigan City, Indiana, creates requirements for issuance of building permits for construction projects of more than $250,000, including that in the past three years, the contractor must not have been barred from bidding on public work because of, or been found to have committed, legal violations pertaining to wages, taxes, workers’ compensation, or misclassification. It also requires contractors who receive permits to comply with these laws as well, and requires the property owner applying for a building permit to use their best efforts to require all contractors to comply with these obligations. The law contains serious potential consequences, including suspension of the permit (requiring stoppage of work), or even revocation (Indiana n.d.).

The Better Builder Program in Austin, Texas, uses a carrot instead of a stick. The program, in partnership with the Workers Defense Project (WDP n.d.), provides an innovative example of creating permit-related incentives for employers willing to commit to higher labor standards. In the program, construction companies willing to ensure certain protections for construction workers on commercial projects may receive expedited handling of their permits (Austin n.d., Hasan 2017; Anderson 2017).

Licenses

A number of localities incorporate wage theft and labor compliance into their business licensing laws and practices. For example, the city of Toledo prohibits issuance of a license to any applicant who has found liable or been convicted pursuant to the city’s anti-wage theft laws or any other wage-related provisions of local, state, or federal law within the previous two years.87 The Seattle municipal code empowers the Department of Finance and Administrative Services to deny, refuse to renew, or revoke an employer’s business license, if requested to do so by the Office of Labor Standards as a result of an unsatisfied settlement or order.88

In Boston, a 2017 executive order allows the city’s licensing board to take into consideration whether a licensee has been found to have violated state or federal wage laws in determining whether to reissue, modify, suspend, or revoke a license (Boston MO 2017). A number of localities in Massachusetts have similar provisions. In Northampton, the License Commission has authority over issuance and administration of licenses for a range of types of businesses: service and sale of alcoholic beverages; operation of restaurants, hotels, inns, and lodging houses; indoor and outdoor entertainment for licensed and nonlicensed premises; car dealers; and more. When issuing a new license or a renewal, the License Commission requires completion of a Fair Wage Compliance Certificate (NLC n.d.), attesting that the business is not subject to a judgment or final determination resulting from a violation of state or federal wage protection laws. If they do not certify as such, they may be required to provide a wage bond for the time period covered by the license (Northampton n.d.). The media reported on a case in which this wage bond requirement could potentially be triggered, based on citations issued by the Massachusetts attorney general’s office (Fieldman 2021).

The Santa Clara County (California) Office of Labor Standards Enforcement is an agency that has begun to meaningfully operationalize permitting consequences for violators of labor standards laws. Data from the California Division of Labor Standards Enforcement showed that Santa Clara County workers filed the highest number of wage theft claims in the state: over a nearly five-year period, retail food vendors were found to owe nearly $5 million in back wages, an estimated $2,900 per employee. In addition, worker advocates reported on (Gleeson, Taube, and Noss 2014) the high incidence of wage theft and highlighted potential responses by local government. Accordingly, the county established a food permit enforcement program (SC OLSE n.d.d) to encourage payment of existing judgments by conditioning the issuance, renewal, or retention of food facility permits on compliance with labor standards.

If a retail food vendor is determined to be in violation of a judgment for nonpayment, the county may elect to temporarily suspend or revoke the vendor’s food health permit. The program, which is being rolled out gradually to all zip codes in the county, contains graduated measures to encourage payment of outstanding wages: the county sends three notices (a notice of outstanding judgment, notice to comply, and notice of violation, with 15 days to respond to each), and ultimately, continued nonresponsiveness or noncompliance will lead to a food permit suspension of at least five days (with notice provided to the public regarding the reason for the suspension). The county created a flow chart to explain the process, contained in Figure A. One noteworthy aspect of this process that may increase its likelihood of success and effectiveness is its focus on only one industry (restaurants), and its gradual rollout plan, based on zip codes. This kind of approach—targeting a problem industry and gradual implementation—could readily be replicated elsewhere. The county also added ongoing wage theft violation information to its “SCCDineOut” app, which allows county diners to view restaurants’ food safety records on their smartphones (Ochavillo 2019).

Figure A

Retail food vendors may have food health permit suspended or revoked for noncompliance. In addition, in 2010, the San Francisco Department of Public Health, recognizing the socioeconomic determinants of health and the poor health outcomes resulting from labor violations, incorporated certain labor elements into its restaurant permit review process, including requiring proof of workers’ compensation insurance by all applicants, as well as successfully leveraging the permitting process in relation to unremedied serious labor violations by several employers (Bhatia et al. 2013).

Localities can support workers through exercise of public leadership: education and outreach, issuing reports, holding hearings, and general advocacy

Localities have leveraged their soft powers to support workers’ rights and organizing. Local agencies devoted to protecting workers’ rights have used a range of tools to educate workers about their rights, inform employers about their obligations, and share information with the broader community about issues affecting workers. They have issued reports, conducted extensive public education and outreach, made materials available on their websites, garnered media coverage, and more. Localities without dedicated labor agencies can also use these soft powers to promote public and worker education. Moreover, local elected officials—whether individually or collectively alongside other officials and community labor groups—can use their public platforms and convening authority to provide public education and support workers, including those who are actively forming and joining unions.

Strategic communications, including use of media, is particularly important in educating workers about their rights and deterring violations. Media coverage increases employers’ knowledge about their legal obligations; it also increases their perceptions about the likelihood and cost of detection of violations. A recent study showed that press releases about OSHA enforcement of workplace safety violations deterred other workplace safety violations, an effect likely applicable to other labor standards laws as well (Johnson 2020). In addition, many workers, especially low-wage workers, have limited knowledge about the laws that affect them (Rankin and Lew 2018; Miller and Tankersley 2020). There are numerous communications tools that localities can use to reach the public (Gerstein and Goldman 2020).

Many local labor agencies have issued reports on worker issues or on their activities supporting workers

Several local agencies have issued regular reports on their activities or on the state of workers’ rights within their jurisdiction. Annual reports generally provide a comprehensive overview of an office’s work. In some jurisdictions, such as Chicago, Duluth, and St. Paul, annual reports are required by statute, a beneficial requirement that ensures transparency and continued focus on the labor offices’ work (Chicago n.d.c; Duluth n.d.; St. Paul n.d.c). In other jurisdictions, such as New York and Seattle, there are not annual report requirements per se, but other mandates for regular report-backs; Seattle’s ordinance requires an annual report regarding required funding for the Office of Labor Standards (Seattle n.d.a) (which necessarily requires an accounting of the past year’s activities), and individual laws in New York City have their own specific reporting requirements (NYC n.d.b).

Here’s a look at some local reports:

• The Chicago Office of Labor Standards issued annual reports covering its activities in 2019 (Chicago OLS 2019), 2020 (Chicago OLS 2020), and 2021 (Chicago OLS n.d.).
• The Denver auditor issues an annual report (Denver OA 2021a), and the 2021 version has a section (Denver OA 2021b) on wage-related enforcement.
• The city of Los Angeles issued a milestone report (LA City OWS 2022) in January 2022, detailing its activities and accomplishments since 2016.
• The Minneapolis Labor Standards Enforcement Division has a running dashboard (Minneapolis n.d.a) on its website, with data about the division’s activities, and issues an annual report (Minneapolis 2020).
• St. Paul includes labor enforcement data in the annual report (St. Paul 2020) of the Department of Human Rights and Equal Opportunity.
• The New York City Department of Consumer and Worker Protection has issued annual reports (NYC n.d.d) on the state of workers’ rights since 2017. The department in 2018 issued a report (NYC 2018) specifically on paid care workers.
• The Philadelphia Department of Labor issued annual labor policy and compliance reports (Philadelphia OLS & OWP n.d.) in 2019, 2020, and 2021. In addition, the department issued a report (Cox 2020) in 2020 on the Philadelphia Worker Relief Fund, which provided foundation and city-funded cash assistance to workers excluded from unemployment insurance and pandemic-related stimulus, through distributions via 14 community-based organizations.
• The San Francisco Office of Labor Standards has issued three annual reports (SF OLSE n.d.a).
• The Santa Clara County Office of Labor Standards Enforcement has issued several reports, including an annual report (SC OLSE 2020) in 2020.
• The Seattle Office of Labor Standards has an extremely detailed interactive dashboard (Seattle OLS n.d.b).

Local labor agencies have launched campaigns to educate communities about workers’ rights

Many local labor offices are extremely active in reaching out to the public and educating workers about their rights as workers. The New York City Department of Consumer and Worker Protection has engaged in a number of targeted campaigns, including educating the public about the city’s paid sick leave law when it first took effect, introducing the agency’s new name (NYC 2019c) to include the word “worker,” and reaching out to nail salon workers (NYC 2019b). During the early months of the COVID-19 pandemic, the department set up a hot line (NYC 2020a) for workers with questions about the city’s reopening.

The Minneapolis Labor Standards Enforcement Division held a workshop to help employers plan for a minimum wage increase, (Minneapolis 2018), as well as a workshop on paid sick and safe time for immigrant-owned small businesses (Minneapolis 2017). The Philadelphia Department of Labor has extensive know-your-rights resources on its web page (Philadelphia DOL n.d.), including access to a video (Philadelphia 2021a) about city worker protections during the COVID-19 pandemic.

The Chicago Office of Labor Standards and Denver Labor are both relatively new offices that have taken considerable action to educate the public in their cities. In Chicago, the Department of Business Affairs and Consumer Protection, within which the Office of Labor Standards is located, has its own YouTube channel, and the Office of Labor Standards has posted numerous webinars there on a wide range of labor-related topics (Chicago Dept. BACP n.d.; Chicago n.d.b). The office also created a “Your Home is Someone’s Workplace” campaign focused on domestic workers, and has a web page specifically focused on this workforce, as shown in Figure B (Chicago n.d.a). 

Figure B

The Chicago Office of Labor Standards also engaged in an outreach campaign about a new law giving domestic workers the right to a written contract from their employer (Chicago n.d.a; Chicago Dept. BACP 2021b). Some outreach took place in conjunction with the nonprofit worker organization Arise Chicago, which provided trilingual (English, Spanish, and Polish) sample contracts for employers’ use (Arise Chicago n.d.).

Los Angeles County announced a similar “Your Home is Someone’s Workplace” campaign to educate employers about domestic workers’ rights, and the Philadelphia Labor Department conducted a fair workweek survey in English and Spanish (LA County CBA 2021a; Chewning 2021b, 2021a).

Denver Labor has an extensive outreach and public education function. The office holds “Wages Wednesday” live on Wednesdays on the Denver Labor Facebook page, including programs in English and Spanish (Denver 2022b, n.d.a). The office held nearly 50 live Facebook trainings in 2021, and had bilingual (English and Spanish) staff available to answer questions (Denver OA n.d.a). The office web page highlights restitution stories, and contains online resources for small businesses about compliance (Denver n.d.b, n.d.c). It also contains tools for workers and employers: a regional address finder to assess whether work performed was in the relevant local boundaries, and a minimum wage and tip calculator, among other things. Also, the office launched an “Earned It, Deserved It” campaign to raise awareness of the city’s minimum wage ordinance, with bilingual ads at regional bus stops, and on radio, television, and social media platforms (Denver OA 2021a, p. 16).

Local labor agencies have highlighted worker issues in their jurisdictions through advocacy, hearings, and convenings

Several city labor agencies have gotten involved in various worker advocacy efforts.

In 2021, officials from several local enforcement agencies, including Chicago, New York City, Philadelphia, Seattle, and the district attorneys of Suffolk County, Massachusetts, and Washtenaw County, Michigan, all signed a joint letter (NYC DCWP 2021), along with 11 state attorneys general, to the U.S. Department of Homeland Security (DHS) supporting the agency’s plan to change its approach to worksite enforcement to support labor rights, and recommending changes to DHS policies and practices to facilitate the ability of state and local labor officials to enforce workplace laws. The letter was in response to a recent DHS memorandum (USDHS 2021) to Immigration and Customs Enforcement (ICE), Customs and Border Protection (CBP), and U.S. Citizenship and Immigration Services (USCIS), directing them to adopt practices and policies to deliver more severe consequences to exploitative employers, and increase workers’ willingness to report violations of worker protection laws.

In March 2020, agency officials in four cities (Chicago, New York, Philadelphia, and Seattle) called on (NYC 2020b) FedEx, UPS, and XPO to improve their policies in response to the then-new pandemic, particularly in relation to paid sick leave. Also in 2020, four localities (Chicago, New York, Philadelphia, and Pittsburgh) joined (NY AG 2020) a coalition of 24 state attorneys general in submitting a comment letter (NY AG et al. 2020) to the U.S. Department of Labor opposing a proposed regulation that would make it easier for employers to classify workers as independent contractors instead of as employees.

Finally, the New York City Department of Consumer and Worker Protection has held a number of hearings and convenings. For example, in 2017, it held a public hearing (NYC 2017) on the state of workers’ rights in the city, along with the Mayor’s Office of Immigrant Affairs and the New York City Commission on Human Rights, and in 2019, the same three agencies, along with partner organizations, held a convening (NYC 2019a) focused on immigrant workers.

Making know-your-rights resources, labor law posters, and other materials widely available, including in multiple languages

Some local agencies have been particularly aware of the need to reach the broad range of workers within their jurisdictions, and have translated materials into multiple languages. Cities and counties operate on the ground serving diverse communities, and may sometimes be more attentive to language access concerns than agencies at other levels of government.

The New York City Department of Consumer and Worker Protection has produced workers’ bill of rights booklets in 15 languages and audio files in five indigenous languages (Garifuna, K’iche, Kichwa, Mixteco, and Nahuatl), as well as an animated video. The animated video and audio files also enhance access for people with varying literacy levels. The Philadelphia Department of Labor web page (Philadelphia DOL n.d.) contains workers’ rights resources in 12 languages. Los Angeles City has minimum wage and paid sick leave posters available in 13 languages (LA City OWS n.d.a). Santa Clara County’s Office of Labor Standards’ web page provides information (SC OLSE n.d.f) in five languages. Even smaller jurisdictions, like Emeryville, California, with a 2020 population (U.S. Census Bureau 2022e) of less than 13,000, offers minimum wage and paid sick leave notices and posters (Emeryville n.d.) in six languages.

Local labor agencies have generated media coverage about worker issues

In addition to issuing press releases and reports, some offices have been effective in helping to catalyze coverage of workers’ rights issues in the local press. The Philadelphia Department of Labor has been especially effective in this regard, helping place news stories about workers’ rights under the city’s fair workweek law when it was first enacted, about its issuance of an annual report that would shame employers with records of violations, and about the Philadelphia Worker Relief Fund for workers excluded from other public assistance during the pandemic (Dorfman 2021; Reyes 2021b, 2020; Marin 2020).

The Santa Clara County Office of Labor Standards received coverage (Reese 2021) on a county contracts enforcement pilot program, in which the office reviews judgments and orders from state and federal labor authorities to determine whether a contractor should be disqualified from working with the county. The office also received coverage (Telemundo n.d.) on Telemundo about its enforcement program related to county food permits.

Finally, workers themselves can catalyze coverage of enforcement actions by local labor enforcement agencies, as when a worker whose case was handled by the San Francisco Office of Labor Standards gave a TEDx Talk (Winner 2019) and was featured in a PBS NewsHour program (Nawaz and Carlson 2021) about the city’s fair chance ordinance, which requires employers to consider mitigating circumstances and rehabilitation evidence for job applicants with a criminal record.

Local elected officials have used their public platforms and convening authority to support workers

Local elected officials have used their public platforms to demonstrate their support for working people in many ways. Such officials have shown up at rallies, events, and actions (including strikes (Aponte 2021) and walking workers back to work after days of action). Local elected officials have also written opinion pieces (op-eds) in support of worker advocacy and to bring attention to harms and challenges experienced by workers (Rosenthal 2021), and have written and signed letters to employers expressing concerns about worker treatment. Moreover, local elected officials can hold hearings, which allow workers an opportunity to share about their experiences and for officials to ask employers relevant questions.

Local elected officials can also show support for ongoing worker organizing campaigns. For example, in 2022, New York City Comptroller Brad Lander, as a public pension fund trustee, led a shareholder effort to address high injury rates and turnover at Amazon warehouses (Newman 2022). Also in 2022, the Seattle and Philadelphia city councils both passed resolutions supporting Starbucks workers seeking to unionize (Taylor 2022b; Valentine 2022). A Local Progress website provides additional ideas and resources for local elected officials wishing to show support for the Starbucks worker organizing campaign (Local Progress, n.d.b.).  

Conclusion: Localities throughout the country can adopt supporting workers’ rights as among the core functions they perform for their communities

There is a wealth of possibilities for localities that wish to get involved in expanding and enforcing workers’ rights. While some recent local action emerged in response to the Trump administration’s hostility to workers’ interests, much of cities’ work in this area pre-dated 2016. Accordingly, the local role in protecting working people continues to be relevant and critically important, even in the context of a worker-friendly federal administration.

Localities have been key innovators on labor matters, piloting new laws on such issues as paid sick leave and fair workweek; with proof of concept at the local level, such laws are later adopted at the state level (and perhaps eventually at the federal level as well). Creation of worker boards, strategic community enforcement partnerships, and using permits to drive compliance are also local innovations that help move the field forward. In addition, expansion and robust enforcement of workers’ rights at the local level serves as a hedge in our federal system, helping ensure at least some continued protection of workers in times when federal or state government is unfriendly to workers or insufficiently effective in protecting them. Moreover, public enforcement of workers’ rights is of even greater urgency when skyrocketing use of forced arbitration blocks workers from bringing their cases in court.

Localities in states without preemption of local laws may undertake any and all of the actions described above. However, even localities facing serious legal, political, or financial constraints in relation to their involvement in worker issues still can take action that will have a meaningful impact on workers’ lives.

Specifically, even in states with preemption:

• Localities can offer high-road standards to their own workforces, including enabling or facilitating collective bargaining where permitted, as well as sufficient minimum wage and paid sick/family leave for municipal employees.
• Localities can consider enacting laws that may not be preempted, such as those that do not set labor standards. These might include anti-wage theft ordinances that do not set a local minimum wage, but simply enforce existing rates; responsible bidder ordinances; ordinances concerning licensing or permitting consequences or incentives; or laws on salary transparency, for example. Local leaders can examine their state’s preemption law to assess the realistic possibilities.
• Localities can assess whether there is authority to require increased labor standards at the local airport.
• Localities can establish a worker advisory board to create a vehicle for open lines of communication and opportunities for worker leaders to raise newly emerging issues that the locality may be able to help address.
• Localities can establish a dedicated labor office or at the very least, a dedicated labor liaison at the local level. Even in a state with strong preemption, such an office could likely do some or all of the following:
  • Conduct outreach and public education on workers’ rights. Create a workers’ rights landing page on the locality website (in languages commonly used in the locality), with information about federal, state, and local workers’ rights applicable within the jurisdiction, (however expansive or limited they may be), as well as hyperlinks to relevant government agencies and other worker-oriented resources. Conduct outreach and include basic workers’ rights information in community outreach by existing local officials (such as by Fair Employment Practices Agencies, where they exist).
  • Review contracting, licensing, permitting standards, especially in industries with high rates of violation. Consider whether new laws are needed in order to impose compliance prerequisites or consequences for violations of labor laws. If so, try to enact them. In either case, routinely review labor compliance records of recipients of local government contracts, permits, or licenses, and consider whether action can be taken by contracting, licensing, or permitting agencies.
  • Review forms used for contracting, permitting, and licensing. Incorporate workplace law information about employer responsibilities on application forms and require signed certification by bidders or applicants that they will comply with these laws.
  • Research working conditions within the locality (possibly in conjunction with local or state academics), and issue and publicize reports on findings
  • Hold convenings or hearings to uncover and highlight problems facing workers, and to generate media coverage of these issues.
  • Create a comprehensive complaint form for workers and become a one-stop shop for reporting violations, serving as a gateway to help workers navigate other agencies and resources.
  • Publish enforcement data and stories to demonstrate effectiveness and deter violations.
  • Enlist and/or organize local resources, such as law school clinics or the local bar, to address worker issues. For example, the Massachusetts attorney general’s office holds a monthly wage theft clinic for cases it cannot handle, with nonprofit organizations, pro bono lawyers, legal services offices, lawyers who can take contingency cases, etc. (Massachusetts n.d.a). Along similar lines but addressing a problem unrelated to labor, the California Attorney General’s office in 2015 convened a roundtable of law firms and immigrants’ rights advocates about the legal needs of unaccompanied minors fleeing Central America; these efforts led to the legal representation of more children in immigration cases (CA DOJ 2015).

Localities in states without preemption, in locales more friendly to workers’ rights, can consider enacting any and all of the above measures. In addition, they have even more leeway to act, since they can:

• enact higher labor standards for all workers within their jurisdiction
  • minimum wage, overtime, paid sick and safe leave, fair workweek, expansive anti-discrimination laws, strong anti-retaliation protections
  • protections needed in particular industries: domestic workers, hotel, retail, fast-food, car wash workers, freelancers, etc.
  • cutting-edge worker protections such as just cause termination, gig worker pay or termination standards, salary transparency, and more
• meet with local worker organizations to learn what issues they identify as pressing
• create, fund, and empower a robust local office of labor standards with
  • enforcement power, including subpoena power
  • the ability to inform the administration and legislators on policy matters
  • a strategic enforcement approach
  • a funded community partnership model
• enact and enforce job quality standards (prevailing wage, living wage) and responsible bidder ordinances for local government contractors
• enact and fully operationalize workplace law compliance prerequisites and consequences for applicants and holders of locally issued permits and licenses.

In all localities—those in states hostile to workers, friendly to workers, and in between—there are opportunities to stand up for working people and take action.

Acknowledgments

The authors would like to thank Daniel Perez and Katherine DeCourcy, who provided excellent research assistance.

About the authors

Terri Gerstein is the director of the State and Local Enforcement Project at the Harvard Law School Labor and Worklife Program and a senior fellow at the Economic Policy Institute. She was recently an Open Society Foundations Leadership in Government Fellow. Previously, Terri was the labor bureau chief in the New York State Attorney General’s Office and a deputy commissioner in the New York State Department of Labor. Before her government service, Gerstein was a nonprofit lawyer in Miami, Florida, where she represented immigrant workers and co-hosted a Spanish language radio show on workers’ rights. She was a law clerk for Judge Mary Johnson Lowe of the U.S. District Court for the Southern District of New York. Her writing on workers’ rights issues has appeared in numerous outlets, including the New York Times, Washington Post, NBC News Think, The American Prospect, Politico, Slate, The Nation, and more; a complete listing is available at www.terrigerstein.com. She is a graduate of Harvard College and Harvard Law School.

LiJia Gong is the policy and legal director at Local Progress. She leads the development of Local Progress’ policy and research capacity to support members, and drives the development and growth of national program areas. Gong is an attorney with more than a decade of experience in policy, litigation, and political strategy. Prior to joining Local Progress, she served as counsel at Public Rights Project, an organization that empowers local and state governments to advance civil rights, worker and consumer rights, and environmental justice. At Public Rights Project, she launched a partnership with Local Solutions Support Center to fight abusive state preemption of local policymaking. Gong worked on the 2018 campaign to re-elect Sen. Elizabeth Warren of Massachusetts and served as a law clerk for Judge Kiyo Matsumoto of the U.S. District Court for the Eastern District of New York. Prior to becoming a lawyer, Gong worked as a research assistant at the Federal Reserve Board of Governors. LiJia earned her J.D. from Georgetown University Law Center and her B.S.F.S. from Georgetown University.

Endnotes

1. New State Ice Co. v. Liebmann, 285 U.S. 262, 311 (1932) (Brandeis, J, dissenting).

2. New State Ice Co. v. Liebmann, 285 U.S. 262, 311 (1932) (Brandeis, J., dissenting).

3. This report uses the terms “localities” and “local governments” as an umbrella term for political subdivisions of a state that include, for example, counties, cities, townships, villages, and school districts. Local government decision-making structures and authorities vary significantly–in some localities the executive has far more authority than the legislative body (often referred to as “strong mayor” systems as applied to cities), while in some localities significant control rests with appointed offices like a city manager. Localities also vary tremendously in terms of size–some towns have only a few hundred or thousand residents, whereas Los Angeles County has more than 10 million residents. Accordingly, the capacity for policymaking and enforcement among localities also varies greatly. Due to this diversity across localities, this report uses “localities” and “local governments” generally to refer to powers that may belong to the local executive, legislature, administrative agencies, or some combination thereof in a given jurisdiction.

4. Diller argues that cities’ smaller scale, concentrated political preferences, and streamlined lawmaking processes facilitate public health innovation.

5. Many localities have longstanding agencies that enforce human rights, civil rights, or other anti-discrimination laws; this report touches on the work of such agencies, but they are not the focus. 

6. Because in its employment-related lawmaking and enforcement, Washington, D.C., operates more akin to a state than a city, it is not included in this report. For more information for enforcement actions taken by D.C.’s attorney general, please see Gerstein 2020.

7. The federal government sets the federal minimum wage; that rate serves as a national floor. Under the federal minimum wage law, the Fair Labor Standards Act, states and localities may pass minimum wages that are higher. Many, but not all states, also allow localities to require pay higher than the state minimum wage.

8. The advocacy group “A Better Balance” has an option on its website that enables filtered searches of enforcement agencies handling paid sick day enforcement (A Better Balance n.d.b). Several localities assign this function to their offices of community relations or of human rights (Boulder 2022; Montgomery n.d.; Pinellas OHR). In Duluth, Minnesota, the city clerk has authority to enforce the law (Duluth 2022b). In Miami-Dade County, a consumer mediation center handles wage disputes (Miami-Dade WTP). This list is illustrative but not exhaustive.

9. UC Berkeley 2022; Boston OWD n.d.; Chicago OLS 2022; Denver 2022a; Duluth 2022a; Emeryville 2022; Flagstaff 2022; LA City OWS n.d.a; LA City BCA n.d.; Minneapolis n.d.b; NYC OLPS n.d.b; Philadelphia n.d.a; SF OLSE n.d.c; Santa Clara n.d.a; SJ 2022; Seattle OLS n.d.d; St. Paul n.d.b; Tacoma n.d.

10. Brennan 2021; San Diego 2022.

11. Kelty 2022; Ludden 2021.

12. Miami-Dade WTP n.d.; Pinellas OHR n.d.; Broward OPSHR n.d.; Broward OIAPS 2022.

13. In re: Palm Beach County Wage Dispute Docket and Creation of “WD” Division, Administrative Order No. 3.907-3/15, March 9, 2015. Fifteenth Judicial Circuit Court in and for Palm Beach County, Florida. See Palm Beach 2015.

14. Bloomington n.d.

15. Bloomington 2022.

16. In March 2022, a Washington state bill was signed into law that will preempt Seattle’s local regulations of TNCs HB 2076, 2021–22 House of Rep., Reg. Sess. (Wash. 2022). See Washington 2022.

17. Res. 32038, 2021 City Council, Seattle (Seattle 2021). See Seattle CC 2021.

18. For an in-depth analysis of privatization generally, see Cohen and Mikaelian 2021.

19. Brief for the States of New York, Alaska, Connecticut, Delaware, Hawaii, Iowa, Kentucky, Maine, Maryland, Massachusetts, Minnesota, New Jersey, New Mexico, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia and Washington, and the District of Columbia as Amici Curiae in Support of Respondents, Janus v. American Federation of State, County and Municipal Employees, Council 31, et al., 138 S. Ct. 2448 (2018); see also Brief for the City of New York as Amicus Curiae in Support of Respondents, Janus v. American Federation of State, County and Municipal Employees, Council 31, et al., 138 S. Ct. 2448 (2018); Brief of Mayor Eric Garcetti, County Executive Dow Constantine, Mayor Jenny Durkan, Mayor Rahm Emmanuel, Mayor James Kenney, and Mayor Bill de Blasio as Amici Curiae in Support of Respondents, Janus v. American Federation of State, County and Municipal Employees, Council 31, et al., 138 S. Ct. 2448 (2018).

20. See, e.g., Louisiana (Louisiana Revised Statute 44:67.1(a), Davis v. Henry, 555 So.2d 457, 459 (La., 1990).

21. See, e.g., North Carolina (N.C. Gen. Stat. Ann. § 95–9).

22. Res. 2017–259 2017, Adams County Board of County Commissioners (Colo. 2017). See Adams Cty. BOC 2017.

23. Janus v. American Federation of State, County, and Municipal Employees, Council 31, et al., 138 S. Ct. 2448 (2018).

24. This authority typically derives from the “police power”—as in the power to promote the health, safety, welfare, and morals of the community—among the powers delegated to local governments. See, for example, Utah Const. art. XI, § 5 (delegating “the authority to adopt, and enforce within its limits, local police, sanitary, and similar regulations”).

25. Before 2012—the beginning of the Fight for 15 movement—only five local governments had minimum wage laws (UC Berkeley Labor Center 2022).

26. Birmingham, Alabama; Johnson, Lee, Linn, Polk, and Wapello counties, Iowa; Kansas City, Missouri; Louisville and Lexington, Kentucky; Miami Beach, Florida; and St. Louis, Missouri, passed local minimum wages that were higher than the state minimums, but they were subsequently preempted by state legislation, thereby rendering the local ordinances ineffective (UC Berkeley Labor Center 2022).

27. Dependency on tips often makes workers more vulnerable to sexual harassment.

28. Council Bill 18–008, 2018, Las Cruces City Cncl. (N.M. 2018). See Las Cruces 2018.

29. Oakland’s hotel minimum wage is higher than the citywide minimum wage for hotel workers who do not receive employer benefits.

30. Res. No. 20220127–053, 2022, Austin City Cncl. (Texas 2022). See Austin 2022.

31. There is a distinction between paid sick leave, and paid family and medical leave laws. Paid sick day laws require employers to pay workers for a modest number of days out of work for the short-term health needs of themselves and their families, while paid family and medical leave laws establish social insurance programs, typically funded by employer contributions and employee payroll deductions, to be used for longer-term medical issues, care for a new child, or care for a family member who is ill. This discussion addresses paid sick leave. Paid family and medical leave has been generally addressed in the United States at the state level, although some local governments do provide paid family and medical leave for their own employees. See Onuma 2015.

32. Austin, Dallas, and San Antonio passed paid sick leave laws that subsequently were found to be preempted in litigation. The laws were challenged by business groups arguing that the local ordinances were preempted by a Texas law that prohibits localities from enacting a minimum wage higher than the state’s. As a result, workers in these three cities lack the legal right to paid sick time. See A Better Balance 2021.

33. The state law in New Jersey mooted and preempted the numerous local paid sick leave laws.

34. Law 2018/150, 2018, New York City Cncl. (N.Y. 2018). See NY City Council 2018.

35. Law 2021/aa5, 2021, New York City Cncl. (N.Y. 2021). See NY City Council 2021.

36. Seattle’s local regulations of transportation network companies will be preempted pursuant to a state law passed in March 2022. See Washington 2022.

37. These localities include Albany County (New York), Atlanta, Chicago, Cincinnati, Columbia (South Carolina), Jackson (Mississippi), Kansas City (Missouri), Louisville, Montgomery County (Maryland), New Orleans, New York City, Philadelphia, Pittsburgh, Richland County (South Carolina), Salt Lake City, San Francisco, St. Louis, Suffolk County (New York), Toledo, and Westchester County (New York).

38. Colorado had passed a similar law in 2021. S.B. 19-085, 2019 Gen. Assemb., Reg. Sess.

39. Law 2022/031, 2022, New York City Cncl. (N.Y. 2022). See NY City Council 2022.

40. N.Y.C. Admin. Code § 20–1271 et seq.

41. Rest. Law Ctr. v. City of New York, 2022 U.S. Dist. LEXIS 24268, __ F. Supp. 3d __, 2022 WL 409190.

42. Rest. Law Ctr. v. City of New York, 2022 U.S. Dist. LEXIS 24268, __ F. Supp. 3d __, 2022 WL 409190.

43. N.Y.C. Admin. Code § 20–1301 et seq.

44. City of Los Angeles Municipal Code Chapter XVIII § 181.00 et seq.; San Francisco Police Code Article 33D.

45. A 2003 survey conducted by Airports Council International-North America concluded that city ownership accounts for 38%, followed by regional airports at 25%, single county at 17%, and multijurisdictional at 9%.

46. 8 Phila. Code § 18–201(8); Miami-Dade Cty. Res. No. R–148–07 (Feb. 6, 2007); Rules and Regulations, San Francisco Airport, Rule 12.1.

47. By using a state’s grant of local emergency authority, local governments might plausibly be able to adopt temporary emergency policies even when state law preempts such policies under normal circumstances (Haddow, Davidson, and Huizar 2020).

48. See discussion in Section 4.

49. These local governments include Chicago; Cook County, Ilinois; Duluth, Minnesota; Emeryville, California; Los Angeles; Minneapolis; Montgomery County, Maryland; New York City; Philadelphia; Pittsburgh; San Diego; San Francisco; Seattle; St. Paul, Minnesota; Tacoma, Washington; and Westchester County, New York. In general, this clarification of existing paid leave laws was permanent.

50. Many of these ordinances are no longer in effect, and the remainder that are still in effect are set to sunset on a specified date or after the conclusion of the relevant COVID-19 emergency order.

51. Bill No. 200303, 2020, Philadelphia City Cncl., (Pa., 2020). See Philadelphia CC 2020a.

52. CB 119793, 2020, Seattle City Cncl., (Wash., 2020).

53. Bill No. 200328, 2020, Philadelphia City Cncl. (Pa., 2020) See Philadelphia CC 2020b.

54. Coronavirus State and Local Fiscal Recovery Funds [rule], 87 Fed. Reg. 4338–4454 (January 27, 2022).

55. Minneapolis n.d.e.

56. The nonprofit organization Good Jobs First has lamented the lack of transparency in relation to state use of ARPA funds; it is likely that similar concerns exist in relation to local decision-making. See Furtado 2021.

57. Building & Construction Trades Council v. Associated Builders & Contractors of Massachusetts/Rhode Island, Inc., 507 U.S. 218 (1993).

58. Gade v. National Solid Wastes Management Association, 505 U.S. 88, 99–100 (1992).

59. Steel Inst. of New York v. City of New York, 716 F.3d 31, 34 (2d Cir. 2013).

60. In addition, five state plans cover only local and state government workers.

61. 29 USC § 218 (“No provision of this [Act] shall excuse noncompliance with any Federal or State law or municipal ordinance establishing a minimum wage higher than the minimum wage established under this [Act] or a maximum work week lower than the maximum workweek established under this chapter.”)

62. Wyeth v. Levine, 555 U.S. 555 (2009).

63. Also referred to as the “new preemption” or “abusive preemption” by some legal scholars.

64. HB 2076, 2021–22 House of Rep., Reg. Sess. (Wash. 2022). See Washington 2022.

65. For example, many state consumer protection and public nuisance laws empower city, county, and district attorneys to bring actions to enforce those laws. See, e.g., N.C. Gen. Stat. §§ 160A–193, 153A–140 (providing cities and counties with authority to abate public nuisances); Cal. Bus. & Prof. Code § 17204 (2019) (providing city and county attorneys in local jurisdictions with more than 750,000 residents the authority to bring unfair competition claims).

66. The Oakland city attorney’s office brought a case alleging wage and hour violations alongside a civil legal services organization to vindicate the rights of hotel cleaners (Oakland OCA 2018). In 2019, the San Diego city attorney’s office brought suit against Instacart alleging misclassification of its shoppers who obtain and deliver groceries and obtained an injunction, which was rendered inoperative by the passage of Proposition 22 in 2020 (Allsup and Mulvaney 2021).

67. In Alabama, California, Colorado, Florida, Kansas, Kentucky, Michigan, Minnesota, Missouri, and Montana, district attorneys have civil authority to enforce the state unfair deceptive acts and practices (UDAP) law. Ala. Code § 8–19–4, 8–19–8 (2019); Cal. Bus. & Prof. Code § 17204 (2019); Colo. Rev. Stat. § 6–1–103 (2018); Fla. Stat. § 501.203, 501.207 (2019); Kan. Stat. Ann. § 50–626(a)–632(a)(3) (2018); Ky. Rev. Stat. Ann. § 367.300 (West 2019); Wayne Cty. Prosecutor v. Wayne Cty. Bd. of Comm’rs, 93 Mich. App. 114, 127 (1979); Minn. Stat. § 325F.67, 325F.70 (2019); Mo. Rev. Stat. § 407.020 (2018); Mont. Code Ann. § 30—14–121 (2019).

68. Wage theft is the practice of employers failing to pay workers the full wages to which they are legally entitled. It includes situations in which employers refuse to pay promised wages, pay less than legally mandated minimums, fail to pay for all hours worked, keep worker tips or deductions intended for worker benefits, or do not pay overtime. In some states, the term “wage theft” is defined in the law, but more commonly it is used as a colloquial and descriptive term to refer to a set of practices. See Rosado Marzán 2020 for a detailed description of wage theft.

69. See also, In re Vega, 2020 N.Y. Slip Op. 02094 (N.Y. Court of Appeals March 26, 2020).

70. Minneapolis Code 40.110.

71. Localities also may provide conditions on grants to improve worker standards. For example, Boston funded a pilot program to support small restaurants and their workers during the COVID-19 pandemic. The grants were conditioned on the small businesses paying workers $12.75 an hour, as compared with the $5.55 tipped minimum wage under Massachusetts law (Edwards n.d.).

72. Somerville Code of Ordinances, Chapter 9, Article III, Division 2. See Somerville n.d.

73. City of Boston Municipal Code Chapter 24. See Boston n.d.a, n.d.b.

74. “Assistance shall mean any grant, loan, tax incentive, bond financing, subsidy, or other form of assistance of one hundred thousand ($100,000.00) dollars or more realized by or through the authority or approval of the City of Boston, including, but not limited to industrial development bonds, Community Development Block Grant (CDBG) loans and Federal Enhanced Enterprise Community designations awarded after the effective date of this Chapter. The forgiveness of a loan shall be regarded as financial assistance. A loan shall be regarded as financial assistance to the extent of any differential between the amount of the loan and the present value of the payments thereunder, discounted over the life of the loan by the applicable Federal rate as used in 26 U.S.C., Section 1274(d) 7872(f). A recipient of assistance shall not be deemed to include leases and subleases.” City of Boston Municipal Code Chapter 24 § 24-2(a).

75. City of Boston Municipal Code Chapter 24 § 24-2(e). See Boston n.d.a.

76. City of Boston Municipal Code Chapter 24 § 24-11(a). See Boston n.d.b.

77. Res. BOS-2016-196, 2016 Board of Supervisors, Santa Clara County (Santa Clara 2016). See Santa Clara n.d.c.

78. Hoboken Municipal Code Chapter 23. See Hoboken n.d.a.

79. Hoboken Municipal Code Chapter 199. See Hoboken n.d.b.

80. Seattle Municipal Code § 14.19.080 (I). See Seattle n.d.b.

81. San Diego Municipal Code Article 2 Division 30 § 22.3004(c). See San Diego n.d.

82. Social service agencies have filed a lawsuit challenging this law. See Blau 2022. 

83. Minneapolis City Code § 259.250 (2). See Minneapolis n.d.d.

84. Minneapolis City Code § 259.250 (5). See Minneapolis n.d.d.

85. Minneapolis City Code § 259.250 (5). See Minneapolis n.d.d.

86. City of Quincy, Massachusetts, Code § 9.4.9-9.4.10. See Quincy n.d.

87. City of Toledo, Ohio, Municipal Code § 701.04 (b). See Toledo n.d.a.

88. Seattle Municipal Code 14.19.100 (A) (4). See Seattle n.d.b.

References

Court Decisions and Orders

Building & Construction Trades Council v. Associated Builders & Contractors of Massachusetts/Rhode Island, Inc., 507 U.S. 218 (1993).

Florida, Palm Beach County, Fifteenth Judicial Circuit Court, Administrative Order No. 3.907-3/15.

Gade v. National Solid Wastes Management Association, 505 U.S. 88, 99–100 (1992).

New State Ice Co. v. Liebmann. 285 U.S. 262, 311 (1932).

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Key findings

Preemption is common in the Midwest and is embedded in a racist history.

• “Preemption” in this context refers to a situation in which state lawmakers block local ordinances from taking effect—or dismantle an existing ordinance.
• State lawmakers in Midwestern states are more likely than those in the Northeast and West regions to misuse preemption to interfere with local governments’ ability to set strong labor standards that would support people struggling to make ends meet, such as raising the minimum wage and guaranteeing paid sick leave. While preemption of workers’ rights is most common in the South, it is also a significant problem in the Midwest.
• The abuse of preemption by Republican-controlled state legislatures in the Midwest is intertwined with a history of segregation and other policy choices that have reinforced anti-Black racism and white supremacy.
• Preemption laws in the Midwest are passed by majority-white legislatures and tend to create barriers to economic security in cities whose residents are majority people of color; in many cases, a plurality of residents in these cities are Black.
• In most cases, the local ordinances that state lawmakers preempt would disproportionately benefit Black workers and other workers of color, as well as women, immigrants, and workers who are paid low wages.
• Advocates and lawmakers have pushed back on harmful preemption. Notably, the Chicago Teachers Union succeeded in a campaign to restore their right to bargain over employment conditions. Momentum is also building to repeal rent control preemption in Illinois.

Preemption limits local governments’ ability to protect their residents from the COVID-19 pandemic.

• Misuse of preemption has prevented localities in some Midwestern states from responding to the pandemic with local policies promoting public health, such as mask mandates and stay-at-home orders.
• In addition, interference with local policymaking in the past prevented these same localities from enacting measures that would have made them better prepared to respond to the COVID-19 dual public health and economic crisis.

Case studies. In this report, we use case studies to (1) document the pattern of misuse of preemption by state lawmakers and (2) explore the adverse implications of this state interference on workers.

Introduction

For many, the COVID-19 pandemic shed light on the precarity of workers, especially people paid low wages, and of marginalized groups within our economic system. For others, the pervasive inequality and uncertainty that characterized the pandemic and economic crisis were not anomalies—they were just another manifestation of the poor job quality, weak worker protections, and economic unfairness that has long been in place. These features are the result of deliberate policy choices. In order to combat them, lawmakers at all levels of government must be motivated and empowered to act.

Local government efforts across the country have often been key to advancing welfare-enhancing policies to protect workers and counter economic inequities—especially when federal and state action has been inadequate or absent. Local governments have taken action, for example, to fight climate change, to protect and promote public health, and to reverse systemic injustices against people of color, women, immigrants, and the LGBTQ+ community.

Given the complexity and urgency of such issues, states should be working with their peers in local governments on them. But instead of partnering with local governments, conservative state lawmakers have increasingly used preemption—a tactic whereby a higher level of government limits or eliminates the power of a lower-level government to regulate an issue—to reduce the policy tools and power available to local lawmakers.

The Midwest is second only to the South in abuse of preemption

As we document in another report, Preempting Progress: State Interference in Local Policymaking Prevents People of Color, Women, and Low-Income Workers from Making Ends Meet in the South, preemption of workers’ rights policies is most common in the South, where these laws are part of a long-running effort to limit the rights and freedoms of Black people and entrench white supremacy (Blair et al. 2020). While white supremacy is most associated with the South and the states of the former Confederacy, white supremacy has been an unfortunate component of Midwest history as well. This shameful legacy lives on in many of the region’s institutions, including in state government’s abuse of preemption to prevent progress and justice.

After the South, the Midwest is the region in which the preemption of workers’ rights is most prevalent (Kim, Aldag, and Warner 2021). As shown in the interactive map below, state lawmakers in the Midwest have used preemption to deny local governments the ability to improve job quality through minimum wage increases, fair scheduling laws, and paid leave requirements. They have stopped local governments from setting standards for municipal contracts and procurement through mechanisms common elsewhere such as project labor agreements (PLA)—contracts used in the construction industry to set basic conditions for safety, pay, and benefits on municipal projects—and prevailing wage laws. They have also preempted any effort by local governments to hold app-based platform or “gig economy” companies to the same standards as other employers. In choosing preemption rather than empowerment, these state lawmakers are often bending to pressure from corporate interests and right-wing groups such as the American Legislative Exchange Council (ALEC) (Cornejo, Chen, and Patel 2018).

What’s in this report

We begin this report with an exploration of the historical context behind preemption in the Midwest. As is the case in the South, current-day preemption of workers’ rights in the Midwest is an extension of policies that were motivated by and that reinforced anti-Black racism. The modern policy landscape now also works to stifle efforts to promote equity for other workers of color, women, immigrants, and workers who are paid low wages.

After reviewing the historical context, we turn to specific case studies highlighting a range of issues, primarily focused on workers’ rights, in which state policymakers are interfering with local democracy throughout the Midwest. To the extent that the data allow, we show the specific impacts state interference has on people of color as well as women, immigrants, and workers who are paid low wages. In two of our case studies, we highlight ways advocates are resisting preemption, through efforts to repeal two types of preemption in Illinois.

Preemption in the Midwest is, in a great many ways, similar to preemption in the South. When local governments enact policies that benefit people of color or advance worker justice, state lawmakers—typically, though not exclusively, conservative lawmakers—have passed laws to overturn those local decisions. Sometimes, even when local policymakers have not passed any specific ordinances, state lawmakers act preemptively to take away their future rights to do so. In the cases documented here, the state legislatures were all majority white and male. (The appendix tables provide the demographics of the cities or counties side by side with those of the state legislatures.)

Finally, we discuss how the COVID-19 pandemic has disproportionately harmed the communities of color that have been preempted from taking local action, limiting their ability to effectively combat the public health crisis and further entrenching economic inequality.

Preemption in the Midwest is tied to segregation

The use of preemption to suppress communities of color in the Midwest today has its roots in the oppressive housing segregation policies the region implemented in response to the Great Migration. In the first half of the 20th century, 6 million Black Americans moved out of the South, many to Midwest cities where they found work in factories (Gordon 2019). Their arrival changed the demographics of the Midwest.

Black migrants to the Midwest frequently faced hostility in their new homes

As more and more Black families began settling in the Midwest, violence against the newcomers increased, often with the goal of enforcing segregationist policies. When the “second Klan”1 emerged in 1915, it also took hold in the Midwest. By the mid-1920s, 30% of U.S.-born men in Indiana were Klan members, including many state and local officeholders—all the way up to the governor (Fischer 2017; Ryan 2020).

In the first half of the 20th century, race riots—in which white people assaulted Black neighborhoods, burned Black-owned businesses, and lynched Black residents—broke out in several Midwestern cities, including Springfield, Illinois, in 1908, East St. Louis in 1917, and Duluth, Minnesota, in 1920. In Chicago, a group of white swimmers assaulted—to the point of drowning—a Black 17-year-old who had drifted across the line segregating Lake Michigan while swimming with his friends. The event set off a series of race riots during what became known as the Red Summer of 1919 (Jones 2019; Sander 2020).

As was the case in the South, white workers often resisted the entry of Black workers into blue-collar union jobs. In Detroit, 25,000 white workers at a Packard plant went on strike in 1943—in defiance of World War II no-strike orders—to protest that three Black workers had been promoted at the plant (Loomis 2018). In 1973 alone, 1,600 charges of racial discrimination by unions were filed with the Equal Employment Opportunity Commission (Windham 2017). When some white workers in unions showed solidarity with Black workers, other white people reacted violently. For example, over five days in Chicago in 1949, a white mob threw rocks at and tried to burn down the home of Aaron and Louise Bindman after Aaron, a white union leader, invited Black union stewards to his home for a meeting (Harney and Charlton 2000).

Government and businesses acted to segregate neighborhoods

In response to the growing number of Black people in the region, white lawmakers and business leaders developed a collection of systems and policies that racially segregated Midwestern cities by neighborhood (Rothstein 2017). Segregation was a means of controlling and limiting the economic freedom of Black migrants to the region, with far-reaching consequences for wealth creation, education, and health.

In the South, the agricultural system was designed so that enslavers and enslaved Black people lived in close proximity on plantations. This gave wealthy, white enslavers direct control over the lives of Black people. When, in the early Reconstruction years, Black elected officials began to gain power—and Black people could begin to take control of their own lives—backlash quickly followed. Southern lawmakers acted quickly to restore and enshrine their control and supremacy in the post–Civil War political structure. This control and supremacy is reinforced today in the South by state preemption of local laws (Blair et al. 2020).

In the Midwest, however, white supremacy took hold through segregation. Without the plantation forming the central political and economic unit, communities were separated geographically along racial lines. Through private and government housing practices, Black people were restricted in where they could live in Midwestern cities.

The real estate industry advanced segregation

Although the Supreme Court found explicit city segregation ordinances to be unconstitutional in a 1917 ruling (Buchanan v. Warley), segregation of private property nonetheless proliferated. During the 1910s, Chicago’s burgeoning real estate industry propagated the racist idea that neighborhood integration would decrease property values (Moser 2017). Race-restrictive covenants were used to prevent property in white neighborhoods from being sold or rented to Black people.

Real estate speculators also employed a tactic known as “blockbusting.” To goad fearful white residents into selling their homes below market value, these speculators would make the racist claim that a Black family moving into the neighborhood would cause home values to decline. The speculators then sold those homes to Black families at a markup. This shifted the racial demographics of neighborhoods almost overnight: The departing white families often moved to suburban enclaves that excluded people of color—marking the phenomenon known as “white flight” (Sugrue 1996).2

The use of race covenants during the 1910s and 1920s, combined with blockbusting following World War II, caused Midwestern cities such as Chicago and Milwaukee to become among the most segregated cities in the nation (Jones-Correa 2001).

Lawmakers codified segregation—and cemented the resulting inequities

Government policies also entrenched segregation. In the 1930s, the Home Owners Loan Corporation, a federal agency created by the New Deal, developed “redlining” maps that were used to prevent Black homeowners from getting mortgages for homes in white neighborhoods. At the local government level, exclusionary land-use zoning practices prohibited the construction of multifamily housing in many white neighborhoods, creating another barrier for Black families and other people of color seeking to live there.

Because of policies that allowed (even encouraged) banks to refuse mortgage loans to Black and Brown people, Midwestern suburbs are far less racially diverse, even to this day, than the big cities they surround (Gordon 2019). This has had profound effects on the economic welfare of Black Midwesterners and other people of color in the region.

Residential segregation artificially suppressed growth of property values in Black neighborhoods, which increased the relative value of properties in white neighborhoods, helping spur the enormous wealth gap between white and Black households that persists to this day (Jones 2017; Rothstein 2017). In turn, because school funding in most states has historically been derived from property taxes, this disparate growth in property values has meant dramatic differences in school funding and school quality between majority-Black and majority-white neighborhoods.

As federal civil rights legislation and court rulings began to dismantle overt, legal segregation, activists and progressive policymakers pushed for states and the federal government to treat segregation as an issue that crossed jurisdictions. They noted that patterns of segregation did not clearly match city, county, and state boundaries, and argued that there was a real need for regional policies at both the intrastate and interstate level.

Unfortunately, those advocates suffered a decisive defeat in the Supreme Court’s Milliken v. Bradley decision in 1974. Milliken ruled that neither the state of Michigan nor suburban school districts in Michigan bore responsibility for the segregated state of Detroit schools and that the lower courts did not have authority to order regionwide desegregation plans that crossed school district lines.

Decades of white flight into the suburbs meant that desegregation, by definition, would require Black and white children to cross district lines to attend the same schools. Still, the Court’s decision established that states and suburban cities had no obligation to cooperate with efforts to desegregate schools in and around large cities. In the pursuit of racial justice goals that stretched across city and county lines, localities were on their own, and the Court would not force them to work together.

This was the case across the Midwest, as the suburbs of Cleveland, Chicago, Milwaukee, and Kansas City developed in the same way as Detroit’s. White suburbs became the home of high-quality, well-funded public schools and other quality public services, while the big cities’ schools were left with fewer resources.

Reversing the effects of segregation requires state-level support for local jurisdictions’ efforts

Raising standards and ensuring equity for all workers and their families requires cooperation. In the case of school desegregation, that means coordination across municipalities, and state intervention—to ensure consistency and equity in school access and quality—would be beneficial.

Although explicit, intentional racial segregation in housing and public services has been outlawed, many of the systems that create and perpetuate segregation in the Midwest still exist. These include exclusionary zoning, disparities in education funding that privilege wealthy, predominantly suburban school districts, and overpolicing and mass incarceration in Black and Brown communities (Charles, Vock, and Maciag 2019). Consequently, Midwestern cities are the most segregated in the U.S. today (Maciag 2019).

While desegregation should be the primary end goal, state lawmakers could intervene to at least mitigate one of the largest material outcomes of segregation: inequitable outcomes across school districts. History has proved this is possible—where there is the will to do so.

A 1971 reform increased the state of Minnesota’s share of education funding by more than 50%, reducing schools’ reliance on local property taxes—in effect, shifting the cost burden of schools away from urban and rural communities and onto wealthier suburbs (Dornfeld 2007). The “Minnesota Miracle” led to decades of nation-leading academic achievement before it was dismantled, leaving the state with one of most serious education gaps in the country (Grunewald and Nath 2019).

The Milliken decision and the rollback of the Minnesota Miracle illustrate the failure of state lawmakers to intervene in local policymaking in a positive, productive, and sustained way. While these examples do not involve outright state preemption, they underscore how preemption advocates’ calls for “consistency” statewide are simply a justification for keeping standards consistently low and for denying local government the policy tools they need to address collective problems.

Ultimately, preemption of local action to raise standards and combat problems echoes the “separate and unequal” reality at the core of segregation and reinforces the very same elements of racial injustice and economic inequality that segregation does. Moreover, one of the fundamental purposes (and effects) of segregation—white leaders restricting and harming Black and Brown communities—continues to be replicated in the Midwest through state lawmakers’ abuse of preemption as they prevent, or even roll back, efforts by local governments to make life better for their residents.

Segregation and preemption intersect with other policy choices to undermine racial justice

To fully understand the harm caused by the abuse of preemption today, we must look at three particular strands of Midwest history that interacted with, and reinforced, segregation and inequality: declining investment in public services, a surge in privatization that has further tied the hands of local governments, and the precipitous decline of organized labor in the Midwest. By devaluing public goods and undermining cross-racial and class solidarity, these trends created the political environment for the abuse of preemption to occur and have magnified its harmful impact.

Declining investment in public services in the Midwest

There was a time when the Midwest had many laboratories of democracy—including progressive municipal governments, counties, and school districts that enacted policies to support working families. This is not to say that all was well, but there was certainly a time when local governments were willing and able to do a lot more.

In case after case, though, these efforts foundered on the rocks of racism. When given a choice between supporting Black and Brown families, as well as white working-class families, or abandoning good policies even when it cost all families, Midwestern political leaders too often chose the latter. Segregation enabled and even encouraged these policy choices, since underinvestment in Black communities could persist while wealthy white communities could continue to enjoy robust public investment.

Take Milwaukee, for example: In the 1950s, Milwaukee Mayor Frank Zeidler ran what Fortune magazine called the “second-best-run city in the country.” He established Milwaukee’s public television station, built affordable housing, and once blocked a freighter from Milwaukee harbor because it was carrying materials for the Kohler Company, whose workers were striking.

Zeidler’s policies, however, triggered racist backlash, with one election opponent running on the slogan, “Milwaukee needs an honest white man for mayor.” After Zeidler left office in 1960, the city stopped plans to build more affordable housing, canceled civil rights programs, and earned the nickname “the Selma of the North” (Arndorfer 1999).

Heather McGhee’s The Sum of Us (2021) ably documents the decline of municipal recreation infrastructure in St. Louis and other cities across the Midwest and the country: The Fairground Park pool in St. Louis was one of the largest municipal swimming pools ever constructed, one of thousands of such pools built by cities in the 20th century.

Within a few years of being ordered to integrate in 1949, however, the pool was closed and eventually buried underground, as were most other municipal swimming pools. Throughout The Sum of Us, McGhee details how undermining services for communities of color typically resulted in poor white communities suffering as well.

During the Midwest’s industrial heyday in the years after the Second World War, public hospitals were founded or expanded in most of the region’s major cities. These hospitals provided vital services for growing cities, made possible in no small degree by the generous insurance benefits of unionized workers.

However, as deindustrialization and white flight hollowed out Midwestern cities, governments were “not willing to continue to operate a hospital…exclusively for the poor” and began divesting the hospitals or transferring them to private operation, with concomitant risks for poor patients (Legnini et al. 1999). In the Midwest, the practical effect of this is that health care options for Black and Brown families in Midwestern cities are much worse than they are for white residents in those same cities.3

While the Great Migration may have offered Black children in the North the promise of greater economic mobility than in the South, by the mid-20th century a racial gap in upward mobility took hold in the North too. Ellora Derenoncourt (2019) documents this trend and identifies two key culprits: changes in public spending and segregation. Increasing shares of white children were enrolled in private schools in these destination cities, suggesting a “white flight” from public school districts in urban areas in response to the migration and a corresponding decline in resources devoted to the remaining public school students, including most Black students. At the same time, migration was associated with higher spending on policing targeted at neighborhoods with Black residents.

Increased privatization

An important tool in the hands of local governments is their ability to use the assets they control for the public good. Ensuring access to clean drinking water, good public schools, well-maintained parks and roads, and ample mass transit are at the core of local government functions. When well-managed, municipal assets—public works facilities, public lands, public health care facilities, and so on—can be drivers of equity.

But in the Midwest, as across the country, fiscal difficulties created by years of inadequate revenue generation led local leaders to sell public assets to private, for-profit companies, creating a short-term cash windfall at the expense of long-term investment. A study in Minnesota, for example, demonstrated that privatizing school bus services increased costs by as much as 15.8% (Thompson 2011). Chicago’s decision to privatize its parking meters for $1.16 billion gave the city a short-term windfall but meant potentially forfeiting more than $100 million in annual revenue and, according to a class-action lawsuit filed this summer, prevented the city from doing more to support public transit, ride-sharing, and bicycle use (AP 2021).

Of deeper concern than the fiscal loss is the direct harm done to people. Privatization reflects the same impulse seen in the reactions to integration, rooted in racism and classism, to discard public goods (ITPI 2016; McGhee 2021). By introducing a profit motive, privatization fundamentally changes how the value of providing a public good is determined, leading to services prioritizing meeting needs of wealthier individuals at the expense of broadly accessible services that promote healthy and safe communities, economic equality, and racial and gender justice.

Water systems

Nothing exemplifies the harms of privatization better than water. Food & Water Watch estimated in 2015 that the privatization of water systems resulted in charges to consumers 59% higher, on average, for water service than local government utilities, while also costing one in three water workers at the formerly public utilities their jobs (Food & Water Watch 2015). In the Midwest, the share of households who now get their water through a privatized water system ranges from 1% in Minnesota to 30% in Ohio and 29% in Missouri (Douglass 2017).

Flint, Michigan, is of course the ultimate horror story of water policy gone wrong. When the city’s local government was replaced by a state-appointed overseer, the source of Flint’s water was switched to the Flint River. The corrosion of old lead pipes from that river was the cause of the Flint water crisis that has caused so much harm to so many people.

Congressional testimony asserted that one purpose of the switch was to enable future privatization of the water system (Shariff 2019). A private company, Veolia, contracted to assist the overseer’s switch in water systems, knew about the risk of lead contamination in February 2015. However, the residents of Flint were not formally warned of the risk until September of that year. A lawsuit filed by the Michigan Attorney General alleged that Veolia had engaged in “professional negligence, fraud, and public nuisance” for, among other things, reporting to citizens in February 2015 that the “water is in compliance with drink water standards” when a test done on the same day the report was issued showed lead levels almost seven times higher than what is deemed safe (Holden, Fonger, and Glenza 2019).4

It will be years before we can fully catalog the harms caused by the Flint water crisis, but the lessons are clear now. When a profit motive influences public policy decisions involving public assets, the dangers are real (ITPI 2016).

Education

Privatization has also undermined another vital public service in the Midwest, the K–12 education system, through the expansion of school vouchers and charter school systems. Charter school advocates argue that channeling public resources into private schools in the name of “school choice” promotes integration; however, charter schools tend to be more racially and economically segregated than public schools (Kahlenberg, Potter, and Quick 2016; Mathis and Welner 2016).

School vouchers have their origins in Southern states, where they were used during the backlash against school integration in the 1950s and 1960s to effectively establish a publicly funded private school system for white children and undermine investments in the public schools still serving Black communities (Ford, Johnson, and Partelow 2017).

In recent years, Midwestern states have been at the forefront of expanding school voucher programs and charter school systems. Indeed, the very first charter school in the country was City Academy in St. Paul, Minnesota, founded in 1992 after Minnesota passed the nation’s first law sanctioning charters (Sanchez 2012). The Wisconsin state legislature targeted the Milwaukee School District in 1989 with the first modern school voucher program in the country, and Indiana established the first statewide school voucher program for low-income students in 2011 (Cunningham 2016).

Indiana’s voucher program, already one of the broadest programs in the nation when it was established, was further expanded by lawmakers in 2013 under then-Gov. Mike Pence. Eligibility was extended to some middle-income families, as well as to some children who had never attended a public school (i.e., children who had previously only attended private schools or been home-schooled). Following these changes, the share of students using vouchers who were Black declined while the share who were white increased (Peers McCoy 2021; Turner 2017).

Wisconsin has also greatly expanded its voucher system since its inception, including in the 2015 budget passed by the Republican state legislature and signed by Gov. Scott Walker. The budget simultaneously seriously reduced K–12 education funding and eliminated the state’s only program intended to desegregate public schools (Strauss 2015).

Like preemption, the long-term trend of privatization of public services at the local government level limits the options available for local policymakers to take action to improve the lives of working people and advance racial and gender justice.

Organized labor’s decline

As public services were undermined in the Midwest, so was another force for collective good: unions. Organized labor, like local government, is a structure in which groups of people united by a common stake can exercise their collective power to better their communities.

The benefits of unions for workers and their families are clear: Unionized workers tend to have higher pay, better benefits, and a stronger voice in their workplace (McNicholas et al. 2020). Workers covered by a union contract are paid, on average, 11.2% more than workers in similar jobs with similar education and experience. Unionization makes an even bigger difference for Black and Latinx workers, who are paid 13.7% and 20.1% more, respectively, when covered by a union contract.

However, unions are too often thwarted by those in power who stand to benefit from the economic exploitation of others. Like preemption, the concerted efforts of private interests to undermine unions can deny workers a voice and limit their ability to advocate for shared prosperity.

A brief history

The benefits of unions for workers and their families are clear: unionized workers tend to have higher pay, better benefits, and a stronger voice in their workplace (McNicholas et al. 2020). Workers covered by a union contract are paid, on average, 11.2% more than workers in similar jobs with similar education and experience. Unionization makes an even bigger difference for Black and Latinx workers, who are paid 13.7% and 20.1% more, respectively, when covered by a union contract.

Heading into the 1980s, strong labor unions supported better economic conditions for working families in the Midwest—especially Black and Brown workers, who were more likely to be covered by union contracts than white workers (Rhinehart, Windham, and Mishel 2020). Union density—the share of workers in a union or covered by a union contract—was higher than the U.S. average in six of the nine states we look at in the report, and the three most populous states—Illinois, Ohio, and Michigan—were among the top 10 in the country for union density.5

Between 1983 and 2020, however, the Midwest experienced a decline in labor unions far more severe than the overall national decline. Only one Midwestern state, Minnesota, remains in the top 10 states for union density. This decline is the direct result of policy and corporate practices that undermine worker power.

So-called right-to-work laws undermine unions

Eight Midwestern states (North Dakota, South Dakota, Nebraska, Kansas, Iowa, Wisconsin, Michigan, and Indiana) have so-called right-to-work (RTW) laws, which weaken unions by requiring them to represent workers who are not union members and who do not pay “fair share fees.” “Fair share fees”—paid by workers who are covered by a union contract but are not dues-paying union members—help with the cost of negotiating and administering collective bargaining agreements (NCSL 2021).

Most RTW laws in the Midwest were passed either in the 1940s or 1950s, as housing segregation was becoming prominent, or during a more recent wave from 2012 to 2015. Like so many other efforts to entrench white supremacy, RTW laws had their roots in the Jim Crow South before being exported to the Midwest (Kromm 2012).

Employer tactics undermine unions

The decline in unionization also reflects employer tactics, both legal and illegal, to unfairly defeat or deter union campaigns—tactics that are enabled by inadequate and weakly enforced federal labor law (Rhinehart, Windham, and Mishel 2020). Those in power have an economic incentive to use such tactics, and it pays off, at least for some: Nationally, the decline in union density was mirrored by a precipitous rise in the share of income going to the top 10%, shown in Figure A.

Figure A

Implications for racial justice and equity

Unions are important mechanisms for working people to demand better and fairer economic outcomes, and membership in a union has been shown to reduce a white person’s feelings of racial resentment (Frymer and Grumbach 2021). The decline of unions has made it easier for the political right to sow racial division and use it to advance an agenda that benefits the wealthy. The policy decisions we document in the following case studies—decisions that hurt all working people, but particularly workers of color, women, and immigrants—likely met with less resistance because of the decline of unions.

Case studies

Segregation, disinvestment from public services, and the weakening of collective bargaining rights are all the result of deliberate past policy choices. This history has undermined cooperation and shared prosperity and has left Midwesterners with fewer policy tools to promote economic security and justice. While the stage was set long ago, today’s state policymakers are reinforcing these same long-standing trends by abusing preemption, further limiting the options available to local governments to improve the lots of their communities.

The following case studies from across the Midwest document how the misuse of preemption stifles local policies aimed at improving the lives of working people, in particular those who are paid lower wages. The policies these cases focus on would also have helped to build more equitable communities by disproportionately benefiting people of color, women, and immigrants, who have been economically marginalized by systemic racism, sexism, and xenophobia.

We also show in these case studies that the state legislatures enacting these preemption laws do not represent the demographics of the cities whose ordinances they are preempting. Rather, this troubling trend echoes a long history of white, male voices dominating policy decision-making.

Minimum wage: St. Louis and Kansas City, Missouri

In the summer of 2015, lawmakers in both St. Louis and Kansas City, Missouri, raised their local minimum wages. That same summer, the state legislature preempted future local minimum wage increase ordinances, while business leaders in Kansas City filed for a referendum to overturn the city council’s ordinance. This delayed the ordinance from taking effect and, coupled with the preemption bill, ultimately killed the minimum wage increase. Although the St. Louis bill took effect briefly, state lawmakers passed a second preemption bill in 2017—and the second bill was retroactive, nullifying the St. Louis measure. In both St. Louis and Kansas City, higher shares of the population are people of color than statewide.

The federal minimum wage was last raised in 2009 to $7.25, where it remains today. Every year the minimum wage is left unchanged, inflation erodes its purchasing power. Indeed, congressional neglect of the federal minimum wage has led to a 31% decline in its value since its high point in the late 1960s (Cooper, Mokhiber, and Zipperer 2021).

In response to this inaction at the federal level, more than half of U.S. states and many cities have set minimum wages above the federal standard (see EPI 2021). This includes Missouri, which in 2006 adopted a ballot measure to raise the state minimum to $6.50 and index it to inflation—i.e., to automatically adjust the state minimum wage each year thereafter to reflect changes in consumer prices over the preceding year.

The federal increases that took place in 2008 to $6.55 and $7.25 in 2009 superseded the minimum wage level determined by Missouri’s indexing formula, but by 2013 the inflation-linked value of the state minimum wage set in 2006 rose above the federal $7.25. When that occurred, Missouri’s state minimum wage began rising modestly above the federal minimum. By 2015, the state minimum wage was $7.65.

Kansas City and St. Louis sought to raise their minimum wages

In July 2015, the city council in Kansas City, Missouri, voted 12–1 to pass an ordinance establishing a city minimum wage of $8.50 per hour, effective August 24, 2015. The measure would have gradually raised the city minimum wage to $13 by 2020 (Horsley 2015). However, roughly two weeks after the city council vote, a coalition of business groups filed a petition with the city clerk’s office for a referendum on the ordinance—a move that, under the city’s charter, effectively blocked the ordinance from taking effect until the referendum could be voted on in a city election, which would likely have taken place the following spring had the state legislature not preempted local minimum wage increases first (KCUR 2015).

Separately, in August 2015, aldermen in St. Louis voted 16–8 to establish a city minimum wage of $8.25 per hour, effective that October. The measure would have gradually raised the city minimum wage to $11 per hour by January 2018 (Pistor 2015). In September, business groups sued the city, and the day before the measure was scheduled to take effect, a St. Louis district court blocked the higher minimum wage from being implemented. Lawmakers from the city appealed to the state supreme court.

Missouri state lawmakers acted to preempt local minimum wages

While elected leaders in these two cities were passing higher local wage floors with broad support, they faced challenges not only from businesses, but also from lawmakers at the statehouse in Jefferson City who were working to take away their ability to enact such measures. In May, the Republican-controlled state legislature passed a bill, H.B. 722, that preempted any local government from establishing a minimum wage higher than the state minimum wage. The governor at the time, Democrat Jay Nixon, vetoed the measure, but the legislature subsequently overturned Nixon’s veto later that September.

Notably, the 2015 minimum wage preemption law stipulated that local ordinances enacted prior to August 28, 2015, would not be preempted by the state law. This should have saved Kansas City’s minimum wage ordinance. But because Kansas City’s ordinance was blocked from full enactment by the business groups’ ballot petition, and an election to vote on the measure could not have been held prior to the August 28 deadline, the Kansas City minimum wage was effectively dead (Newill 2015).

However, St. Louis’s minimum wage ordinance—despite being blocked from taking effect as scheduled—was still in legal limbo as the city’s appeal to the state supreme court was being considered. In February 2017, the Missouri Supreme Court ruled that St. Louis’s minimum wage ordinance was legal and, because it had passed prior to the August 2015 deadline set in the state’s preemption law, it would be allowed to take effect later that year. On May 5, 2017—more than a year and a half after its original October 2015 start date—the St. Louis minimum wage ordinance took effect, setting a local minimum wage of $10 per hour (the amount the measure had stipulated would be effective on January 1, 2017).

Sadly, the St. Louis minimum wage was short-lived. On May 12, 2017—exactly one week after the ordinance took effect—the Republican-controlled state legislature passed a new preemption law that specifically targeted the St. Louis measure by outlawing all local minimum wage laws, regardless of when they were enacted. Missouri’s new Republican governor, Eric Greitens, opted to neither sign nor veto the bill, which, under Missouri’s constitution, allowed the bill to become law. Consequently, on August 28, 2017, the minimum wage in St. Louis dropped from $10 an hour to the state minimum wage of $7.70 per hour (Park 2017).

A predominantly white, male state legislature blocked ordinances that would disproportionately benefit women and people of color

Both of these cases reflect the common preemption pattern of a majority-white state legislature overruling the will of local communities that are either majority or disproportionately people of color (Blair et al. 2020). As shown in Appendix Table 1, Missouri’s state legislature is 88% white, yet the population of Kansas City is only 52% white and St. Louis is majority people of color, with only 44% of its population being white.

Both instances also represent cases of state lawmakers undermining local officials’ ability to implement public policies that reduce harm and combat social problems. St. Louis and Kansas City have significantly higher poverty rates than the state overall.6 Raising the local minimum wage was an appropriate policy response, given that higher minimum wages have been shown to have direct poverty-reducing effects (Dube 2019). Yet this tool was taken away from Missouri’s local policymakers by state lawmakers who may have little awareness of, or shared experience with, the communities they are denying self-governance.

Table 1, adapted from Cooper 2017, shows that Missouri’s preemption law undermined potential raises (in 2018) for an estimated 38,300 workers in St. Louis, 15.2% of the city’s total workforce. Of those workers who would have received a raise, 51.2% were Black and roughly one in 10 (9.9%) were Latinx, Asian American/Pacific Islander (AAPI), or some other race or ethnicity. Again, this starkly contrasts with the demographics of the state legislature, which is 88% white. Similarly, the table also shows that 56.1% of the workers who would have benefited from the city’s minimum wage law were women—another striking departure from the composition of the state legislature, where 75% of lawmakers were men (see Appendix Table 1).

Table 1

The preemption of Kansas City’s minimum wage similarly denied a raise to an estimated 52,000 workers—20.6% of wage-earners in the city. Table 2 describes the Kansas City workforce that would likely have received a raise had the city’s ordinance not been undone by state lawmakers. Although the majority of workers who would have received pay increases were white, workers of color would have disproportionately benefited: Nearly one in five white workers in the city (18.6%) stood to benefit, while 27.5% of Black and 24.9% of Latinx workers would have received a raise.

Table 2

In St. Louis and Kansas City combined, 90,000 workers were directly denied higher pay by the actions of the Missouri state legislature. In all likelihood, many more workers throughout the state also missed out on larger paychecks, as the higher wage floors in these two cities would have put pressure on employers elsewhere in the state to raise pay—and other localities might have followed suit and raised their minimum wages.

Missouri voters advocated for workers

Fortunately, Missouri’s lowest-paid workers did ultimately receive raises, as a voter-driven initiative to raise the statewide minimum wage passed in 2018. The measure will raise the statewide minimum wage to $12 by 2023 and index it to inflation thereafter.

Minimum wage: Johnson, Linn, Polk, Wapello, and Lee Counties, Iowa

In March 2017, Iowa state lawmakers passed a law preventing localities from enacting a higher minimum wage and nullifying existing local minimum wage laws. In the two years prior, four counties had raised their minimum wages and at least one other was poised to do so just before the preemption bill was passed. A majority of the workers who would have gotten a raise were women.

In 2006, when Congress amended the Fair Labor Standards Act to establish the schedule of increases that would bring the federal minimum wage to $7.25 by July 2009, lawmakers in Iowa decided they need not wait that long. In 2007, the state legislature passed—and Gov. Tom Vilsack signed—a minimum wage increase that took the state minimum to $7.25 by January of 2008. But in the years that followed, the state minimum wage—like the federal minimum—was left to languish.

Five Iowa counties took action to raise their minimum wages

In September 2015, after seven years of decline in the purchasing power of the state minimum wage, the Board of Supervisors in Johnson County—home of Iowa City—voted to enact a county minimum wage of $8.20 per hour, effective November 1. The measure specified the county minimum wage would gradually increase to $10.10 per hour by January 2017 and would be indexed to inflation thereafter, with automatic increases beginning in July 2018. The measure was a success, lifting pay for more than 10,100 workers in Johnson County as its minimum wage rose. The majority (56%) of affected workers were women, nearly 80% were adult workers ages 20 or older, and most had at least some college experience (IPP 2015).

Seeing the success of the Johnson County ordinance, county supervisors in neighboring Linn County—home to Cedar Rapids, the second-largest city in the state—enacted their own county minimum wage in September 2016 (Moore 2016). The ordinance set a county minimum wage of $8.25 in January 2017, with subsequent increases to $10.25 by January 2019. An analysis by Peter Fisher (2016) at the Iowa Policy Project estimated that the Linn County measure would raise wages for upward of 18,400 workers in the county. As in Johnson County, most of the Linn County workers who would benefit were women (54%) and adults at least 20 years old or older (80%).

The day after the Linn County measure was passed, the county board of Wapello County—a much smaller, more rural county in southeast Iowa—voted to enact their own county minimum wage of $8.20 per hour, effective January 1, 2017, with subsequent increases to $10.10 by January 2019 (AP 2016). However, this measure was weakened when lawmakers in Ottumwa, the largest city in the county, voted to opt out of this county-level minimum wage increase (Whitaker 2016).

As shown in Table 3, if fully enacted across the county, the Wapello County measure would have likely raised wages for 2,200 workers—one in six workers in the county. The Wapello measure is especially noteworthy because incomes in Wapello are significantly lower and poverty rates noticeably higher than in much of the rest of the state—meaning that the minimum wage increase there would likely have had a more significant impact on the welfare of local working families.

Table 3

Momentum for raising wage standards in Iowa was clearly building, and the Wapello County measure was not the end. In October 2016, the Board of Supervisors of Polk County—Iowa’s most populous county and home to the state capital, Des Moines—voted to establish a local minimum wage of $8.75, starting in April 2018, with subsequent increases that would have brought the minimum wage to $10.75 by January 2019. The measure would have directly lifted pay for over 38,000 workers, about 15% of workers in Polk County.

County supervisors in Lee County, another more rural county in the southeast corner of the state, also began working on a local minimum wage ordinance that would ultimately be passed in March 2017 (Radio Iowa 2017). That measure would have raised pay for 2,100 workers, 14% of the county workforce.

Iowa state lawmakers halted the minimum wage momentum

By early 2017—with four counties having recently passed higher wage standards, and Lee County heading in that direction—one might expect state lawmakers to recognize the evidence of a need and public desire for a statewide minimum wage increase. Indeed, a 2014 poll of Iowans showed nearly two-to-one support for raising the state minimum wage above $7.25 (Jacobs 2014). But instead, state lawmakers chose to move in the opposite direction.

On March 30, 2017, Republican Gov. Terry Branstad signed HF 295, a bill passed by the Republican-controlled Iowa legislature that preempted local governments from establishing any labor standards that differed from state law, including higher minimum wages. The law applied to all existing and future local ordinances, making Iowa the first state in the country to nullify an existing local minimum wage law that had already taken effect (Hirsch 2017). (Missouri followed suit two months later.)

The Iowa case is revealing, as it shows how state lawmakers had no qualms—and seemingly suffered few political consequences—for contradicting the expressed preferences of a majority of state residents on an issue that was clearly gaining traction across the state.

A majority-men state legislature denied raises to a majority-women low-wage workforce

The Iowa case demonstrates how state preemption can reinforce not just racial hierarchies, but gender ones as well. Women are far more likely to be employed in low-paying jobs and would have benefited disproportionately from the Iowa local minimum wage ordinances.

Table 3 shows the gender composition of each Iowa county’s workforce and the workers who would have benefited from the local minimum wage measures. In every county, a majority of the workers who would have gotten a raise were women, and in Lee and Wapello Counties, women would have benefited at more than twice the rate of men. Yet tens of thousands of women workers in these counties were denied pay increases by a state legislature that was majority men (NCSL 2020).

Preemption’s use as a tool for reinforcing white control over communities of color was present in Iowa, although the racial differences were less pronounced. As of 2019, the state was 85.7% white, yet as of 2020, the state legislature was 96% white (see Appendix Table 2). American Community Survey data show that the populations of Wapello County, Johnson County, and Polk County are 81.0%, 78.0%, and 77.0% white, respectively—still majority white, but with substantial Black, Latinx, and AAPI populations. The racial makeup of Linn and Lee Counties are similar to the overall state composition.

Fair scheduling: Detroit, Michigan

In 2015, the Michigan state legislature passed a law, monikered the “Death Star Bill” by opponents, that prohibited local governments from implementing a range of policies that would benefit workers, including fair scheduling regulations, paid leave mandates, local minimum wages, and prevailing wage laws. Fair scheduling could benefit 38,702 retail and food service workers in Detroit; 77.4% of those workers are Black.

Michigan’s state legislature took a particularly aggressive approach when they passed a sweeping anti-worker preemption bill in 2015.7 Known by its opponents as the “Death Star Bill” for its complete destruction of local authority, this bill preempted local governments from enacting a broad slate of pro-worker policies. It targeted regulations that would benefit low-income workers and workers of color, such as minimum wages, fair chance hiring or “ban-the-box” laws, and mandated employee benefits such as paid leave. The legislature took clear aim at workers by including measures against union organizing, strikes, wage disputes, and apprenticeships in the list of prohibited local policies.

Local fair scheduling regulations were among the many policies targeted by the Death Star Bill.

Fair scheduling laws mitigate employer practices that can wreak havoc in workers’ lives

Fair scheduling laws require that employers give advance notice of worker schedules or provide additional pay to employees when their schedules are changed without adequate notice. These laws typically aim to improve scheduling practices in low-wage sectors such as retail and hospitality.

By prohibiting its cities and counties from enacting such laws, Michigan is preventing communities from adopting labor standards that would disproportionately benefit women and workers of color, who are far more likely to hold positions subject to erratic scheduling (Rothstein and Morsy 2015).

The COVID-19 pandemic has shown that life can be challenging and unpredictable, especially in the midst of a personal health crisis or when schools and day cares close unexpectedly. Having some say in their work hours gives workers the ability to manage the challenges that life poses, whether it is scheduling doctor’s appointments, arranging for child care, or just going grocery shopping, while mitigating negative effects on their economic security.

However, many workers, especially hourly workers and workers who are paid low wages, are subject to unpredictable schedules (Vogtman and Tucker 2017). Under the guise of flexibility, employers leverage technology to make last-minute and inconsistent scheduling decisions. The result is that workers are required to give up their own freedom and flexibility (Corser 2019).

These unfair scheduling practices can take many forms, often used in combination, compounding their negative effects. Some employers use “just-in-time” scheduling—the practice of using computer algorithms to make last-minute staffing decisions in response to anticipated changes in demand. Another tactic is on-call scheduling: Workers are asked to stay available, generally without compensation, but are not told whether they are required to come in until a few hours before the shift. Alternatively, workers may be scheduled for a full shift but then sent home early with no notice, depriving them of expected income while still requiring them to make child care, transportation, or other arrangements. Workers may also be asked to work unreasonable shifts, for example, a “clopening”—a late closing shift followed by an early opening shift (Vogtman and Tucker 2017; Schneider and Harknett 2019).

Each of these practices is widespread within the retail and food service industries (Schneider and Harknett 2019). While unfair scheduling is certainly not limited to retail and food service, most fair workweek laws do focus on protecting workers in those industries (Wolfe, Jones, and Cooper 2018).

Unpredictable scheduling practices wreak havoc in workers’ lives. To keep their jobs and satisfy their employers’ scheduling whims, workers must plan their time, spending, and savings around these inconsistent (and often insufficient) hours. Unpredictable scheduling can negatively impact workers’ access to child care and health care. It can be time-consuming to find and apply for an open spot in a day care center, and day cares often require consistent drop-off schedules. And doctor visits require advance appointments. Enrolling in additional training and education can be nearly impossible when you are required to “stay available” for shifts (Vogtman and Tucker 2017). Even when compared with peers with similar wages, retail and food service workers with less predictable schedules were more likely to experience material hardship, such as going hungry or being unable to pay bills (Schneider and Harknett 2019).

Furthermore, unfair scheduling practices can make it difficult to schedule job interviews or shifts at other jobs, preventing workers who are part time but would like to work more hours from getting full-time work or another part-time job (Golden 2015). Part-time work and lower hours are more prevalent in wholesale and retail trade, as well as in leisure and hospitality (which includes restaurants), than in the overall workforce. At the same time, part-time workers in these industries are also more likely to want full-time work than their peers in the overall workforce (BLS 2021b).

Retail and food service workers of color, and particularly women of color, are more likely to experience unstable schedules than their white peers, an inequity that persists even when controlling for other demographic characteristics and education (Schneider and Harknett 2019).

Because of the clear importance of predictable scheduling to workers, a number of cities and one state have adopted scheduling fairness laws. As of 2018, 1.8 million workers in New York City, San Jose, Seattle, San Francisco, Emeryville (California), and the state of Oregon were protected by fair workweek laws that focused largely on retail and fast-food workers (Wolfe, Jones, and Cooper 2018). In 2020, fair workweek protections took effect in Chicago and Philadelphia, with Chicago’s ordinance covering workers in health care facilities, building services, and hotels in addition to restaurant and retail workers (HR Dive 2019).

Majority-white state legislature denied the right of a majority-Black city to pass fair scheduling laws

By preempting fair scheduling laws, the Michigan state legislature denied local governments the opportunity to protect those who work in retail and food service, not to mention workers in other industries who would stand to benefit from broader fair workweek protections.

In particular, if Detroit, a majority-Black city, were to enact fair workweek legislation, 38,702 nonmanagerial workers in retail and food service would stand to benefit, as shown in Table 4. The vast majority (29,943, or 77.4%) of those workers are Black. Women also stand to benefit from a fair workweek law focused on these industries, since they make up over half of this workforce. This is especially true in the retail industry, where 80.2% of nonmanagerial workers are Black and 57.2% are women.

Table 4

This state interference not only has an outsize impact on Black and women workers, but it also strips Detroit, a majority-Black city, of the authority to make material improvements in the lives of their constituents with policies that the majority-white state legislature has not taken up. More than three in four (77.4% of) Detroit residents are Black, while the statewide population is 75.0% white (see Appendix Table 3). The state legislature, which is 78% white, is not representative of Black workers and the population whose power they are usurping.

A Michigan state senator is pushing back on the Death Star Bill

In hopes of restoring local authority to address working conditions and economic security, Michigan State Senator Winnie Brinks introduced a bill last June to repeal the Death Star Bill.8

Paid sick leave: Indianapolis, Indiana

In 2013, Indiana state lawmakers passed a bill preventing localities from mandating paid sick leave and other employee benefits. Given the particularly low rates of paid sick leave access in the Midwest, many workers would stand to benefit if a city like Indianapolis were able to mandate that employers provide paid sick leave.

When workers do not have access to paid sick leave, they are forced to choose between their economic security and the health of themselves and their families. The workers who are the most economically precarious, who stand to lose the most by missing a day of earnings, are also the least likely to have access to paid leave. Just one in three workers in the lowest-paid 10% of occupations has access to paid sick leave, compared with 95% among the highest-paid 10% (BLS 2020).

The coronavirus pandemic made many realize the public health implications of going to work while sick—a realization that should underscore the importance of paid leave, even during “normal” times. Forcing service workers to work while ill poses an increased contagion risk to the greater community (NPWF 2021). And yet essential workers with a high degree of close contact with others—particularly in food services and personal care occupations—are especially unlikely to have access to paid sick days (IWPR 2016).

Status of paid sick leave laws in the Midwest

Despite the critical importance of paid sick leave, Indiana and six other Midwestern states—Iowa, Kansas, Michigan, Missouri, Ohio, and Wisconsin—have acted to prevent localities from passing laws mandating that employers provide paid sick leave (EPI 2019). The Midwest lags behind other regions when it comes to paid sick leave access, as does the South. More than one in four workers in those regions (27% in the Midwest and 28% in the South) lack access to paid sick leave, compared with 19% and 12% in the Northeast and West (BLS 2020).

In Illinois and Minnesota, two Midwestern states without paid leave preemption, local governments have passed laws requiring paid sick days. It is likely that other Midwestern cities would follow the examples set by Chicago, Duluth, Minneapolis, and Saint Paul if their states’ abuse of preemption were not standing in the way (ABB 2021b).

Just one Midwestern state, Michigan, has passed a statewide paid sick leave law; however, the law left a majority of workers without protection because it excluded large groups of workers, such as those at smaller businesses and those who had been at their job less than a year (Ruark 2018).

Indiana acted preemptively to prevent local governments from passing paid sick leave

In 2013, Indiana’s state legislature passed a bill preventing localities from mandating employee benefits, including paid sick days.9 This legislation was nearly identical to a May 2011 bill passed by Wisconsin’s Republican legislature preempting local paid sick leave laws. The Wisconsin bill aimed to knock out a Milwaukee ordinance that had won over nearly 70% of voters in a 2008 referendum and that had been deemed constitutional by a state Court of Appeals in March 2011 (Forward 2011). Wisconsin lawmakers succeeded in their aim and the ordinance never went into effect (Milwaukee Business Journal 2011).

Wisconsin’s preemption bill was circulated that summer at the 2011 American Legislative Exchange Council meeting, where ALEC members from the private sector and state legislatures collaborate on and disseminate model bill language. These bills cover wide-ranging issues, including gun control, housing policy, and immigration, and often feature preemption (Jackman 2013; Winig and deVuono-powell 2019). ALEC’s promotion of the Wisconsin paid leave preemption bill worked as intended. Other states, including Indiana, soon passed similar laws (Grabar 2016).

As shown in Table 5, nearly 200,000 Indianapolis workers—or 41.8% of the city’s workforce—would gain paid time off when sick if the city council were to enact a leave mandate. More than two in five (42.0%) of the workers who would benefit are people of color. In particular, about a quarter (24.5%) are Black. Since Latinx workers are least likely to have access to paid sick days—56.4% do not have access—they would be most likely to benefit from a leave mandate.

Table 5

This bill was not the first time Indiana lawmakers prevented progress on workers’ rights issues, nor was it the last. They had already, in 2011, forbidden local governments from establishing their own minimum wages.10 Prevailing wage and ride-share standard preemption followed in 2015.11 The state legislature also preempted fair scheduling requirements in 2016, one year after the Indianapolis City Council adopted a nonbinding resolution supporting a Retail Workers Bill of Rights calling for fair scheduling along with better pay and benefits (Eason 2016).12

Indiana’s state legislature is not demographically representative of Indianapolis

The Indiana state legislature’s thwarting of Indianapolis’s local authority is particularly disappointing since the lawmakers do not demographically represent the Indianapolis population. More than a quarter (27.7%) of Indianapolis residents are Black and one in 10 is Latinx (See Appendix Table 4). Yet the vast majority (89%) of the Indiana state legislature is white.

By blocking paid sick leave measures, Indiana lawmakers have prevented local policies that would help workers and their families manage individual health crises and that would have public health benefits. Cities should be able to lead the way, especially in the face of inaction at the state level, with policies that guarantee workers a right to paid sick leave, including additional paid time off available during public health emergencies (ABB 2021a).

Targeted and local hire laws: Cleveland, Ohio

In 2003, the Cleveland City Council passed the Fannie Lewis Law, which required that Cleveland residents be hired to perform 20% of the labor hours on public construction projects. State lawmakers passed a law in 2016 that prohibited regional or local hiring requirements or incentives, preempting the Fannie Lewis Law. The city of Cleveland challenged the 2016 preemption law, but the state law was upheld by the Ohio Supreme Court in 2019. If the Fannie Lewis Law were reinstated, it would result in more opportunities for Black and Latinx construction workers from Cleveland.

Targeted and local hiring policies support job opportunities for those who need them most by requiring that a minimum percentage of work hours created by a development project be set aside for job-seekers from low-income communities within a city or county, especially low-income communities of color. These policies provide good jobs to local residents in communities that often experience unfair barriers to employment, including being denied job opportunities due to systemic racial discrimination in hiring practices (Cornejo, Chen, and Patel 2018; Quillian et al. 2017).

Cleveland passed Fannie Lewis Law requiring local and targeted hires on construction projects

In 2003, the Cleveland City Council passed the Fannie Lewis Law, named for its champion who served on the city council from 1980 until her death in 2008 (Tobin 2008).13 It required that 20% of the labor hours on public construction projects valued at $100,000 or more be performed by Cleveland residents, with 4% of the total hours set aside for low-income residents.

As a result, Cleveland construction workers were paid a cumulative $232 million for their work on publicly funded projects in the first 10 years that the law was on the books (WKYC Staff 2019). Between 2013 and 2017, Cleveland residents and low-income workers worked 24% and 9% of all construction hours, respectively, which was above and beyond the requirement (Ma 2019).

Ohio General Assembly passed law forbidding local hire laws

In 2016, the Ohio General Assembly forbid local laws requiring or incentivizing contractors to hire local construction workers.14 The city of Cleveland promptly responded by suing the state of Ohio, arguing that their local authority was protected by the Ohio constitution. Although a lower court and court of appeals granted and upheld a permanent injunction to keep the Ohio bill from being enforced, the Supreme Court of Ohio ultimately overruled them and the state law took effect in 2019 (Thompson Hine LLP 2019). Local labor leaders expressed their disappointment at the decision and their hope that contractors would take voluntary action to continue to give Cleveland’s construction workers better access to these publicly funded jobs going forward (CBCTC 2019).

In the same year they passed the bill targeting local hire laws, the Ohio General Assembly also preempted several other workers’ rights measures: fair scheduling, paid leave, and ride-sharing regulations.15 They also passed a law preempting local minimum wage increases, keeping a proposal to increase Cleveland’s minimum to $15 an hour off the ballot in 2017 (Pelzer 2016).16

Majority-white legislature took power away from communities that are majority people of color

This is another example of a state legislature stepping in to block welfare and equity-enhancing policy choices made by communities of color and the local lawmakers who represent them. In Cleveland, most residents (66.0%) are people of color and nearly half (47.9%) are Black. By comparison, 82% of state legislators in Ohio are white. Just 14% of Ohio state legislators are Black and 2% are Latinx. (See Appendix Table 5.)

Guaranteeing that 20% of construction work hours on municipally funded projects go to Cleveland residents, as the Fannie Lewis Law did, would substantially increase the chances of Black and Latinx workers being hired for this work. As shown in Figure B, nearly one in five construction workers living in Cleveland (18.8%) are Latinx, compared with 5.3% statewide. The trend is even more pronounced for Black workers, who account for about three in 10 construction workers in Cleveland (29.5%) and just 4.7% in Ohio.

Figure B

Prevailing wage: Kansas City, Kansas

In 2013, Kansas Gov. Sam Brownback signed HB 2069, a law banning all local governments in the state from requiring prevailing wages for workers on public construction projects. The law preempted prevailing wage ordinances in Sedgwick and Wyandotte Counties, disproportionately lowering the wages of Latinx, Black, and immigrant construction workers there.

Prevailing wage laws set wage standards in the construction contracts that cities or counties enter into with private contractors for city or state construction projects. They require that contractors pay their workers at least the prevailing wage in the city or county for the type of work being contracted. The policies’ definitions of “prevailing wage” vary from location to location, although they generally reflect a commonly held or dominant wage.

How prevailing wage laws protect workers—and benefit taxpayers

The rationale for prevailing wage laws is straightforward: Communities do not want public contracts to drive down local wage standards. Because contractors typically must bid to work on public projects, without a prevailing wage requirement firms may cut wages in order to win contracts. This not only harms employees of the individual construction firm, but it also pushes down wages throughout the industry as rival firms respond with similar cuts when making their bids. Prevailing wage laws preserve wage levels for construction workers and ensure that contractors compete for government projects based on efficiency, management skill, material costs, and the productivity of a firm’s employees.

In other words, prevailing wage laws help ensure that public funds are used to create strong middle-class construction jobs and pursue a high road of economic development that supports workers and good employers.

Research shows that construction workers in jurisdictions with prevailing wage laws earn substantially more than their counterparts in places without such laws. Eisenbrey and Kroeger (2017) find that construction workers in states with prevailing wage laws are typically paid 13% to 22% more per hour than construction workers in states without prevailing wage laws.

In addition to benefiting the workers on public projects, prevailing wage laws create several benefits for taxpayers. Projects under prevailing wages are more likely to hire locally, create increased tax revenue for local governments, and boost total economic activity (WP USA 2011; Mahalia 2008).

There is also a large body of evidence that prevailing wages achieve these benefits without increasing overall project costs (Hinkel and Belman 2020; Duncan, Phillips, and Manzo 2017). In a study of the preemption of prevailing wage laws in Kansas, Kelsay (2016) found no significant difference in construction costs before and after the repeal of prevailing wage laws. Prevailing wage laws can increase wages and still keep costs low because higher wages attract more highly skilled workers and incentivize investment in the apprenticeship of more skilled workers. These workers are more productive, making projects more efficient. Studies show that prevailing wages incentivize cost saving through greater management skill and decreased material costs.

How Kansas’s preemption of prevailing wage hurt workers

The 2013 Kansas state law HB 2069 nullified existing prevailing wage laws in Wyandotte County (home to Kansas City) and Sedgwick County (home to Wichita).

If these laws had not been preempted by the state law, pay would be higher for thousands of local construction workers in these counties, including many workers of color. For workers in Kansas City (which accounts for more than 90% of Wyandotte County’s population), the median annual wage of construction workers was $34,088 in 2020—13.0% less than the median Kansas construction worker’s wage, as shown in Table 6, and 10.0% less than the national median of $37,890.

A Kansas City prevailing wage law would lift pay for an estimated 6,209 construction workers in Kansas City. If their wages rose by the 13% difference (low estimate) identified by Eisenbrey and Kroeger (2017), it would translate to an hourly wage increase of $2.35, which translates to $4,886 annually for a full-time, full-year worker.

Table 6

Majority-white legislature took prevailing wage protections away from Kansas City’s majority-Latinx and majority-immigrant construction workforce

The construction industry’s workforce in Kansas City is primarily composed of people of color and is majority (61.7%) Latinx. More than half (54.1%) of construction workers in the city are immigrants. White construction workers in the state are typically paid more than other workers, earning an hourly wage of $22.59 compared with $17.49 for Latinx workers. While U.S.-born workers in Kansas City are paid $22.40 per hour, immigrant workers without U.S. citizenship are paid 32.9% less, at $15.03 per hour.

Whereas Kansas’s legislature is 92% white, and the state population overall is 75.9% white, Kansas City is majority (59.0%) people of color (see Appendix Table 6). The majority-white legislature’s preemption of prevailing wages denies Kansas City the ability to raise wages for its own workers, undermining a path for workers of color and immigrants to achieve greater economic security. Based on Eisenbrey and Kroeger’s 2017 analysis, a prevailing wage in Kansas City would mean a $2.02 hourly wage increase for a Latinx construction worker—up to $4,209 more annually. A prevailing wage would also benefit the city’s immigrant workers, who would earn $4,065 more annually working full time and full year.

The prevailing wage preemption is part of a larger pattern of workers’ rights preemption in Kansas

Despite the benefits of prevailing wages to workers and the state, state lawmakers in Kansas chose to interfere with localities’ ability to set their own labor standards. Unfortunately, this was not the only time during the last decade when they preempted local decision-making that would create good jobs using public dollars. In 2012, the state banned the use of project labor agreements on construction projects.17 In 2013, in addition to banning prevailing wages, Kansas prohibited local governments from requiring employers and contractors to give paid leave or any other employee benefit to their employees.18

This is part of a larger trend of workers’ rights preemption in Kansas, with the effects reaching well beyond public employees and contractors. The 2013 bill also prohibited local governments from increasing the minimum wage beyond the state minimum—which has remained stuck at the federal minimum wage of $7.25 per hour since 2009. Since 2013, state lawmakers have continued to interfere with local decision-making by passing a law in 2015 to preempt localities from regulating the gig economy and another law in 2016 to stop local fair scheduling measures.19

By banning cities and counties from enacting any prevailing wage ordinances, Kansas is suppressing pay for construction workers throughout the state, not just on public projects. State lawmakers are tying the hands of local leaders, preventing them from enacting policies that would strengthen pay for workers of all races and ethnicities. And with white construction workers being paid considerably more than Black and Latinx construction workers—even in cities where white construction workers are in the minority—the inability to set local standards only further entrenches racial inequities.

Some Kansas state legislators are pushing back

Some state legislators have pushed back on this troubling trend by introducing a bill during the 2021 session that would restore local government’s power to raise the minimum wage.20

Labor peace agreements: Milwaukee, Wisconsin

In 2018, the Wisconsin State Legislature passed a bill forbidding local governments from requiring labor peace agreements for publicly funded projects. Through these agreements, private employers agree to remain neutral if their workers decide to organize a union.

Prior to 2018, municipalities in Wisconsin had the right to insist on labor peace agreements for public projects. Labor peace agreements (LPAs) require private employers working on projects or in facilities that a local government has a “proprietary interest” to reach a reciprocal agreement with unions, with the union typically foregoing the right to strike.

Governments may have a “proprietary interest” in projects funded by public dollars, projects they will receive loan repayments or rent from, or projects they have another large financial stake in. In particular, many LPA agreements apply to service-sector workers, including retail, janitorial, food service, and hospitality workers at airports, hotels, casinos, arenas, and convention centers (U.S. Chamber of Commerce 2016).

In exchange for unions giving up the bargaining power that the threat of a work stoppage affords them, employers may make a range of concessions about how they would respond if and when the workers organize a union, including agreeing to a simple card check rather than forcing an election, remaining neutral rather than publicly opposing the union effort, allowing organizers to access the workplace, and providing organizers with employee contact information.

Why Wisconsin workers need labor peace agreements

Unions are good for workers. Union workers in food preparation and related occupations, for example, had higher weekly earnings than their nonunion peers nationwide, making $604 compared with $519 in 2019 (BLS 2021a). Similarly, union workers in building and grounds cleaning and maintenance occupations are typically paid $692 per week compared with $567 for their nonunion peers.

Unfortunately, unions in Wisconsin have been decimated thanks in no small part to anti-union legislation signed into law by Gov. Scott Walker after his election in 2010. As a result, workers in Wisconsin today have less bargaining power than ever to push for higher wages and better working conditions.

Until the 2010s, union density in Wisconsin was consistently higher than in the U.S. overall, but the anti-union measures severely undercut workers’ ability to form and maintain unions in Wisconsin. From 2010 to 2017, Wisconsin experienced the largest decline in unionization rates of any state in the country (Cooper 2018). By 2018, Wisconsin’s union coverage had already declined by 13.5 percentage points since 1989, as shown in Figure C.

Figure C

Workers seeking to unionize face additional challenges from employers. Under current federal labor law, it is perfectly legal for employers, who already inherently have more power than their workers, to engage in a variety of activities that unfairly undermine organizing campaigns. Employers subject employees to mandatory “captive audience meetings” and one-on-ones with supervisors where they promote anti-union messages. They ban union organizers from the workplace and, collectively, they spend about $340 million annually on union-avoidance consultants (McNicholas et al. 2019).

In addition to these legal tactics, employers also frequently engage in illegal anti-organizing activities, as enforcement against these activities is lax and penalties trivial.

LPAs create a more level playing field so that workers are able to make their own decisions about unionizing.

Wisconsin state legislators took away localities’ right to require labor peace agreements

However, the right to require LPAs was taken away from Wisconsin cities and counties with the passage of Assembly Bill 748 in 2018. Like the Michigan “Death Star Bill” discussed above, AB 748 was far-reaching. In addition to forbidding LPA requirements, AB 748 limited the authority of local jurisdictions to enact other labor standards—including fair scheduling and employee benefits requirements and bans on employers asking about salary history.

It is worth noting that the majority-white state legislature that acted to preempt LPAs is not representative of the population of Wisconsin’s largest city, Milwaukee (see Appendix Table 7). Two in five Milwaukee residents (40.9%) are Black and one in five (20.1%) are Latinx, compared with just 5% and 2%, respectively, of state legislators.

State Rep. Rob Hutton, one of the original co-sponsors of the senate corollary to AB 748, specifically referenced four counties in his testimony to the state senate—Milwaukee, Dane, Brown, and Eau Claire (Hutton 2018). The populations of the counties he chose to mention are among the youngest and most diverse in the state.

In Milwaukee County, 26.1% of the population identify as Black, more than twice any other county in the state. In Dane County, 5.9% identify as Asian, making it the county with the largest Asian population in the state (WI DSC 2021). All four counties are among the 10 youngest (by median age) of the state’s 55 counties. Now that AB 748 is in effect, it is reducing the tools available to raise labor standards for workers of color and younger workers.

Milwaukee workers could particularly benefit from LPAs

Few cities in Wisconsin are in greater need of the tools preempted by AB 748 than its largest, Milwaukee. Income inequality in Milwaukee County grew by more than 21.9% during the 2010s (U.S. Census Bureau 2020). The median income of a Black household in Milwaukee is only 42% of the median income of a white household, the biggest income gap in the country. The Black poverty rate—33.4%—tops all large metropolitan areas in the United States. Nearly three-quarters (72.2%) of Black schoolchildren in Milwaukee go to “hypersegregated” schools,21 the highest share in the country (Levine 2020).22 The situation is so dire that in 2019 Milwaukee County officials declared racism a public health crisis (Pierre 2019).

Given the tremendous inequity and concentrated poverty among communities of color in Milwaukee, city leaders should be able to use every tool at their disposal to boost the wages, working conditions, and bargaining power of local workers. Allowing the city to require labor peace agreements when the city has a financial interest in a project or facility would ensure taxpayer funds are supporting good jobs that strengthen the community and give workers a voice.

Requiring that public contractors and others negotiate LPAs in which they forego some amount of interference if their workers consider coming together in a union certainly does not seem to be an unreasonable or burdensome requirement for those benefiting from receiving public contracts. When local governments cannot set even minimal standards for the contractors with whom they do business and the facilities they are financially intertwined with, their ability to improve economic conditions for workers and communities is severely limited.

Collective bargaining over employment conditions: Chicago, Illinois

In 1995, the state legislature passed a law preventing the Chicago Teachers Union (CTU) from negotiating with Chicago Public Schools (CPS) over numerous conditions of employment, including class sizes and the length of the school day and year. In a rare reversal of preemption, in 2021, the CTU regained this long-preempted right. This represents an opportunity for collective bargaining to advance the common good in the Midwest’s largest city.

In 1995, the Republican-controlled Illinois legislature passed the Chicago School Reform Amendatory Act. In addition to transferring considerable control over Chicago Public Schools to then-Mayor Richard M. Daley, the law changed the allowable scope of negotiations between the Chicago Teachers Union (which at the time represented more than 30,000 teachers) and CPS (Haney 2011). The state law prohibited CPS and CTU from negotiating over nearly all noneconomic issues, including assignments, technology, class sizes, and outsourcing.

Illinois’s preemption law was yet another example of a majority-white state legislature limiting the rights of a community that is majority people of color

By targeting CPS in particular, Illinois lawmakers were interfering with a school system that serves communities of color and employs workers of color. In 2021, 36.0% of Chicago students were Black and 46.8% Latinx, compared with 16.6% and 26.6%, respectively, in the state as a whole, as shown in Figure D. Indeed, while Chicago Public Schools enroll just 17.8% of Illinois’s K–12 students, they serve 38.5% of Illinois’s Black students, 31.3% of the state’s Latinx students, 27.9% of English learners, 28.8% of students from low-income families, and 30.2% of homeless students (Illinois State Board of Education 2020).

Similarly, a Chicago teacher is more than three times as likely to be Black, and nearly three times as likely to be Latinx, as the state teacher workforce as a whole. By comparison, just 18% of Illinois state legislators are Black and only 8% are Latinx (see Appendix Table 8).

Figure D

Damage was done over the many years the law was in effect

The inability of CTU and CPS to negotiate over class sizes has had an impact; despite having a greater share of low-income students, homeless students, and English learners than Illinois schools overall, Chicago Public Schools have a student-to-teacher ratio 16% higher than the state average in elementary schools and 11% higher in secondary schools. With the exception of kindergarten, class sizes in the district are noticeably larger at every level: 18% larger in 3rd grade, 17% larger in 6th grade, and 19% larger in high school. As one would expect from a school district with higher-than-average class sizes and other challenging working conditions, the annual teacher retention rate in Chicago Public Schools is 6% below the state average (Illinois State Board of Education 2020).

The preempted rights of CPS and CTU to negotiate over so many important concerns also came into play during the COVID-19 pandemic. In December 2020, the Illinois Educational Labor Relations Board (IELRB, which oversees operation of collective bargaining in Illinois public schools) denied CTU’s request for an injunction to force CPS to negotiate over plans to reopen schools in 2021. The IELRB specifically cited the curtailed bargaining rights in Chicago as the reason it denied the request (Masterson 2020).

Nevertheless, the Chicago Teachers Union persisted in advocating for Chicago’s teachers and students

In response to decades of understaffing and a lack of CPS attention to the needs of its students, the Chicago Teachers Union over the past decade has revitalized itself and, in the process, helped to establish the concept known as “Bargaining for the Common Good,” a strategy of union action that emphasizes the union’s commitment to the welfare of everyone in a community, not just its own members (McCartin and Najimy 2020). As a consequence of a 2012 strike, for example, CTU managed to win a collective bargaining agreement that included the right of students to have textbooks at the beginning of the school year, a demand of no financial benefit to CTU members but one that demonstrated a real willingness to use worker power to support their communities (Kamper 2018). A short 2016 strike produced small gains on class size issues, and in a 2019 strike, the union demanded (but did not win) a commitment by the city and the school district to provide housing for all the district’s homeless students (Potter and Inouye 2021).

The Illinois Educational Labor Relations Act, which governs collective bargaining for teachers in Illinois, was created under the presumption that “[u]nresolved disputes between the educational employees and their employers are injurious to the public, and…adequate means must be established for minimizing them and providing for their resolution.”23 CTU’s strikes over the last decades have, at least in part, been the consequence of the 1995 law limiting their ability to negotiate over noneconomic matters; without the ability to compel the employer to negotiate in good faith at the bargaining table, CTU was forced to resort to strikes in order to address their legitimate concerns.

April 2021: The preemption law was reversed

On April 2, 2021, Illinois Gov. J.B. Pritzker signed House Bill 1559, which reversed the 1995 law and put Chicago teachers and CPS on the same footing as other educator unions and their negotiating partners across the state. In a statement, CTU President Jesse Sharkey said, “We now at last bargain from a level playing field—with the ability to at last reject the chronic classroom overcrowding, incompetent and wasteful third party contracting, and the desperate shortage of school nurses, social workers, counselors and other chronic staffing needs that have plagued our schools for years” (CTU 2021).

With their preempted rights restored, CTU is now in a stronger position to advocate for its members and the communities they serve, since their working conditions are also their students’ learning conditions. Full and fair collective bargaining is a proven means of improving working conditions, and CTU members have demonstrated their desire to advocate for the children and families they serve as well.

Rent control: Chicago, Illinois

In 1997, Illinois lawmakers passed a law prohibiting cities and counties from establishing local rent control policies. Rent control is one policy tool of many that should be available to local lawmakers aiming to improve affordable housing options in their communities, especially in cities facing a housing crisis like Chicago. In January 2021, Illinois lawmakers introduced a bill to repeal the rent control preemption policy.

In 1997, Illinois state lawmakers passed the Rent Control Preemption Act, prohibiting local rent control measures—policies designed to protect tenants from excessive rent increases. The preemption bill was enacted even though no advocates or local governments had made any serious effort to pass rent control at that point (Dukmasova 2017).24

The spread of rent control preemption across the states

The legislation was likely motivated by business interests in the American Legislative Exchange Council, which has widely promoted model legislation for rent control preemption to state lawmakers (Dukmasova 2017; ALEC 2013). In fact, rent control was one of ALEC’s earliest targets (Winig and deVuono-powell 2019).

Today, most states (including every state in the Midwest except Nebraska) prevent local governments from placing restrictions on excessive rent increases (LSSC 2021b). In contrast, only one state, Oregon, has a statewide rent control policy, and only four states—plus the District of Columbia—contain localities with rent control laws in place: New York, New Jersey, California, and Maryland (Rajasekaran, Treskon, and Greene 2019).25

Effects of Illinois’s 1997 rent control preemption bill

Although the bill did not immediately undermine any existing municipal laws, the effects of the 1997 Illinois bill have become more acute in recent months. In April 2021, Cook County’s First District Appellate Court struck down Chicago’s “Keep Chicago Renting Ordinance,” arguing it violated the Rent Control Preemption Act. The ordinance had been enacted in 2013 to protect tenants living in foreclosed properties from displacements, by requiring the new owners to offer them a lease extension with a rent increase of no more than 2% or help pay their moving costs (Dukmasova 2017).

In addition, the prohibition on local rent control measures has reduced the policy tools available to local governments during the COVID-19 pandemic. Nationwide in 2020, Black renters were twice as likely as white renters to report being behind on rent payments (31% compared with 14%, and 26% for Latinx renters) (Acosta, Bailey, and Bailey 2020). And the crisis is still ongoing. In early 2021, more than 20% of Illinois households still struggled to pay rent (JCHS 2021).

Housing policy and racial justice

As documented earlier in this report, racist housing policy in the Midwest has been used to promote segregation and concentrate wealth and public investment in white communities. While explicitly racist practices, such as redlining, have been outlawed, exclusionary housing policies continue to segregate communities while reducing the overall housing supply and raising costs (Gyourko and Molloy 2015; Rothwell and Massey 2009).

Exclusionary zoning is a particularly harmful practice, and it is unfortunately only one component of a multifaceted housing affordability crisis across the country, which affects renters especially acutely (JCHS 2021). In Illinois, more than a quarter (27%) of renters have extremely low incomes, with incomes that are either at or below the federal poverty line or less than 30% of their area’s median income (NLIHC 2020).26 Among these very-low-income individuals, over two-thirds spend more than half of their income on rent.

The federal government defines a household as being “cost-burdened” if they spend more than 30% of their income on housing. As shown in Figure E, nearly three in 10 low-income Illinois households (households whose income is 51–80% of the area median), and the vast majority of extremely-low-income households, are cost-burdened.

Figure E

High rents limit the housing options available to low- and moderate-income families, sometimes displacing them from the neighborhoods where they live and preventing them from moving to nearby or other preferred neighborhoods. This displacement can be related to gentrification, although the two phenomena can and do occur separately (NLIHC 2019).

As of 2017, the Urban Displacement Project (2021) categorized more than a fifth (22%) of Chicago’s low-income neighborhoods (those with median household incomes at or below 80% of the regional median) as being at risk of gentrifying. Even without gentrification, 16% of Chicago’s low-income neighborhoods were seeing low-income households displaced. At the same time, the majority (59%) of the city’s moderate- and high-income neighborhoods (those with incomes above 80% of the regional median) already had rents so high that many low-income families could not afford to move there.

How rent control policies can help

Rent control, combined with policies that increase the supply of affordable controlled units, can help alleviate the major financial burden of housing costs for some families, especially those who are already economically precarious. It offers tenants greater stability by ensuring that they can afford, or at least predict, their rent.

Rent control policies in place today are primarily aimed at rent stabilization—capping rent increases, often at a percentage tied to inflation. While the specifics of rent control policies differ, they generally do not establish a long-term price ceiling, and they typically allow for rent increases during vacancies or other circumstances (for example, following substantial upgrades to the property). Rent control often applies only to older buildings or buildings with higher numbers of tenants (Rajasekaran, Treskon, and Greene 2019). These policies also usually include provisions intended to ensure that landlords can still make a reasonable profit and to avoid decreasing the overall housing supply.

Research shows that existing rent control policies have decreased rents and that tenants of rent-controlled units are less likely to move out, although there have been conflicting findings as to whether rent control increases or decreases rents for noncontrolled units (Rajasekaran, Treskon, and Greene 2019). There is also evidence that by encouraging tenant stability, rent control helps curtail gentrification of communities (Autor, Palmer, and Pathak 2014).

Rent control works best when combined with other policies to promote equity

Still, more research is needed to determine how to best design rent control policies that promote racial and economic integration and equity. Past research suggests that by primarily generating benefits for existing residents, rent control does not adequately target low-income individuals (Sturtevant 2018). There also isn’t clear-cut evidence that people of color access and benefit from rent control enough to reduce inequality (Rajasekaran, Treskon, and Greene 2019).

This does not mean that local governments should not pursue rent control. Rather, they should also intentionally explore specifications that address racial and economic disparities head on and use rent control in tandem with other policies that can make housing more affordable.

Further, certain policies should be used in conjunction with rent control to mitigate some of the unintended side effects of rent control. For example, since there is evidence that landlords become worse at maintaining properties under rent control, local governments should also be empowered to incentivize maintenance and enforce housing code violations (Rajasekaran, Treskon, and Greene 2019).

Policymakers should prioritize eliminating exclusionary zoning practices and increasing the supply of affordable housing through inclusionary zoning policies that require or incentivize private developers to make some share of newly constructed housing affordable. Since the federal government has fallen short in addressing the housing crisis, it is particularly important that state governments not stand in the way of local governments working to increase and maintain affordable housing options and to stabilize local housing markets (LSSC 2021b). In fact, Chicago has taken steps in this direction with an ordinance requiring certain development projects to include some affordable housing units (Chicago DOH 2021).

Preemption repeal introduced

In January 2021, Illinois state lawmakers introduced a bill to repeal rent control preemption. The bill was championed by Lift the Ban, a Chicago-based coalition that includes community groups, tenants unions, and labor unions (Groeger 2019).27 While a similar bill was introduced first in 2017 and again in 2019, this time the Housing Committee voted to advance the preemption repeal bill. Advocates—including Rep. Will Guzzardi (D-Chicago), who introduced the bill—have attributed some of the bill’s recent momentum to the COVID-19 pandemic (McClelland 2021).

Eviction moratoriums and emergency rental assistance proved to be critical during the pandemic, shining a light on the importance of using policy to promote affordable and secure access to housing. Early in the pandemic, the Chicago City Council Latino Caucus called directly on Gov. Pritzker to use emergency powers to lift rent control preemption (Bloom 2020). Although the governor had campaigned on lifting the ban, he has not acted on the issue while in office (Bennett and Duncan 2020).

Repealing state preemption of rent control would give local governments one more tool to address the housing crisis that is acutely affecting low-income households and displacing Black Chicagoans. State lawmakers should heed the calls of advocates for preemption repeal and let local lawmakers decide whether rent control could be used to help maintain affordable housing in their communities.

Preemption and the pandemic

The COVID-19 pandemic deepened existing racial inequalities. The virus has taken the lives of Black, Indigenous, Pacific Islander, and Latinx people at higher rates than white people (APM 2021). This inequality of health outcomes is coupled with an economic crisis that is disproportionately affecting communities of color.

How the COVID crisis has disproportionately harmed communities of color

As a result of systemic racism, Black and Latinx workers have long endured economic conditions that left them particularly vulnerable to this crisis. They are paid less, are more likely to be living in poverty, and are less likely to have access to paid sick leave than white workers (Gould and Wilson 2020; Gould, Perez, and Wilson 2020). Black and Latinx workers are also less likely to be able to work from home—meaning they are more likely to have been laid off from in-person work or to be exposed to COVID-19 on the job (Gould and Kandra 2021).

Even as the economy improves, workers of color are experiencing a less rapid recovery than their white counterparts. The unemployment rates for Black and Latinx workers were still 9.2% and 7.4% in June 2021, compared with 5.2% for white workers (BLS 2021c). These inequalities were embedded in the economy long before the pandemic hit and they will persist unless policymakers at all levels government address the unique challenges these communities face.

The crisis also worsened America’s already stark economic inequality, irrespective of race. Nearly 8 million lower-wage workers lost their jobs between 2019 and 2020, while higher-wage workers actually gained 1 million jobs (Shierholz 2021).

Low-wage industries—leisure and hospitality in particular—experienced particularly sharp employment declines; however, there was inequality within industries as well. A recent Bureau of Labor Statistics working paper found that, in many industries, employment among the lowest-paid workers suffered the most between April 2020 and May 2021 (Dalton et al. 2021). Already vulnerable workers in low-wage jobs were also especially likely to become “part-time for economic reasons” during the pandemic—meaning they have been able to get only part-time hours although they would prefer to work full time.

Preemption made a bad situation worse for those who were suffering the most

During the COVID-19 pandemic, the existing policy landscape and subsequent policy response had important implications for the health and economic welfare of communities. However, all too often state lawmakers stepped in to foil local leaders’ efforts to keep their communities safe.

Misuse of preemption prevented localities in some states from enacting policies that would have made them better equipped to deal with the pandemic, such as paid sick leave laws, eviction moratoriums, and municipal broadband. As a result, many localities were unable to ensure that their residents had access to sick leave during the pandemic, secure housing during an economic crisis, and adequate internet access when needed for work and school (Haddow et al. 2020). We provide just a few examples below.

Lawmakers have restricted localities from providing public broadband access. Six states in the Midwest have put in place barriers to establishing municipal broadband services: Iowa, Michigan, Minnesota, Missouri, Nebraska, and Wisconsin (LSSC 2021a). Broadband access is one of the many policy areas in which the corporate-backed ALEC has promoted a model bill encouraging the abuse of preemption (ALEC 2017).

Nebraska has particularly restrictive laws. Despite inadequate broadband access in much of the state, state legislators rejected an amendment to a budget bill in April that would have repealed this preemption and allowed local governments to provide internet services (Stoddard 2021). Internet access is critical infrastructure worthy of public investment. This is undeniable in the aftermath of a public health crisis in which students were suddenly attending school on the internet and working from home became more common.

Lawmakers acted to give corporations immunity, restricting localities’ ability to hold them accountable. ALEC was also at the center of the push for legal immunity for corporations from being held accountable for endangering workers and consumers. ALEC made coronavirus-specific adjustments to model corporate immunity bills that had long been a priority for them (Lacy 2020).

On top of the inadequate workplace safety response from the Trump administration, corporations sought to avoid accountability from the standards that did exist, at all levels of government (Dixon 2020). State legislatures and governors across the country ushered in corporate immunity across the country, some as early as May 2020 (Haddow 2021). In the Midwest, Iowa, Kansas, Missouri, and Ohio all passed bills that limited local government’s ability to hold corporations accountable to health and safety standards.28

Lawmakers preempted local public health efforts. Across the country, state lawmakers intervened in local public health measures, stymieing efforts to protect communities and workers while creating unnecessary confusion.

While preempting public health measures is particularly abhorrent during a pandemic, this practice predates COVID-19. A 2019 survey of local health officials reported that more than 70% had delayed or abandoned their efforts to enact local public health policies because of the shadow of state preemption (Rutkow et al. 2019).

Below are some examples of states undermining local health measures in the Midwest.

Blocking mask mandates

• Nebraska’s governor threatened to withhold federal aid from local governments that imposed mask mandates and other public health standards (Haddow 2021).
• In August 2021, Missouri’s attorney general sued Columbia Public School and its board of education over the district’s mask mandate (McKinney 2021).
• Iowa’s state legislature also imposed a ban on school district mask mandates in May 2021.29

Divesting local public health authorities of their power

• In Missouri, state lawmakers have considered several bills that would restrict the ability of local public health authorities to call for business closures or states of emergency. Corporate interests representing Missouri’s retail and restaurant industries back these bills, while many health and environmental groups have come out in favor of preserving local authority (STLHRC 2021).
• In Kansas, the governor signed a bill in March 2021 limiting the power of local health authorities to enact measures including mask mandates and limits on gatherings.30
• In spring 2021, state legislatures in Ohio, North Dakota, and Indiana all overrode their governors’ vetoes to enact limits on local health authorities.31

With varying vaccination rates and localized outbreaks, targeted local responses will remain an important policy tool for containing the COVID-19 pandemic. If local officials are unable to enact response measures, it will only prolong the pandemic and exacerbate harm in future emergencies—particularly for already marginalized groups. The result will be that preemption, once again, reinforces the existing racial and economic inequalities that plague communities.

Conclusion

In the cases outlined here, Midwestern state lawmakers prevented local action that would have improved economic conditions for millions, particularly low-income workers, women, people of color, and immigrants. These are groups that American institutions have systemically harmed and that suffered disproportionately during the COVID-19 dual public health and economic crisis (Wilson 2020).

During this pandemic, preemption has too often stifled local responses, generated confusion, and kept cities and states from working together to respond appropriately. Now, as local governments are looking to invest in their communities using federal funds from the American Recovery Plan, preemption has limited the policy tools that local governments can use to tie public investment to good jobs, equality, and worker justice, such as local hire agreements, prevailing wage laws, and labor peace agreements.

As noted earlier, present-day efforts to preempt local measures to strengthen workers’ rights are rooted in historical policies and structures that limited the rights and freedoms of Black and Brown people and entrenched white supremacy. Segregation divides communities in the Midwest to this day. Preemption of local workers’ rights policies, underinvestment in public resources, and diminishing union coverage all reinforce the racial inequality promoted by segregation.

Countering the misuse of preemption to prevent local policies that promote racial and economic justice is a wide-reaching challenge that cuts across policy issues and geographies. Despite the strength of preemption’s hold on the local policy landscape, there is still much that can and should be done to better empower communities.

Local governments, even if they are not immediately successful, should use lawsuits and other tools at their disposal to challenge state preemption, as Cleveland did to try to protect their local hire law. The examples of efforts to overturn preemption of rent control and the Chicago Teachers Union’s bargaining rights in Illinois provide hope and should be replicated.

State lawmakers also have the power to repeal preemption, restore local authority, and allow localities to make the choices that best suit their needs. Over the last few years, bills have been introduced across the country to do just that, including a 2020 Indiana bill that would allow local governments to require landlords to participate in housing assistance programs, a 2019 Ohio bill repealing minimum wage preemption, and the 2020 Michigan bill repealing the “Death Star” preemption bill discussed above.32

Undoing harmful forms of preemption across the country, and especially in the Midwest and the South, is a critical step in promoting progress. By failing to do so, present-day Midwestern lawmakers are reinforcing the deep inequality that their predecessors’ racist actions incubated throughout the region.

Acknowledgments

The authors would like to thank Local Solutions Support Center for their continued partnership and generous support for this project. We thank Krista Faries for her contributions as lead editor for this project; and thank Kyle Moore, Naomi Walker, and Josh Bivens for their thoughtful comments. We also thank the research, grassroots, and labor organizations across the Midwest who served as thought partners on this report for their work advancing racial and economic justice in the region. Finally, we thank the workers and communities whose lives are impacted by these policies every day and who are leading organizing and advocacy efforts to promote shared prosperity.

Appendix tables

Appendix Table 1

Appendix Table 2

Appendix Table 3

Appendix Table 4

Appendix Table 5

Appendix Table 6

Appendix Table 7

Appendix Table 8

Notes

1. The “second Klan” was a new Ku Klux Klan organization, inspired by but not organizationally linked to the post–Civil War Klan.

2. There is voluminous scholarship on this practice. Sugrue 1996 is a good starting point to learn more. For discussion of the development of Black political institutions in segregated cities, see Lang 2009.

3. Gabriel Winant (2021) documents this effect in Midwest-adjacent Pittsburgh.

4. A number of the charges in the suit have since been dismissed by the court, but elements of the suit are still pending. For recent developments, see ABC 2021.

5. The six states above the average were Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin. Iowa, Kansas, and Missouri were below the average.

6. According to the 2019 American Community Survey, from 2015–2019 the poverty rates in St. Louis, Kansas City, and Missouri overall averaged 20.5%, 16.9%, and 13.2%, respectively.

7. MCL 123.1381–123.1396.

8. 2020-SB-0960.

9. Ind. Code § 22-2-16-3.

10. Ind. Code § 22-2-2-10.5.

11. Ind. Code Ann. § 5-16-7.2-5; Ind. Code. § 8-2.1-19.1-4.

12. Ind. Code §§ 22-2-16-3.

13. Ordinance No. 2031-A-02 Chapter 188.

14. Ohio Rev. Code 9.75.

15. Ohio Rev. Code § 4113.85; Ohio Rev. Code § 4925.09.

16. Ohio Rev. Code § 4111.02.

17. K.S.A. § 16-2003.

18. K.S.A. § 12-16,130.

19. K.S.A. § 8-2702; K.S.A. § 12-16,130.

20. KS HB 2305.

21. Hypersegregated schools are schools “in which 90 percent or more of the students are minorities” (Levine 2020 citing education sociologist Gary Orfield).

22. Estimate based on 2014–2018 American Community Survey microdata.

23. 115 ILCS 5/.

24. 50 ILCS 825/.

25. OR SB 608.

26. Area Median Income (AMI) is used to determine income eligibility for affordable housing programs, reflecting geography and family size. In this analysis, the household income groups are based on metropolitan-area median family incomes and the aggregate statewide nonmetro median family income for households in nonmetropolitan areas.

27. IL HB 0116.

28. IA SF 2338; KS HB 2016; MO SB 56; OH HB 606.

29. IA HF 847.

30. KS SB 40.

31. OH SB 22; ND HB 1323; IN SB 0005.

32. IN HB 1012; OH HB 34; 2020-SB-0960.

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Key findings

Preemption is more prevalent in the South and is embedded in a racist history.

• “Preemption” in this context refers to a situation in which state lawmakers block a local ordinance from taking effect—or dismantle an existing ordinance.
• Southern states are more likely than states in other regions to use preemption to stop local governments from setting strong labor standards that would support people struggling to make ends meet, such as raising the minimum wage and guaranteeing paid sick leave.
• The use of preemption in the South is deeply intertwined with a long history of events and actions that have reinforced anti-Black racism and white supremacy.
• Preemption laws in the South are passed by majority-white legislatures and tend to create barriers to economic security in cities whose residents are majority people of color.
• The ordinances being preempted would disproportionately benefit Black workers and other workers of color, as well as women and low-income workers.

Preemption limits cities’ ability to protect their residents from the pandemic.

• Misuse of preemption has prevented localities in some Southern states from responding to the pandemic with local policies promoting public health, such as mask mandates and stay-at-home orders.
• In addition, misuse of preemption in the past prevented these same localities from enacting policies that would have made them better equipped to deal with the pandemic now.

Case studies. In this report, we use case studies to (1) document the practice, and establish a pattern of, misusing state preemption and (2) explore the adverse implications of this state interference on workers.

Introduction

Compelled by state and federal inaction, local governments throughout the country are tackling some of the most pressing issues of our time—from public health and safety, to climate change, to protecting workers’ rights and promoting broad-based economic security. And now, local governments in many states are leading the fight for stronger public health protections against COVID-19—through mask mandates, stay-at-home orders, and paid leave provisions, among other actions.

However, in every state in the South, conservative state lawmakers have long used preemption—state laws that block, override, or limit local ordinances—to stifle local government action, often under pressure from corporate interests and right-wing groups like the American Legislative Exchange Council (Cornejo, Chen, and Patel 2018). Through preemption, state lawmakers have obstructed local communities—often majority-Black-and-Brown communities—from responding to the expressed needs and values of their residents through policies strengthening workers’ rights. Even in the context of COVID-19, state governors have taken action to preempt local measures, like masking orders, that would do more to keep vulnerable people safe.

In this report, we first look at the historical context behind preemption in the South. We track current-day preemption of workers’ rights back to state-sanctioned policies and practices rooted in racism and designed to uphold white supremacy—practices begun in the post-Reconstruction era that disproportionately disadvantage not only Black and Brown workers but also women and low-income workers.

After establishing these historical foundations, we turn to specific case studies that illustrate the wide range of worker’s rights issues on which state policymakers are interfering with local democracy and—taken in the aggregate—have preempted progress throughout the South. To the extent that the data allow, we show the specific impacts state interference has on people of color as well as women and low-income workers. For each case study, we detail the demographics of the city or county compared with those of the state, illustrating how, across the former states of the Confederacy, the voices of people of color are being suppressed by disproportionately white state legislatures (see appendix tables).

In most of the case studies, state policymakers directly preempted a specific local ordinance that was passed or that was under consideration, stripping localities of the power to adopt the ordinance in question. In some cases, state policymakers acted proactively, passing laws to prevent local policymakers from enacting or considering certain types of ordinances. Again, we make the case that this disparate effort across states and issue silos are all connected, driven by the same goal of limiting the economic, political, and social power of people of color, women, and low-income workers.

Finally, we discuss how the current COVID-19 pandemic is disproportionately harming the same communities that have been preempted from taking local action, limiting their ability to effectively combat the public health crisis.

Preemption and the legacy of racism in Southern states

State governments interfere with local authority far more in the South than in any other region

Although state interference with local decision-making occurs in every region of the country, it is much more prevalent across the South. As seen in the interactive map (Figure A), local communities in Southern states have been prevented from enacting policies on a multitude of work-related issues. Southern communities have also been blocked from implementing various other social and economic policies that are increasingly common in other parts of the country, such as laws protecting LGBTQ communities from discrimination, immigrant rights measures, environmental protections, and ordinances to authorize removing Confederate monuments (PWF 2020; Schragger and Retzloff 2019).

^{FIGURE A}

This has also held true during the pandemic. There has been friction between local and state governments across the South, including in Florida, Georgia, Mississippi, South Carolina, Tennessee, Texas, and West Virginia, as these states have blocked cities and counties from imposing stricter local public health measures. For example, in Georgia, Gov. Brian Kemp sued Atlanta Mayor Keisha Lance Bottoms for imposing mandatory mask ordinances and other measures to protect public health in her majority-Black city (Haddow et al. 2020). While he has since dropped the lawsuit, he is still insisting, by way of executive order, that localities can only require masks on public property, not at private businesses (LSSC 2020c). In another illustrative example, policymakers in the two most populous Southern states, Florida and Texas, pushed schools to reopen in person, challenging the authority of local school districts to make their own slower, online reopening plans (LSSC 2020c).

State interference in local democracy is rooted in Confederate history and white supremacy in the South

State interference in local democracy is embedded in a long history of events and actions that have sought to promote the interests of historically privileged property owners and perpetuate the South’s racist past. Across the region, the configuration of government, policies, and practices are rooted in earlier efforts to limit the rights and freedoms of Black people and entrench white supremacy during the dismantling of Reconstruction-era economic and political gains and the concurrent rise of Jim Crow–era state-sanctioned discrimination (Farbman 2017).

Beginning in 1867, a series of radical Reconstruction Acts were enacted and paved the way for the rise of Black elected officials in state and local government as well as in the U.S. Congress (Sigward 2015). The military was given authority over the state judiciary and politics, and states were required to rewrite their constitutions for approval by Congress, including provisions for voting rights for all men, regardless of race. The Freedman’s Bureau was also authorized to register newly eligible voters across the former states of the Confederacy. Additionally, all men, regardless of race, but excluding former leaders of the Confederacy, could participate in constitutional conventions to form new state governments. The former Confederate states were also required to ratify the 14th amendment, which defines citizenship rights and grants citizens equal protection under the law, in order to regain representation in Congress (Sigward 2015).

Legislative seats that were once held by white slaveholders just a decade earlier were held instead by the country’s first Black members of the United States Congress (Harper and Brady 2019). About 2,000 Black public officials were elected to state legislatures and to local offices—to roles such as sheriffs, school board officials, and justices of the peace (Foner 2019). Many of these leaders were viewed as representatives not only for their states or districts, but also for Black constituencies in the region and around the country, advocating for policies to support enfranchisement and equal rights, criminalize lynching, and suppress the Ku Klux Klan (Harper and Brady 2019). But even as they were rising to positions of power and influence, supporters of the former states of the Confederacy and white supremacists were already seeking to stem their power: Elections were often marked by violence against both voters and candidates. Black elected officials often had to fight to secure their seats after winning elections because their opponents contested the results. Once in office, their colleagues actively sought to undermine their influence in the legislature.

In 1866, violence led by white conservatives in the South culminated in particularly horrific massacres of Black people in Memphis, Tennessee, and New Orleans, Louisiana. It was also in 1866 that the Ku Klux Klan first formed in Tennessee. Between 1869 and 1877, electoral backlash marked by Ku Klux Klan voter intimidation allowed white conservatives to replace Black public officials in Tennessee, Georgia, North Carolina, Virginia, and Mississippi (Foner 2019).

In 1877, the year commonly marking the end of Reconstruction, President Rutherford B. Hayes withdrew federal troops providing protection for Black communities in the South. White Southern state lawmakers continued to disenfranchise Black voters and dismantle the reforms that had been instituted after the Civil War. In this way, they were able to essentially restore the racial hierarchy of the pre–Civil War political order (Sigward 2015).

A legacy of racist symbols in the South reinforces the supremacy of whiteness and depresses economic and political outcomes today

A large spike in the number of Confederate symbols, including monuments and place names, occurred following the end of Reconstruction, during the rise of Jim Crow and segregation in the early 20th century. A second wave of new Confederate symbols was prompted by opponents to the civil rights and desegregation movements of the 1950s and 1960s, as part of a concerted effort to reinforce a white supremacist worldview (Schragger and Retzloff 2019; SPLC 2019).

Confederate symbols are closely tied to violent oppression of Black people in both the past and the present. Lynchings were used to intimidate Black voters and suppress the political power of Black communities in the South; areas that had more lynchings historically have more streets named after Confederate generals today (Williams 2019). These areas also tend to have lower Black voter registration rates and more officer-involved killings (Williams 2020; Williams and Romer 2020).

Pride in this violent history, enshrined in symbols, asserts the political and economic supremacy of whiteness. Significantly, areas with large numbers of Confederate-named streets are also more problematic economically for Black people: These areas experience worse Black–white inequality in labor market outcomes including unemployment, employment in jobs paying low wages, and overall wage disparities (Williams 2019).

States have used preemption to restrict local governments’ authority to remove Confederate monuments

As calls to remove Confederate symbols have grown, so has the reactionary movement to protect these symbols. For those seeking to do the latter, their task is as simple as calling on historical preemption laws still on the books—laws passed over the years by legislators who have unabashedly sought to protect the legacy of the Confederacy.

While Virginia recently (in April 2020) gave localities back the authority to remove Confederate monuments, seven states—Alabama, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, and Tennessee—still have some form of “statue statute” interfering with local governments’ ability to take down Confederate monuments, as of August 2020 (Schragger and Retzloff 2019; Thrasher 2020). In some cases, these statutes include punitive measures against localities that attempt to remove Confederate symbols, including fines in Alabama and withholding of state grants in Tennessee. Tellingly, many of the same states that preempt local control over monuments also prohibit local action on raising the minimum wage and passing paid sick time—including Alabama, Georgia, Mississippi, North Carolina, South Carolina, and Tennessee (EPI 2018).

As shown in Table 1, these statue-protection statutes have not completely halted efforts, either by local governments or activists, to remove these racist symbols. In the seven states with laws preempting local authority over monuments, 47 Confederate symbols have been removed—17 were removed in 2020 alone (as of August). While these actions represent meaningful progress, there are still nearly 1,000 Confederate symbols in these seven states alone. Of these states, North Carolina has removed the most symbols—18. However, this accounts for just 10.2% of the 176 Confederate symbols erected in North Carolina.

Table 1

At the same time, protesters across the country have successfully pushed state policymakers to call for the removal of statues. This was the case in North Carolina, where the governor ordered the removal of Confederate monuments from the grounds of the state Capitol building (Moshtaghian and Cullinane 2020). Local policymakers can also take strong public stands, as the mayor of Birmingham did recently by ordering the removal of a Confederate statue in defiance of the preemptive Alabama Monuments Preservation Act (Burch 2020).

Preemption interacts with other policies in the South to undermine public services and worker power

The abuse of preemption is just one tool that state policymakers in the South use to suppress the political power of Black communities, reinforce white supremacy, and undermine progressive policies that would benefit not only Black workers but also other workers of color, women, and low-income . When local governments have sought to improve public services or to strengthen worker bargaining power, state policymakers in the South have interfered at every opportunity. This section provides background on two overarching goals of these policymakers, which are common themes throughout the case studies explored in this paper: (1) keeping taxes low and regressive, and (2) undermining the power of workers to maintain the present political, racial, and economic power structure.

Tax policy and public investment

Tax and spending policy in the South emphasizes a minimalist form of government focused on privileging property holders. In their comprehensive report, Advancing Racial Equity with State Tax Policy, examining the interplay of state tax policy and racial equity, Leachman et al. (2018) describe how many of the state and local tax laws that preserve structural inequality by constraining public revenues had their origins in the post-Reconstruction and Jim Crow eras.

Fearful that their large Black populations might wield political power to restructure taxes, some Southern states enacted supermajority requirements for revenue changes, starting with Mississippi in 1890. This made it next to impossible for Black voters and their allies to meaningfully raise property taxes and secure public investments in education, health care, and other public goods.

The South was also home to the first modern sales tax, adopted by Mississippi in 1932 (Leachman et al. 2018). Sales taxes are particularly regressive—costing low-income families a larger share of their income compared with higher-income families—and therefore disproportionately harm Black families, who have lower household incomes on average.

The connection between these early laws and the current state of public revenues and spending in the South is self-evident. Texas and Florida, the two most populous states in the South, have the second and third most unequal tax systems in the country, meaning they take a greater share of income from low- and middle-income families than they do from wealthy families. Two other Southern states, Tennessee and Oklahoma, are also among the 10 least equal states in terms of taxation (ITEP 2018).

Their tax structures are not just unequal, but they are also inadequate. Southern states rank particularly low in state tax collections per capita and in other revenue sources, including fees and user charges (such as tolls for roads and bridges) (TPC 2020a). As a result, the unweighted average of per-capita direct state and local general expenditures in the South in 2017 was lower than in the rest of the country (TPC 2020b). Southern states, by and large, spend less on both education and health care than other states (NSB 2020; Urban Institute 2020). At the same time, the nine states with the highest incarceration rates are in the South, meaning these states are pouring excessive resources into an oppressive criminal justice system while neglecting public services that are badly needed (The Sentencing Project 2020).

With so few resources generated for and invested in public services, it is perhaps not surprising that the South has the highest poverty rates, the worst infant mortality rates, and the lowest educational attainment of any region in the United States (CDC 2018; U.S. Census Bureau ACS 2019a, 2019b).

This insistence on undercutting public investment at every turn persists even when the cost to taxpayers would be minimal, as illustrated by Medicaid expansion in the states under the Affordable Care Act (ACA), for which the federal government foots the majority of the cost. Eight states in the South have not yet expanded Medicaid and, as of 2018, 92% of uninsured adults who would have health insurance if their state chose to expand Medicaid were residing in the South (Garfield, Orgera, and Damico 2020).

The rise of so-called right-to-work laws

Southern state lawmakers also sought to limit Black workers’ power in the workplace through the passage of so-called right-to-work (RTW) laws. These laws undermine workers’ collective bargaining power by allowing workers at unionized firms to benefit from a collective bargaining agreement without paying their fair share toward the union’s costs of negotiating and administering the agreement. RTW laws undermine the financial strength of unions, thereby limiting their ability to win better benefits, wages, and working conditions for their members. RTW laws have been shown to lower workers’ wages and benefits in the states where they have been enacted (Gould and Kimball 2015).

Efforts to enact RTW laws began in the South, with the first RTW laws adopted in Arkansas and Florida in 1944. The initial efforts to push RTW laws are credited primarily to Texas businessman and lobbyist Vance Muse and the Christian American Association (CAA). Using arguments equating union growth with race-mixing and communism—and with financial backing from wealthy Southern planters, oil companies, and allied industrialists—Muse and the CAA succeeded in passing a variety of anti-union laws, including RTW laws, in the South in the 1940s (Kromm 2012; Pierce 2017). RTW laws were designed to help entrench existing political power structures by undermining workers’ collective voice and ensuring that workers remained divided along racial lines (Pierce 2017).

When the Congress of Industrial Organizations (CIO), one of the country’s largest national labor organizations, began its “Operation Dixie,” hoping to organize workers in the South, Southern Democrats in Congress joined with northern Republicans in voting for the 1947 Taft-Hartley legislation that undermined union organizing, in part by explicitly authorizing state RTW statutes (Kahlenberg and Marvit 2012). Following the passage of Taft-Hartley, a wave of Southern states enacted RTW laws (NCSL 2020b).

The impacts of the South’s anti-union efforts are stark. As of today, every state in the South is an RTW state, and all three states that ban collective bargaining by public employees are in the South: North Carolina, South Carolina, and Virginia (Barber 2020). The six states with the lowest rate of workers represented by unions are all Southern states: South Carolina, North Carolina, Georgia, Texas, Virginia, and Tennessee. Of the 10 states with the lowest rate of union representation, eight are Southern states (BLS 2020a).

Case studies of state interference with local business and labor standards ordinances

Minimum wage: Birmingham, Alabama

In 2016, the Birmingham City Council passed an ordinance raising the city’s minimum wage to $10.10 per hour. The Alabama state legislature blocked the ordinance, bringing the city’s minimum wage back down to $7.25 per hour.

Alabama is one of five states—all in the South—that would not have a minimum wage at all if it were not for the federal minimum wage of $7.25 an hour (EPI 2020). Last raised in 2009, the federal minimum wage is worth significantly less today than in previous decades. At its high point in the late 1960s, the federal minimum wage was equal to roughly $10.35 in today’s dollars—about 43% higher than it is today. Since then, Congress has enacted infrequent and inadequate adjustments to the federal wage floor, such that a working parent of one child working full time and being paid the federal minimum wage today has earnings below the federal poverty line (Cooper, Gould, and Zipperer 2019).

In 2016, faced with this decline in the real value of the minimum wage, local lawmakers in Birmingham, Alabama, passed an ordinance that established a city minimum wage of $10.10 an hour. In doing so, Birmingham joined roughly two dozen cities and counties throughout the U.S. that had similarly established local minimum wages.

Alabama is a Dillon’s Rule state, in which local authority is strictly limited to only those powers granted by the state—therefore, the fate of Birmingham’s minimum wage ordinance was already uncertain. But the state legislature was not taking any chances that the local minimum wage law would be allowed to stand. Within just two days of the ordinance’s passage, the Alabama state legislature blocked Birmingham and other localities in the state from establishing their own minimum wages (Roth 2016).

Alabama is one of 25 states to bar local governments from setting minimum wages that are different from the state minimum wage (EPI 2018; NELP 2019). In theory, preemption could be used in such a case to ensure consistently high standards across a state—that is, to prevent local governments from setting a local minimum wage that is lower than the state minimum wage. That is not the case here. In fact, in 18 of these states, including Alabama and nine other Southern states, the state minimum wage is equal to the federal minimum wage of $7.25 an hour—so it’s not possible to go lower (EPI 2020).

In an effort to reinstate the higher local minimum wage, Birmingham fast-food workers, Black state lawmakers, and civil rights groups filed suit against the state’s attorney general. They argued that the attorney general had a duty to inform lawmakers that the law negating Birmingham’s minimum wage was unconstitutional because it “perpetuates Alabama’s de jure policy of white supremacy, in particular its suppression of local black majorities through imposition of white control by state government” (Koplowitz 2019). Although the lawsuit was dismissed on procedural grounds, the data, discussed below, show that the plaintiffs’ arguments have merit.

The decision by the Alabama state legislature to block the Birmingham minimum wage is a clear example of a majority-white legislature using its power to block communities of color from adopting laws benefiting their communities. According to data from the 2018 American Community Survey, almost 69.2% of Birmingham’s residents are Black while just 22.1% are white. When Birmingham’s population is compared with Alabama’s state legislature, the racial disparity is stark: 75.0% of state legislators in Alabama are white and only 22.1% are Black (see Appendix Table 1).

In blocking Birmingham’s minimum wage ordinance from taking effect, the state legislature prevented local leaders from taking action to address the needs of the city. In 2018, Birmingham’s poverty rate among working-age people was 23.7%—dramatically higher than the statewide working-age poverty rate of 14.5%. Yet local leaders were blocked from enacting a policy that effectively reduces poverty.

As shown in Figure B and Table 2, stopping Birmingham’s minimum wage from taking effect denied pay raises to an estimated 65,000 low-wage workers, 19.1% of the local workforce. Note that the minimum wage impact data in the figure and table reflect estimates for Birmingham’s Jefferson County, which includes Birmingham and surrounding areas.

Figure B

Table 2

The Birmingham minimum wage case also reveals how the decision by a white, male-dominated state legislature to strip local governments of their ability to respond to the needs of their constituents disproportionately harms women and communities of color. Table 2 shows that a higher Birmingham minimum wage would have disproportionately helped Black workers: 26.2% of Black workers in Birmingham’s Jefferson County would have received a raise, compared with just 14.2% of white workers. While Black workers make up just 31.5% of the Jefferson County workforce, they would have made up 43.1% of all workers receiving higher pay due to the higher minimum wage. It is also worth noting that the majority of low-wage workers who would have benefited from the higher minimum wage are women. As shown in Table 2, 53.8% of the workers who would have received a raise because of the higher local minimum wage are women.

Occupational tax: Montgomery, Alabama

In February 2020, the Montgomery City Council passed an occupational tax to provide additional funding for public services. The Alabama state legislature passed a bill to nullify the ordinance.

In February 2020, the Montgomery, Alabama, City Council passed a measure establishing an occupational tax (a payroll tax levied on employees who work in the city) of 1%. The tax was intended to provide additional funding for public services, and it supported the hiring of additional public employees (WSFA Staff and Bowerman 2020). In anticipation of the tax passing, and in defiance of a letter signed by the mayors of the 10 largest cities in Alabama, the state legislature moved to strip cities of the ability to levy occupational taxes (AP 2020). The new law, passed in March, does not impact the occupational taxes that were already in place in more than 20 Alabama cities prior to February 2020, but it nullified the Montgomery measure. Going forward, cities must now obtain permission from the state legislature before they can raise their occupational taxes above the levels they were at as of February 1, 2020 (Cason 2020).

Here again, a majority-white state legislature overrode the will of local lawmakers representing a majority-Black city. As previously noted, the Alabama legislature is 75% white. Nearly two-thirds (60.8%) of Montgomery residents are Black, compared with one-quarter (26.7%) statewide (see Appendix Table 1). Four of Montgomery’s nine city council members are Black (MacNeil 2019). While the council is still whiter than Montgomery’s majority-Black population, it is still much more representative than Alabama’s state legislature.

The need for additional revenues such as those that would have been provided by the Montgomery occupational tax is clear. Alabama, like most states, has a regressive state tax system that needs progressive overhaul (Gundlach 2020). In fact, its system is even more regressive than most states in that its residents must pay the full sales tax on groceries (Figueroa and Legendre 2020). Under Alabama’s regressive system, residents in the lowest income group pay the largest share (9.9%) of their income in total taxes, while Alabamans with the top 1% of families pay 5.0% of their income in taxes (ITEP 2018).

The additional revenue from the Montgomery payroll tax was intended to go toward bolstering public safety, education, infrastructure, and other public programs, including salaries for additional public employees (WSFA Staff and Bowerman 2020). In Alabama, as in communities across the country, women and Black workers are disproportionately employed in state and local government (Cooper and Wolfe 2020). As shown in Figure C, women account for nearly three in five state and local government employees in Alabama, whereas they make up less than half of the private-sector workforce. Black workers are also somewhat overrepresented (26.9% of the state and local government workforce compared with 25.8% of the private-sector workforce) as are women of color (19.7% compared with 17.1%; see Table 3). The Montgomery occupational tax aimed to bolster progressive revenue streams at the local level to strengthen local programs and services—goals that should be encouraged, not blocked.

Figure C

Table 3

Targeted and local hire laws: Nashville, Tennessee

In 2015, Nashville voters passed a ballot initiative requiring that a share of work hours on municipal construction projects go to local and low-income workers. The Tennessee state legislature passed a bill overriding the ballot initiative.

Targeted and local hiring policies support job opportunities by requiring that a minimum percentage of work hours created by a development project be set aside for job seekers from low-income communities within the city or county, especially low-income communities of color. These policies provide good jobs to local residents in communities that often experience barriers to employment (Cornejo, Chen, and Patel 2018).

In 2015, Nashville1 voters approved, by a 58% to 42% margin, a local ballot initiative backed by local community and labor organizations. The proposed ordinance required that for municipally funded construction projects that cost $100,000 or more, 40% of construction work hours must go to Nashville residents, with 25% of those work hours (or 10% of the overall work hours) going to low-income Nashville residents. Just weeks after the city passed the ordinance, the state legislature introduced and passed a bill to override it. With the governor’s signature, it became the first state prohibition on municipal-level local hire laws in the country (Woodman 2016).

Tennessee is no stranger to preemption. The state limits municipalities from implementing minimum wage, paid leave, and anti-discrimination laws, to name a few (DuPuis et al. 2018). And it took no time for state legislators to step in to override the will of Nashville voters. As state senator Jack Johnson, the bill’s sponsor, put it: “Another issue that has been brought in opposition to my bill, which would nullify the charter amendment, is that we are overturning the will of the voters of Nashville. In fact we are” (Ebert 2016).

The state legislative override of the Nashville local hire initiative is another example of state legislators thwarting the will of local communities of color. In Nashville, 44.1% of residents are people of color, while 82.6% of state legislators in Tennessee are white and 84.6% are men. Just 12.9% of Tennessee state legislators are Black and 0.8% are Latinx (see Appendix Table 2).

Guaranteeing that 40% of construction work hours on municipally funded projects go to Nashville residents would substantially increase the chances of Black, Latinx, and immigrant workers being hired for this work. As shown in Figure D and Table 4, about one in seven construction workers living in Nashville are Black (14.5%), while workers in the larger Nashville metropolitan area that extends beyond Davidson County (Nashville-Davidson-Murfreesboro-Franklin, Tennessee) are half as likely to be Black. The trend is even more pronounced for Latinx workers, who make up nearly half (46.2%) of construction workers in Nashville, compared with a quarter (25.1%) in the greater metro area and fewer than one in five (18.2%) in Tennessee.

Figure D

Table 4

Immigrant workers also would have benefited from the local hiring initiative, if the will of Nashville voters had not been overturned. Just about half (49.5%) of all construction workers in Nashville were born outside the U.S. and 45.0% are not U.S. citizens. Immigrant construction workers are far more concentrated in Nashville than in the Nashville metropolitan area (23.0%) or Tennessee overall (16.1%).

To sum up: In addition to disregarding the will of Nashville voters, Tennessee legislators directly blocked a policy that would stand to benefit Black, Latinx, and immigrant workers. Without targeted local hiring policies, workers from these communities are more likely to be denied job opportunities due to systemic racial discrimination in hiring practices (Quillian et al. 2017). The failure of state legislators to support this policy also deprives communities of transparency regarding hiring in the construction industry for publicly funded projects in their communities.

Around the country, local and state governments have made effective use of targeted and local hiring measures on major economic development and construction projects to deliver good jobs to local communities. By voting for a measure that would ensure more construction job opportunities go to Nashville residents, voters chose to provide opportunities to Black, Latinx, and immigrant workers in their community. Voters sent a clear message that when their tax dollars are spent on development, those dollars should be bolstering the economic security of Nashville residents. As many Southern states see an increase in the number of development projects and other public infrastructure investments in their communities, targeted and local hiring measures will serve as a critical component for ensuring racial and economic equity and inclusion in the South.

Paid sick leave: Dallas, Texas

A paid leave ordinance was set to go into effect in Dallas, Texas, on April 1, 2020. On March 31, a Texas federal court judge blocked the ordinance after state legislators’ attempts to block it failed.

When workers do not have access to paid sick leave, they are forced to choose between their economic security and the health of themselves and their families. The workers who are the most economically precarious, who stand to lose the most by missing a day of earnings, are also the least likely to have access to paid leave. Paid sick leave is particularly important for women in the workforce, who are more likely than men to have caregiving responsibilities. Having access to paid sick days allows parents to stay home from work when their child is sick and increases their ability to stay in the labor force (Milli and Williams-Barron 2018). Despite these benefits, no states in the South require all employers to provide paid sick leave (ABB 2019).

For many service workers—for example, restaurant workers—going to work while ill could also pose an increased contagion risk to the greater community (NPWF 2020; Ibarra 2018). The coronavirus pandemic has made many realize the public health implications of going to work while sick—a realization that should underscore the importance of paid leave, even during “normal” times.

Over the past two years, the cities of Austin, San Antonio, and Dallas, Texas, have all passed laws requiring that businesses provide their employees with paid sick leave (Dailey and Douglas 2020). State legislators in 2019 attempted, but failed, to pass legislation to block these local paid sick leave laws. Undeterred, right-wing lawmakers in Texas and their business allies turned to the Texas court system to try to block the local paid sick leave ordinances, succeeding in receiving injunctions for the Austin and San Antonio ordinances in 2018 and 2019, respectively (Samuels 2019; Dailey and Douglas 2020). On March 31, 2020, in the face of a global pandemic, a federal judge blocked Dallas from enforcing its paid sick leave law, which was set to go into effect the next day (Dailey and Douglas 2020). All three ordinances are still on hold pending court action.

As shown in Table 5, two in five (41%) of workers in Dallas, a total of 301,838, do not have access to paid sick leave (Milli and Williams-Barron 2018). Access rates for Black workers in Dallas fall below access rates for white workers, with 37% of Black workers lacking paid sick leave compared with 31% of white workers (see Figure E). The majority (55%) of Latinx workers in Dallas do not have access to paid leave. The vast majority (71%) of the workers who would benefit from a paid leave ordinance are people of color.

Figure E

Table 5

The Dallas paid leave ordinance would particularly benefit lower-income workers, who are much less likely to have access to paid sick leave. Fewer than one in three full-time (35 hours or more), full-year workers in Dallas whose income is less than $15,000 per year have paid leave, compared with the vast majority (85%) of workers who earn $65,000 or more (Milli and Williams-Barron 2018).

By blocking these paid leave measures through the courts, right-wing legislators and the business community have shown their disregard for the health of the 4.3 million Texas workers who do not have access to paid leave. Paid leave represents an investment in public health (Lewis 2019), because it prevents workers who are sick from exposing their co-workers and the public to illness. Yet as the Texas experience shows, even in the face of a global public health crisis, the fight to deny workers paid leave continues.

In fact, the pandemic has created additional opportunities for the misuse of preemption to prevent policies that would promote public health. Southern states—including Florida, Georgia, Mississippi, South Carolina, Tennessee, Texas, and West Virginia—have prevented localities from enacting local public health measures that are stricter than statewide stay-at-home orders.

Case studies involving proactive preemption, in which localities are blocked before they can even consider policies that could benefit their residents

As we have shown, state lawmakers in the South often override local initiatives benefiting local residents. In other cases, local communities lose their ability to make positive change before they have even contemplated action on the issue. This section details some of these cases. We describe actions taken by state policymakers to block local democracy, and we show how local communities could have benefited from the potential measures in question, based on the positive impacts such measures have had where they have been enacted. At bottom, it is clear that local communities have been deprived of the opportunity to benefit their residents because of the chilling effects of state interference.

Fair scheduling: Atlanta, Georgia

In 2017, the Georgia state legislature passed a law prohibiting local governments from implementing fair scheduling regulations, even though no cities in Georgia had such a law. Fair scheduling could benefit 28,991 workers in Atlanta and 750,926 workers statewide who work in retail and food service.

The Georgia legislature has frequently acted to prevent local governments from protecting and empowering workers, including prohibiting local paid leave and minimum wage ordinances (EPI 2018). As discussed earlier in this paper, paid sick leave and minimum wage ordinances are particularly critical for raising the living standards of Black and Brown workers and women.

In 2017, Georgia joined the list of states that have passed laws prohibiting localities from implementing fair scheduling regulations (EPI 2018; Donohue 2017). By prohibiting its cities and counties from requiring that employers give additional notice or pay to employees when their schedules are changed, Georgia is once again preventing communities from adopting labor standards that would disproportionately benefit women and workers of color.

Many workers, especially hourly and low-wage workers, are subject to unpredictable schedules (Vogtman and Tucker 2017). Under the guise of flexibility, employers leverage technology to make last-minute and inconsistent scheduling decisions. The result is that workers are required to give up their own freedom and flexibility (CPD 2018). These unfair scheduling practices can take many forms, which can be used in combination, compounding their negative effects. Some employers use “just-in-time” scheduling, often with the aid of scheduling software, to make last-minute staffing decisions in response to anticipated changes in demand. Another tactic is on-call scheduling: Workers are asked to stay available, generally without compensation, but are not told whether they are required to come in until just hours before the shift. Workers may also be asked to work unreasonable shifts, for example, a “clopening”—a late closing shift followed by an early opening shift (Vogtman and Tucker 2017; Schneider and Harknett 2019). Each of these practices is quite widespread within the retail and food service industries (Schneider and Harknett 2019). While unfair scheduling is certainly not limited to retail and food service, most fair workweek laws do focus on protecting workers in those industries (Wolfe, Jones, and Cooper 2018).

These unpredictable scheduling practices wreak havoc on workers’ lives. Workers must plan their time, spending, and savings around these inconsistent (and often insufficient) hours. Unpredictable scheduling can negatively impact workers’ access to child care and health care, since day care centers often require consistent drop-off schedules and doctor visits require advance appointments. Enrolling in additional training and education can be next to impossible when you are required to “stay available” for shifts (Vogtman and Tucker 2017). Even when compared with peers with similar wages, retail and food service workers with less predictable schedules were more likely to experience material hardship, such as going hungry or being unable to pay bills (Schneider and Harknett 2019).

Furthermore, unfair scheduling practices can make it difficult to schedule job interviews or shifts at other jobs, preventing workers who are part time but would like to work more hours from getting full-time work or another part-time job (Golden 2015). Part-time work and lower hours are more prevalent in wholesale and retail trade, as well as in leisure and hospitality (which includes restaurants), than in the overall workforce. At the same time, part-time workers in these industries are also more likely to want full-time work than their peers in the overall workforce (BLS 2020c).

Since Black, Latinx, and Asian workers, and women of any race, are all disproportionately likely to be employed in restaurants or bars, they would also stand to gain the most protection from scheduling fairness legislation. Nationwide, Latinx workers make up 26.8% of all workers in the food service and bar industry, and Black workers account for 13.2% (compared with 17.6% and 12.3% of the overall workforce, respectively). Asian workers are also disproportionately likely to work in food service or bars, making up 7.5% of that industry compared with 6.5% of the overall workforce. Women account for a majority (52.1%) of this industry despite making up just 47% of the overall workforce (BLS 2020b).

Retail and food service workers of color, and particularly women of color, are more likely to experience unstable schedules than their white peers, an inequity that persists even when controlling for other demographic characteristics and education (Schneider and Harknett 2019).

Because of the clear importance of predictable scheduling to workers, a number of cities and one state have adopted scheduling fairness laws. As of 2018, 1.8 million workers in New York City, San Jose, Seattle, San Francisco, Emeryville (California), and the state of Oregon were protected by fair workweek laws that focused largely on retail and fast-food workers (Wolfe, Jones, and Cooper 2018). In the last year, fair workweek protections have also taken effect in Chicago and Philadelphia, with Chicago’s ordinance covering workers in health care facilities, building services, and hotels in addition to restaurant and retail workers (HR Dive 2019).

In Table 6, we show the number and demographics of nonmanagerial workers in retail and food service. By proactively preempting fair scheduling laws, the Georgia state legislature has denied local governments the opportunity to protect the 750,926 Georgians who work in retail and food service, not to mention workers in other industries who would stand to benefit from broader fair workweek protections.

Table 6

In particular, if Atlanta were to enact fair workweek legislation, 28,991 workers in retail and food service would stand to benefit. The majority, or 14,627, of those workers are Black. Women also stand to benefit from a fair workweek law focused on these industries, since they make up over half of this workforce both in Atlanta and statewide.

This state interference not only has an outsize impact on Black and women workers, but it also negates the voices of Black voters in Atlanta. Nearly half (48.0%) of the voting-age citizen population in Atlanta is Black, compared with less than one-third (32.0%) statewide (see Appendix Table 4). The state legislature, which is 69.5% white, is not representative of Black workers and the population whose authority they are preempting.

Platform ‘gig’ economy: Kentucky

In 2018, the Kentucky state legislature passed an expansive law classifying workers on “marketplace platforms” as independent contractors, which excludes them from key labor standards.

With the growth of the digital platform (“gig”) economy, much attention has focused on the issue of whether individuals performing services through an online platform such as Uber, Lyft, Handy, or TaskRabbit should be considered employees or whether they are independent contractors. The distinction makes a significant difference to workers. Independent contractors, who are viewed by the law as being in business for themselves, are not covered by unemployment insurance, workers’ compensation, minimum wage laws, overtime protections, paid leave laws, anti-discrimination laws, or most health and safety laws, and they do not have the right to form unions and engage in collective bargaining (Carré 2015). Employers do not pay payroll taxes, workers’ compensation, or unemployment insurance premiums on independent contractors. The distinction between employees and independent contractors is one of real substance, for workers, employers, and government programs.

Misclassification occurs when businesses deem workers “independent contractors” when those workers should be considered employees. By misclassifying workers, businesses avoid paying payroll and workers’ compensation taxes—saving themselves up to 30% while costing states and localities millions of dollars in lost revenue (NELP 2017).

Misclassification affects workers across industries, including construction, restaurants, janitorial services, and trucking. Lately, much attention has been paid to the misclassification of gig economy platform workers. Platform companies such as Uber and Lyft have maintained that their drivers are independent contractors who simply use Uber or Lyft’s technology to connect with their own customers. However, platform companies in fact play a large (often unilateral) role in setting pay and determining work hours and conditions. Many platform workers, including ride-share, delivery, and domestic workers, face hazardous workplace conditions and low pay. This makes it particularly egregious to exempt them from minimum wage and workers’ compensation protections (Smith 2018).

To protect workers from misclassification, state policymakers can set standards for who can be considered an independent contractor under state law. California adopted such a measure in September 2019, establishing a statewide “ABC” test for determining whether a worker is an employee or an independent contractor. When this California law was passed, however, gig economy companies such as Uber, Instacart, and DoorDash made their opposition clear by pledging to spend $110 million on a ballot initiative that would exempt them from the law (McNicholas and Poydock 2019). Uber and Lyft have refused to comply with the law and have been sued by the California attorney general and several city attorneys for noncompliance. A San Francisco Superior Court judge ruled against the companies and said they must treat their drivers as employees, although they are allowed to maintain the status quo for now while awaiting a decision by the court of appeals (Bond 2020).

In 2018, Kentucky took an entirely different approach, passing an expansive law prohibiting local governments from treating workers on “marketplace platforms” as employees by deeming them “marketplace contractors,” not employees. Any worker who uses a digital network or application to connect with those who are seeking their services—in other words, any gig economy platform worker—is deemed a marketplace contractor under Kentucky law. Nearly identical bills were introduced in nine other states during the 2018 legislative session (Smith 2018). In most of these cases, the legislation was drafted by Handy, an online building services platform (Kessler 2018). Passage of the marketplace contractor legislation is yet another example of businesses lobbying for lax state-level regulation to preempt city laws that would protect workers (James 2018).

The impact of the law on digital platform workers in Kentucky is extensive. The number of digital platform workers has grown significantly in recent years: Between 2012 and 2016 alone, the share of Kentuckians who were doing online platform gig work grew from just 0.01% to nearly half a percent (Collins et al. 2019). In 2016, there were more than 10,000 online platform economy workers in Kentucky—all of whom could potentially be misclassified with the aid of the 2018 law (Collins et al. 2019).

We estimate that as of 2016, there were between 3,822 and 7,527 workers in Louisville who earned money using an online labor platform. These estimates, based on Collins et al. (2019), use the shares of online platform workers in nearby cities.2 Our low estimate is based on Memphis, where 1.0% of workers reported earnings from online labor platforms, and the high estimate is based on 2.0% of workers in Columbus. Even this high estimate is likely an undercount, since we use the number of income tax returns filed by Louisville residents (373,690) to estimate its full workforce whereas Collins et al. had access to detailed administrative IRS data including the number of non-filers.

The 2018 law disproportionately impacts workers of color. Black and Latinx adults are more likely to earn money through online platform work than their white peers, so they are more likely to be deprived of important workplace protections because of their misclassification as “marketplace contractors” under the Kentucky law. In 2016, Black adults were nearly three times as likely to have worked using online labor platforms as white adults, and Latinx adults were more than twice as likely to have worked using online labor platforms as their white peers. People of color who have worked using online job platforms are also more likely than white gig workers to see that source of income as essential or important, rather than “nice to have” (Smith 2016).

Gig economy companies conspired with state lawmakers in Kentucky to protect their own interests and to overrule the authority of communities. In Louisville, this represents a silencing of a population that has a higher share of Black people (11.0%) than the state overall (7.8%) and that is not well-represented by the state legislature, which is 92.0% white (see Appendix Table 5).

‘Ban-the-box’: Mississippi

“Ban-the-box” policies reduce barriers to employment for the formerly incarcerated. But, since 2014, Mississippi has prohibited localities from adopting laws “that in any way interfere with an employer’s ability to become fully informed of the background of an employee or potential employee.”

As many as four in 10 people in the United States possess a criminal record, which creates barriers to housing, education, voting rights, and employment (Eberstadt 2019). Regarding employment, “ban-the-box” policies reduce barriers for formerly incarcerated people and people with arrest and conviction histories by delaying employer inquiries about an applicant’s criminal record until later stages in the hiring process. These policies prohibit employers from requiring applicants to disclose their criminal history on an initial application so that the initial employment consideration is made on job-related factors.

According to 2012 guidance issued by the Equal Employment Opportunity Commission, ban-the-box policies reduce employment discrimination based on race and national origin, particularly since Black and Latinx people are arrested, convicted, and incarcerated at higher rates than white people due to structural racism in policing, sentencing, and incarceration (EEOC 2012). Rather than automatically disqualifying candidates based on the stigma of a criminal record, ban-the-box policies allow employers to first evaluate applicants based on their skills and qualifications. At later stages of the hiring process, an employer may then inquire about and assess a relevant criminal record that could impact an applicant in a specific occupation or work setting.

Prompted by a nationwide movement led by a grassroots organization, All of Us or None, based in Oakland, California, ban-the-box laws have been increasingly adopted across the country (Evans 2016). In 2016, the Obama administration directed federal agencies to “ban the box” for federal government jobs (White House 2016). As of July 2019, 35 states and over 150 cities and counties have adopted ban-the-box policies. Currently three-fourths of people living in the U.S. live in an area that has banned the box. This includes several Southern states, including Georgia, Kentucky, Louisiana, Oklahoma, Tennessee, and Virginia, as well as many cities and counties with similar or more expansive policies, including Austin, Dallas County, San Antonio, Birmingham, Jacksonville, Miami-Dade County, Orlando, St. Petersburg, Tampa, Charlotte, Durham County, and Winston-Salem (Avery 2019).

A recent study found that, for people with conviction histories, ban-the-box policies increase the likelihood of obtaining a public-sector job by about 30% on average (Craigie 2017). Furthermore, the study did not find evidence that these policies resulted in discrimination against the very population they are intended to benefit, as some scholars have argued they would. Other studies of cities and counties that have implemented ban-the-box policies—including Durham, the District of Columbia, and Atlanta—have found similar positive employment impacts for people with arrest and conviction histories (Atkinson and Lockwood 2018; Juffras et al. 2016; Emsellem and Avery 2016). Studies show that employment is the single most important factor in reducing the likelihood of returning to jail or prison (Berg and Huebner 2011). Employment after incarceration provides critically important income to allow formerly incarcerated people to support themselves and their families.

In Mississippi, there is growing support for a statewide ban-the-box policy—while recently introduced legislation ultimately failed to pass both chambers, it did receive bipartisan support.3 However, since 2014, Mississippi has prohibited localities from adopting laws “that in any way interfere with an employer’s ability to become fully informed of the background of an employee or potential employee.”4 This law interferes with the ability of cities to pass local ordinances to ban the box for public-sector applicants and contractors, as well as for private-sector job applicants, as many neighboring states and cities have done.

The inability of localities to enact ban-the-box policies especially harms employment prospects for Black and Latinx people, who are more likely than white people to be incarcerated in Mississippi (and in other states) due to over-policing and structural racism (Hinton, Henderson, and Reed 2018). Mississippi has an incarceration rate of 1,039 per 100,000 people, meaning it imprisons a higher percentage of its people any other state in the country excepting Oklahoma and Louisiana (Wagner and Sawyer 2018). This includes those in prisons, jails, immigrant detention centers, and juvenile justice facilities. People from Black and Latinx communities are overrepresented among Mississippi’s incarcerated population (at 57% and 12%, respectively), while white people are underrepresented (30%), compared with their overall representation in the state (37%, 3%, and 58%) (PPI 2020).

National research on pre-incarceration income and unemployment finds that three years before incarceration, just 49% of working-age people were employed, and on average they were paid less than $15,000 a year (Looney and Turner 2018). This means that, for many, the economic insecurity following incarceration compounds the challenges they were already facing. Incarceration also further highlights income disparities for Black and Latinx formerly incarcerated people, who experience lower incomes when compared with white formerly incarcerated people (Western and Pettit 2010). Among people on probation, two-thirds are paid less than $20,000 per year (Finkel 2019). Banning the box supports employment opportunities for the formerly incarcerated and for others with arrest and conviction histories, many of whom were already struggling to make ends meet.

Public-sector employment, the sector in which ban-the-box policies are often first applied, has historically been at the forefront of anti-discriminatory employment, initially through measures that regulated the federal government. Eventually, anti-discrimination regulations were extended to state and local governments, making them generally more equitable and inclusive workplaces for women and Black workers (Cooper, Gable, and Austin 2012). As shown in Figure F and Table 7, Mississippi is no exception. Women account for more than three in five state and local government workers in Mississippi (61.6%), a much greater share than in the private sector. Black workers are also disproportionately represented in Mississippi state and local government, accounting for two in five workers in that sector (40.6%) compared with just over one in three (35.7%) in the private sector.

Figure F

Table 7

Banning the box for government employees in Mississippi would once again put the public sector on the front lines of anti-discrimination. While more equitable hiring policies should certainly be extended into the private sector as well, focusing first on passing ordinances in the public sphere can allow localities to pave the way for even more transformative change. If Mississippi localities incorporate these values into their government hiring practices, it could result in larger shares of Black, Latinx and other residents impacted by incarceration in the Mississippi public-sector workforce.

Prevailing wage: New Orleans, Louisiana

Since 2011, Louisiana has prohibited cities and counties from enacting prevailing wage ordinances. Prevailing wage laws ensure that contractors on public construction projects do not drive down local wage standards by underpaying their workers. We estimate that implementation of a prevailing wage law in New Orleans could increase the typical construction worker’s annual earnings by roughly $5,000.

Since 2011, Louisiana has prohibited cities and counties from enacting prevailing wage ordinances. Such laws govern the construction contracts that cities or counties enter into with private contractors for city or state construction projects, requiring that the contractors pay their workers at least the prevailing wage in the city or county for the type of work being contracted. The policies’ definitions of “prevailing wage” vary from location to location, although they generally reflect a commonly held or dominant wage.

Prevailing wage laws are common throughout much of the United States. Contracting by the federal government has been subject to prevailing wage regulation since 1931, with the passage of the Davis-Bacon Act (Mahalia 2008). As of January 2020, 26 states and the District of Columbia have some form of prevailing wage law (DOL 2020). Louisiana is one of the 24 states without such a law.

The rationale for prevailing wage laws is straightforward: Communities do not want public contracts to drive down local wage standards. Because contractors typically must bid to work on public projects, without a prevailing wage requirement, firms may cut wages in order to win contracts. This obviously harms employees of the individual construction firm and, more importantly, it also pushes down wages throughout the industry as rival firms respond with similar cuts when making their bids. Prevailing wage laws preserve wage levels for construction workers and ensure that contractors compete for government projects based on efficiency, management skill, material costs, and the productivity of a firm’s employees.

Despite the clear benefits of prevailing wage laws, in June 2011, then-Governor Bobby Jindal signed a bill passed by the Republican majority in the Louisiana legislature prohibiting any public entity in the state from establishing standards—such as requiring certain wage rates—on any public contracts (NCSL 2020a). Louisiana is one of the nine states that Diller (2012) classifies as “home rule, but skeptical of local authority.”5 Notwithstanding Louisiana’s home rule tradition, the state legislature stripped local communities’ ability to establish wage standards on publicly funded projects. This is not the only time that the legislature has gone against the home rule tradition. In fact, in 1997 Louisiana became the first state to pass a law preempting local minimum wage ordinances. Community, faith, and labor groups in Louisiana have joined together to advocate for the repeal of the 1997 minimum wage preemption law, as well as paid sick leave preemption, in the “Unleash Local” campaign (Barber 2019).

Research shows that construction workers in jurisdictions with prevailing wage laws earn substantially more than their counterparts in places without such laws. Eisenbrey and Kroeger (2017) find that construction workers in states with prevailing wage laws are typically paid 13% to 22% more per hour than construction workers in states without prevailing wage laws.6 This wage premium benefits not only construction workers on public projects in a state, but also construction workers across the state. It is thus not surprising that the median wage of construction workers in Louisiana is lower than the median for construction workers nationwide. The national median was $22.80 per hour in May 2019, 7.2% higher than Louisiana’s median of $21.27.7

If cities in Louisiana were permitted to adopt prevailing wage standards, these laws would raise the pay of thousands of local construction workers, including workers of color. Consider, as an example, wages for construction workers in New Orleans. As shown in Table 8, the median hourly wage of construction workers in the New Orleans Metropolitan Statistical Area (MSA) in 2019 was $20.46 per hour—3.8% less than the statewide median and 10.3% less than the national median. A New Orleans prevailing wage law would have the potential to lift pay for over 35,000 construction workers in the area. If wages rose by the 13% difference identified by Eisenbrey and Kroeger (2017) (the lower end of their range), that would translate into a wage increase of $2.66 per hour, or—applied to the median annual wages reported by construction workers in the New Orleans MSA—a roughly $5,000 increase in annual earnings.

Table 8

Table 8 also shows the differences between the racial and ethnic composition of the construction workforce in New Orleans and that of the statewide construction workforce, as well as the differences in wage levels by race and ethnicity. The construction workforce in the New Orleans area is majority people of color—only 41.1% of area construction workers are white. Statewide, 64.7% of construction workers are white. Both statewide and in New Orleans, white construction workers are typically paid more than Black and Latinx construction workers, although median wages for Black construction workers are slightly higher in the New Orleans MSA than they are for the state.

Louisiana’s legislature is 76.4% white (see Appendix Table 7). The state population overall is 58.4% white. By restricting the ability of localities to set prevailing wage standards, the majority-white state legislature is denying the local government of New Orleans—a city that is 69.6% people of color—from establishing a policy that would raise wages for all local construction workers, the majority of whom (58.9%) are workers of color. For a Black construction worker in New Orleans, a pay raise equivalent to the 13% prevailing wage premium identified by Eisenbrey and Kroeger (2017) would mean a $5,000 increase in annual wages. For Latinx construction workers, it would be a $3,300 raise.

By banning cities and counties from enacting any prevailing wage ordinances, the Louisiana state legislature is suppressing pay for construction workers throughout the state. State lawmakers are tying the hands of local leaders, preventing them from enacting policies that would strengthen pay for workers of all races and ethnicities. And with white construction workers being paid considerably more than Black and Latinx construction workers—even in cities where white construction workers are in the minority—the inability to set local standards only further exacerbates racial inequities.

Case studies: Preemption fights on the horizon

Since 2010, state interference in local governance has continued to expand rapidly across the country, particularly in the South (von Wilpert 2017). In what was clearly a coordinated strategy to push corporate-friendly legislation in as many state houses as possible, historically high numbers of preemption bills were filed in many states in 2019 (Haddow, Gad, and Fleury 2019). And while not all of the bills that were introduced became law, there is every reason to believe that the bills will be introduced again in future sessions.

The following case studies describe instances in which anti-regulatory groups and right-wing lawmakers have tried to block local actions that protect workers but have not yet succeeded in doing so.

Wage theft protections: Miami-Dade County, Florida

In 2010, Miami-Dade County became the first county in the country to enact a wage theft ordinance. Within two years, the county had recovered more than $500,000 in stolen wages for nearly 400 workers. However, in 2019, Florida state lawmakers attempted to pass a bill negating Miami-Dade’s wage theft ordinance and preventing other counties in Florida from following Miami-Dade’s lead.

Wage theft occurs when an employer fails to pay a worker the full compensation to which the worker is legally entitled. As Cooper and Kroeger (2017) explain, wage theft can take many forms, from the explicit—such as refusing to pay promised wages, paying less than legally mandated minimums, or failing to pay overtime premiums—to less visible exploitation, such as requiring staff to work off the clock, making illegal deductions from paychecks, or intentionally misclassifying employees as independent contractors to avoid paying minimum wages, payroll taxes, or other required benefits.

In 2010, Miami-Dade made history by becoming the first county in the country to enact a county wage theft ordinance. Florida is a “permissive home rule” state, rather than a Dillon’s Rule state, meaning that there is a settled understanding that local governments have broad authority to enact policies on any issue where there is no state or federal prohibition. Miami-Dade’s ordinance created a mechanism within the county’s Small Business Development Agency for workers to file wage theft claims that the agency would then investigate, attempt to reconcile, and refer to a hearing examiner when needed. Within the first two years after the ordinance passed, the Miami-Dade Small Business Development Agency’s wage theft enforcement actions had already recovered more than $500,000 for nearly 400 workers in the county (Hernandez 2012).

In creating a local system for wage theft victims to seek restitution, county commissioners were responding to a widespread and deeply harmful problem that the state had failed to remedy. McNicholas, Mokhiber, and Chaikof (2017) estimate that low-wage workers across the country lose more than $50 billion to wage theft annually. Cooper and Kroeger (2017) describe how minimum wage violations alone cost workers an estimated $15 billion each year, including over $1.1 billion in Florida. In fact, Cooper and Kroeger find that Florida has the highest rate of minimum wage violations among the 10 most populous states in the country, with nearly a quarter (24.9%) of low-wage workers reporting being paid less than the state minimum wage.

This exceptionally high rate of minimum wage violations is likely caused, in part, by the fact that employers in Florida have little reason to think they will be caught if they engage in wage theft. Galvin (2016) explains that Florida has very weak state labor laws and no state enforcement agency to investigate alleged abuse. A conservative majority of the state legislature, along with then-Governor Jeb Bush, eliminated Florida’s Department of Labor and Employment Security in 2002. By establishing its own investigatory body, Miami-Dade stepped in to address an issue on which the state had explicitly decided to no longer act.

Despite a clear problem with wage theft in Florida—as illustrated by the success of the Miami-Dade ordinance—state lawmakers in 2019 attempted to negate Miami-Dade’s wage theft ordinance and prohibit all counties in Florida from enacting measures to combat wage theft. The bill would have overturned wage theft ordinances across the state and prevented local governments from establishing any ordinance governing the conditions of employment within that jurisdiction.8 The legislation would have prohibited local laws on everything from minimum wage, paid sick days, and fair scheduling laws to ban-the-box policies and wage theft victims’ rights (Haddow, Gad, and Fleury 2019). The bill died in committee, although similar legislation has passed in other Southern states (Riverstone-Newell 2017).

Table 9 displays the number of workers in Florida and in Miami-Dade County who are likely experiencing minimum wage violations. Of the 456,177 workers in Florida who are likely subject to minimum wage violations, 223,983 are women. Substantial numbers are also Black (72,076) and Latinx (128,642). The failed bill to prohibit wage theft measures would have denied communities the opportunity to protect these workers from this egregious exploitation.

Table 9

For the city of Miami, this bill represented an even more direct attack on Black and Latinx workers. Of the estimated 44,914 Miamians who experience minimum wage violations, 32,338—or nearly three-quarters—are Latinx. There are also more Black workers than white workers experiencing minimum wage violations in Miami.

The estimates in Table 9 apply the statewide overall share of minimum-wage-eligible workers who have experienced minimum wage violations—7.3%—from Cooper and Kroeger 2017 to the number of minimum-wage-eligible workers in each demographic group. This likely results in an undercount of the number of women and workers of color who experience minimum wage violations, since they actually experience these unfair practices at higher rates than the overall workforce. Women in Florida experience these violations more often than men (8.4% of minimum-wage-eligible workers vs. 6.4%), as do Black and Latinx workers (Cooper and Kroeger 2017).

It is also possible that the prevalence of wage theft is lower in Miami than in the rest of the state, thanks to the wage theft ordinance. However, there is evidence that many cases of wage theft in Miami go unreported and that the agency tasked with enforcement does not have adequate resources or a broad enough jurisdiction to handle cases efficiently (Hernandez 2012). In any case, eliminating Miami-Dade’s authority to regulate wage theft would disproportionately leave women and Black and Latinx workers worse off; policymakers must defend against this. At the same time, policymakers should prioritize strengthening the enforcement mechanisms for the ordinance.

Salary history bans: West Virginia

In 2019, the West Virginia state legislature sought to block cities from enacting salary history bans. Disclosing prior salaries during the hiring process can perpetuate and compound salary inequities throughout a worker’s career by undermining their ability to bargain during salary negotiations. Research has shown that salary history bans raise wages for all workers, in particular women and Black workers.

To close racial and gender pay gaps, policymakers across the country have begun to ban employer questions about pay history (Douglas 2019). However, as with wage theft, some lawmakers have tried to proactively preempt local action on this issue. In West Virginia, this led to a bill that would have—in addition to interfering with a whole host of other local labor standards and nondiscrimination regulations—blocked cities in West Virginia from enacting salary history bans (Haddow, Gad, and Fleury 2019). Although this sweeping bill died in committee, it signals a clear desire from lawmakers to interfere with local action on worker’s rights issues.9

Gender and racial wage gaps are real, large, and persistent. In 2019, the typical woman worker was paid just 85.0% of what her male peers were. These inequalities persist, and are in fact larger, between women and men with more education. Racial wage gaps are even more egregious, with the typical Black and Latinx worker being paid about three-quarters the hourly wages of white workers, 75.6% and 74.6%, respectively (Gould 2020).

When workers face lower pay from the beginning of their career, disclosing their prior salaries during a hiring process can perpetuate and compound these inequalities throughout their career by undermining their ability to bargain over pay during negotiations over a job.

A recent report confirmed the effectiveness of salary history bans and found that these bans also make employers more likely to include salary ranges in their job postings. Among all “job-changers,” workers experienced a 5% increase in pay after salary history bans were enacted. Women and Black workers saw particularly strong effects, with women who change jobs seeing an 8% increase in pay and Black workers seeing a 13% increase (Bessen, Meng, and Denk 2020). Since Black workers and women experience outsized effects, these policies help shrink existing pay gaps. The report estimates that salary history bans reduce the gender wage gap by 48% for job-changers and found an even stronger effect for the Black–white wage gap.

As shown in Figure G, the gender wage gap in West Virginia is apparent among workers at all wage levels. The typical woman in West Virginia is paid just 78.8% of what the typical man in West Virginia is paid. And even for those who earn the most, the gender wage gap is inescapable. At the 90th percentile, male wage earners in West Virginia are paid $40.07 an hour, which translates into $83,300 for a full-time, full-year worker. This is 20.7% more than their female peers, who are paid $33.19 an hour, or $69,000 annually.

Figure G

A salary history ban would boost the wages of West Virginian workers by helping to even the playing field as workers go into wage negotiations. This, along with the related mitigating effects on pay inequalities, are strong reasons why legislators should champion salary history bans at the state and local levels. Preempting local action on salary history bans would harm workers in West Virginia—and particularly women and workers of color.

Preemption and the pandemic

Many Southern states that relied on limiting the authority of local governments before the onset of the pandemic in 2020 have made broad use of preemption during the pandemic. Many executive orders issued since by Southern governors have outlawed local public health measures that were stricter than the standards set by the state:

• A Mississippi executive order issued on March 24, 2020, forbade political subdivisions (including cities and counties) from imposing social distancing regulations or business shutdowns stricter than the state’s (LSSC 2020a).
• On April 7, 2020, the governor of South Carolina issued an executive order explicitly disallowing local stay-at-home orders stricter than the state’s.10
• In Florida, an executive order issued on April 1, 2020, “clarified” that state-level orders superseded local ones. The next day, the governor explained that cities could still enact stricter coronavirus-related protections. The ensuing confusion resulted in local officials being reluctant to enact stay-at-home orders or require businesses to close (Lemongello, Man, and Rohrer 2020).
• On March 26, 2020, the governor of Arkansas issued an executive order prohibiting local stay-at-home requirements, arguing that such regulations would interfere with essential operations and commerce (LSSC 2020b).
• On May 11, 2020, Texas Attorney General Ken Paxton threatened to sue city officials in Austin, Dallas, and San Antonio unless they rolled back “unlawful” local emergency orders that imposed stricter public health safety measures than the state allowed (Platoff 2020).

The pandemic, far from being a “great equalizer,” is deepening existing inequalities along racial lines. The virus has taken the lives of Black, Indigenous, Pacific Islander, and Latinx people at higher rates than white people (APM 2020). This inequality of health outcomes is coupled with an economic crisis that is disproportionately affecting communities of color. Black and Latinx workers face economic conditions that have left them particularly vulnerable to this crisis. They are paid less, are more likely to be living in poverty, and are less likely to have access to paid sick leave than white workers (Gould and Wilson 2020; Gould, Perez, and Wilson 2020).

Black workers are more likely to be front-line workers—employed in essential industries such as health care, child care and social services, and grocery, convenience, and drug stores—putting them and their families at even greater risk and compounding the existing health inequalities they face. About one in six front-line workers are Black, even though only one in nine workers are Black in the overall workforce. At the same time, Black workers are less likely to have health insurance and to have paid leave than white workers (Gould and Wilson 2020).

Latinx workers are less likely than other workers to be able to work from home, leaving them prone to job loss or exposure to coronavirus on the job. In particular, Latinx workers are disproportionately employed in the leisure and hospitality industry, which experienced the largest job losses of any industry at the beginning of the pandemic. Latina workers, who already had a higher unemployment rate than white workers, experienced the largest spike in unemployment between February and April of any group (Gould, Perez, and Wilson 2020).11

Preemption plays a role in reinforcing these inequalities when it is used to directly hamper local policies intended to mitigate the public health and economic fallout of the pandemic. It could instead be used to ensure that health and economic equity is being advanced evenly across a state. Misuse of preemption has also prevented localities in some states from enacting policies that would have made them better equipped to deal with the pandemic, including paid sick leave, eviction moratoria, and municipal broadband. As a result, these localities are unable to ensure that their residents have access to sick leave during a pandemic, secure housing during an economic crisis, and better internet access when it is needed to attend work and school (Haddow et al. 2020).

Conclusion

In the face of the COVID-19 pandemic and resulting economic crisis, cities and states should be working together to enact policies that will protect their residents’ health and promote equity during both the crisis and the recovery. Instead, some state policymakers continue to interfere with local policymakers’ authority to enact and enforce policies to protect their residents. During this pandemic, preemption has too often stifled local responses and generated confusion.

The public health and economic crises stemming from COVID-19 have disproportionately impacted the same communities that had already seen their power limited by state government interference in local democracy. Poor wages and working conditions, limited public investments, and higher rates of incarceration resulting in higher poverty rates have left Southern populations particularly vulnerable to the current economic crisis (Blair and Worker 2020a). Southern policymakers have also ensured that the region has particularly low access to unemployment insurance, paid sick leave, and health care (Blair and Worker 2020b).

In the cases outlined here, Southern lawmakers prevented local action that would have improved economic outcomes for low-income workers, especially low-income women and people of color. These are populations that had already been left particularly economically vulnerable by American institutions, and now these populations are suffering disproportionately from a dual public health and economic crisis (Wilson 2020). As discussed earlier, the present-day failures of American institutions are also rooted in historical policies and practices intended to limit the rights and freedoms of Black people and entrench white supremacy.

Rather than allowing for policies that would improve employment outcomes, wages, and working conditions, state lawmakers and corporate interests have collaborated to prevent progress. State interference fundamentally undermines the ability of cities to address problems with targeted solutions that address the needs and reflect the values of their communities. Because of the deliberate, long-time use of preemption to maintain the racial and economic order, workers in the South who were already vulnerable before the pandemic are now struggling with the effects of widening and deepening inequities.

Acknowledgments

The authors thank Jori Kandra, Melat Kassa, and Daniel Perez, EPI research assistants, for their attention to detail; Krista Faries as the lead editor for this project; and Naomi Walker and Lynn Rhinehart for their overarching guidance and support. We thank Local Solutions Support Center for their partnership and generous support for this project. We also thank the research and grassroots organizations across the South who served as thought partners on this report for their work advancing racial and economic justice in the region. Finally, we thank the workers and communities whose lives are impacted by these policies every day and who are leading organizing and advocacy efforts so that people and families can thrive and make ends meet.

Notes

1. In this section, Nashville refers to the consolidated city-county metro of Nashville-Davidson County. Nashville accounts for the vast majority of Davidson County’s population and the city and county governments have been consolidated since 1963 (Bucy n.d.). Unless otherwise noted, statistics for “Nashville” represent Nashville-Davidson County.

2. Since data for Louisville are not included in Collins et al., we use nearby cities (Cincinnati, Cleveland, Columbus, and Memphis) to get a range of estimates. Of that group, Memphis had the lowest share of gig workers (1.0%) and Columbus had the highest (2.0%). Number of tax filers retrieved from https://www.irs.gov/statistics/soi-tax-stats-county-data-2016, August 3, 2020.

3. Comm. Substitute for S.B. 2112, 2020 Sen., Reg. Sess. (Miss. 2020).

4. S.B. 2689, 2014 Sen., Reg. Sess. (Miss. 2014).

5. Diller explains that the Louisiana constitution states that “[n]o local governmental subdivision shall…except as provided by law, enact an ordinance governing private or civil relationships.” Yet despite this strong language, courts in Louisiana have generally weakened or struck down local measures based on other grounds, rarely invoking the state constitution.

6. In straight, nominal terms, the median wage for construction workers was 21.9% higher in prevailing wage states versus states without prevailing wage laws. When the wage values are adjusted using the Bureau of Economic Analysis’s Regional Price Parities to account for regional price differences, the gap narrows to 13.0%.

7. Nationally, the May 2019 median wage for construction workers was $22.80 hourly and $47,430 annually. Median hourly wages by race/ethnicity are calculated by applying the ratio of each race/ethnicity’s median annual wages to the overall annual median and hourly median from the Occupational Employment Statistics.

8. S.B. 432, Sen. (Fla. 2019).

9. H.B. 2708, House (W.V. 2019), bill status.

10. S.C. Exec. Order 2020-22.

11. For a detailed exploration of the dual health and economic crises that are deepening the inequalities faced by Black and Latinx workers, see Black Workers Face Two of the Most Lethal Preexisting Conditions for Coronavirus—Racism and Economic Inequality and Latinx Workers—Particularly Women—Face Devastating Job Losses in the COVID-19 Recession.

Appendix tables

Appendix Table 1

Appendix Table 2

Appendix Table 3

Appendix Table 4

Appendix Table 5

Appendix Table 6

Appendix Table 7

Appendix Table 8

Appendix Table 9

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Introduction

An economy that’s growing on paper is not translating into better jobs for America’s workers. Despite a tight job market and strong corporate profits, paychecks have barely budged. Much of the explanation lies with eroding worker bargaining power–which is resulting in a shrinking sliver of the benefits of prosperity being shared with working families. And the deep structural racism that still pervades our economy means that workers of color and immigrants are struggling the most. Black workers face the greatest of these economic disparities, including large gaps in pay and employment. And the Trump Administration is making matters worse by rolling back the worker protection gains of recent years, scapegoating immigrants, and attacking unions and others who seek to give workers a voice on the job. More than ever, states need to lead the way in fighting back and pioneering new solutions. This agenda for America’s workers outlines model policies and best practices for enabling governors and state legislatures to protect workers in their states so that all communities can thrive and grow.

1. Jump-Start Stalled Paychecks

Raise the Stuck Minimum Wage. At the federal level and in 21 states the minimum wage has been stuck at a paltry $7.25 since 2009, causing extreme hardship for the nearly one in three U.S. workers who struggle in low-paying jobs. States representing 21% of the U.S. workforce are already gradually ramping up their minimum wages to $15 an hour—which is what single workers will soon need to afford the basics everywhere in America.

The rest of the states should do the same—and where legislatures won’t act, states should put the minimum wage on their state ballots in 2020, the way that Missouri, Arkansas, Arizona, Colorado, Washington, and Maine voters did in 2016 and 2018.

Restore Overtime Pay to Deliver a Middle-Class Raise. It used to be that if your boss asked you to put in extra hours at work, you got overtime pay in return. Not anymore. The share of salaried workers guaranteed overtime pay when they work more than 40 hours a week has plummeted from almost 63% in 1975 to less than 7% today. That’s because the salary threshold under which salaried workers are guaranteed overtime when they put in long hours hasn’t been updated in years and remains less than $24,000.

This means that millions of U.S. workers are working 50 or 60 hours a week, losing time with their families, and not getting any overtime pay for their hard work and dedication. It also means that employers aren’t hiring workers to do the extra work. The Obama administration ordered a long-overdue updating of the overtime threshold to about $48,000 a year. But a group of Republican state attorneys general blocked the increase, and the Trump Labor Department is expected to water it down.

California, New York, Pennsylvania, and Washington are already acting to deliver this long-overdue middle-class overtime raise for workers in their states. Governors and legislatures in other states should do the same–and should set a salary threshold of at least $55,234 by 2022–which is the equivalent of the 2016 Obama overtime salary threshold updated for wage growth. Importantly, in many states such as New Jersey, Michigan, Wisconsin, Minnesota, Colorado, Oregon, Montana, Pennsylvania, and Washington State, governors can expand overtime pay on their own through their state labor agencies without need for action by the legislature.

2. Get States Back in the Business of Fighting Wage Theft and Enforcing Other Worker Protections

Every week millions of workers are cheated when employers short their paychecks, force them to work off the clock, fail to pay even the minimum wage, or skirt employment laws by denying that they are employees. This type of wage theft is a national epidemic that robs U.S. workers and our economy of billions of dollars a year and hurts law-abiding employers that can’t compete with wage chiselers. But in many states, the agencies responsible for cracking down on employers that cheat their workers have been neglected and defunded. Governors and legislatures need to get their states back in the business of fighting wage theft and enforcing other worker protections, ranging from combatting independent contractor misclassification to preventing employers from defrauding the workers’ compensation system. Key best practices for restoring effective enforcement include:

• First and foremost, increasing labor agency budgets to ensure adequate staffing and enforcement capacity
• Developing strategic enforcement priorities, in partnership with worker organizations
• Cracking down on retaliation against workers who speak up
• Reviewing and updating regulations and administrative guidance—for example, to provide clear guidance on business’s responsibilities for contract workers, as detailed below.

3. Protect Contracted Workers in our Fissured Economy

A major driver of unstable and insecure work is our increasingly “fissured” economy. Today, much of the workforce for major corporations is employed indirectly through temp and staffing agencies or other contract firms, or labeled—and often mislabeled—as independent contractors. Employees wrongly treated as independent contractors are excluded from the protections of our core labor laws, such as the minimum wage, overtime, anti-discrimination protections, workers’ compensation, unemployment insurance, paid sick leave, and paid family leave. And employees working for major companies indirectly through what are often thinly capitalized, fly-by-night contractors are left wondering who’s the boss. The practice is of particular concern in sectors where workers of color are relegated to low-paid and often dangerous work, such as janitorial, delivery, home care, agriculture, landscaping, security, hospitality, trucking, transportation, and warehousing.

Corporations’ use of these work structures—subcontracting, temp and staffing, and calling workers “franchisees” or “independent contractors”—are key drivers of eroding labor standards and occupational segregation. They shift power away from workers toward corporations, and in many cases, are employed as a tactic to side-step compliance with labor laws.

As their workforces struggle with increasingly unstable work, states are responding with policy solutions to hold major companies that are the real economic actors accountable for the treatment of these workers.

Issue Clear Guidance on Business’s “Joint Employment” Responsibilities and Misclassification of Independent Contractors. Under existing employment laws, companies that use contracted workforces to staff their operations can already be held responsible as “joint employers” for those employees’ labor standards. And many purported independent contractors are, in fact, misclassified. Tightening up joint employer and independent contractor standards and improving their enforcement are key strategies for improving accountability and job standards in the fissured economy.

In 2016, the Obama Labor Department issued guidance outlining the basis for broad joint employer enforcement under the Fair Labor Standards Act, and companion guidance on independent contractor misclassification. However, the Trump Administration withdrew both. Governors and their state labor agencies should protect workers in their states against the Trump rollback by adopting similar guidance or regulations to guide agency personnel, businesses, and workers in interpreting coverage of state employment laws such as wage and hour, anti-discrimination, unemployment insurance, and workers’ compensation.

Adopt Temp and Staffing Agency Worker Protection Laws. In 2017, Illinois adopted model temporary agency worker protection legislation. It ensures that temp and staffing agencies report demographic information about the workers they hire; never charge workers for background checks, drug tests, and credit checks; notify temp workers about the types of equipment, protective clothing, and training needed to perform the job; provide transportation back from a job site if transportation was provided to the job site; and place their temporary workers into permanent positions when they become open. Other states should follow Illinois’ lead—and build on it with additional key protections to ensure that temp and staffing agency workers receive wages and benefits comparable to that received by direct employees at the companies that employ them.

Make Host Company Responsible for Labor Violations by Contractors. In 2014, California tackled the problem of fly-by-night labor contractors cheating their workers by passing new protections making host companies jointly responsible when their contractors fail to comply with minimum wage, health and safety, and workers’ compensation laws. Other states should replicate this best practice for cracking down on wage theft in our fissured economy.

4. Protect On-Demand Platform Workers and Workers Labeled–and Often Mislabeled–Independent Contractors

For decades, corporations have characterized workers as “self-employed” as a tactic for shifting economic risk downwards onto workers while maximizing revenue for investors and CEOs. In the past, it was sectors like home care, trucking, and delivery that used these tactics. Today it is also the companies that dominate the platform economy (sometimes called the “on-demand” or “gig” economy) that are aggressively seeking to shed responsibility for the employees performing work for them. By attempting to sidestep basic employment protections—from employer social insurance program contributions, to the minimum wage and overtime, to anti-discrimination and health and safety protections—these companies are leaving their workforces impoverished and vulnerable.

As the platform economy matures, the public is gaining a clearer understanding of the poor quality of these jobs. States and cities are responding by clarifying that these workers are employees covered by our nation’s baseline employment protections, and by promoting innovative sectoral solutions to improve wages and benefits for workers in sectors where work is dispatched both on- and off-platform, including transportation and domestic work. At the same time, the multi-billion-dollar platform corporations are mounting an aggressive lobbying push to try to exempt themselves from responsibility for the well-being of their workers. Governors and legislatures should adopt the following best practices to protect this growing workforce, while fighting carve-out efforts.

Clarify That the Rights and Protections of Employees Apply to Platform Workers. States should start by clarifying—through interpretation of existing laws or by amending those laws—that state employment laws (such as state minimum wage and overtime, anti-discrimination, unemployment insurance, and workers’ compensation laws) protect platform workers. This will ensure that platform workers are treated as employees, and that platform businesses are accountable for the protections that all other employers provide.

For example, in April 2018 the California Supreme Court issued a unanimous decision in the Dynamex case that will make it harder for companies, including digital platform companies, to misclassify their employees as independent contractors. Under the “ABC” tested adopted in Dynamex, businesses that seek to treat workers as independent contractors have to show that the workers are (A) free from control and direction by the hiring company; (B) perform work outside the usual course of business of the hiring entity; and (C) are independently established in that trade, occupation, or business. This test is simple, clear, and easy to enforce. More than half of the states already have the ABC test in their state unemployment insurance laws, and several including Massachusetts, New Jersey and Connecticut have adopted it for use under their wage and hour protections.

Similarly, Oregon’s labor agency issued an opinion advising that drivers at transportation network companies such as Uber and Lyft qualify as employees who are covered by the state’s employment laws. New York has ruled that platform employers are covered under the state’s unemployment insurance law. San Francisco amended its minimum wage protections to clarify that they apply to independent contractors and employees alike. The New York City Council recently passed a slate of laws meant to guarantee a $15 minimum wage to transportation network company (TNC) drivers and to stop the race to the bottom that has impoverished taxi and TNC drivers alike. Through amendment or interpretation, states should do the same for all baseline employment laws.

Promote Innovative Sectoral Solutions. In addition to clarifying that platform workers are covered by employment laws, states should promote sectoral solutions to improve jobs, including platform jobs. For example, in 2018 Seattle passed an innovative domestic worker bill of rights that requires “hiring entities” to pay domestic workers the municipal minimum wage, allow them meal and rest breaks, and protect them from retaliation. The Seattle ordinance also sets up a system for setting industry-wide standards for domestic workers, in which domestic workers themselves will have a seat at the table. Portland, Oregon has launched a similar initiative with a newly constituted board to develop standards for drivers for transportation network company (TNC) such as Uber and Lyft.

Fight Employment Protection Carve-Out Bills. On defense, states should fight back against stealth attacks on platform worker rights, such as the “marketplace platform bills” that online platform employers have passed in several states to carve their workforces out of basic protections such as the minimum wage, unemployment insurance, and workers’ compensation. The idea that it is excessive or burdensome for the multi-billion-dollar tech giants of the platform economy to provide the same basic employment protections that all other employers must follow is outrageous, and should be rejected—as Colorado and other states have done.

5. Leverage State Employment and Contracting Power to Improve Jobs and Crack Down on Mistreatment of Workers

States have a significant impact on workforce standards in their capacities as employers, and through their contracting and purchasing programs. In their own employment, states should lead by example by adopting model employment practices around fair pay and benefits. And in contracting, states should leverage their vast economic footprint to improve jobs and crack down on mistreatment of workers.

Adopt Labor Standards for Public Employees and Employees of Contractors. Governors and legislatures should start by adopting model employment practices for their own direct employees, for employees of major state-linked institutions, such as state universities, and for vendors performing state contracts. These standards should include: (1) a $15 minimum wage for state employees, state university employees, and state contractors, as states such as Massachusetts, North Carolina, and New York have done in various forms; (2) paid sick leave as the Obama Administration required for federal contractors; and (3) other core employment standards, such as “ban the box” fair hiring protections, as detailed below. In addition, preferences for contracts should be given to unionized workplaces.

Require Public Contractors to Disclose Employment and Labor Law Violations and Related Practices. In addition, states should crack down on employment and labor law violations by state contractors by adopting state responsible contracting rules, following the model of President Obama’s Fair Pay and Safe Workplaces executive order, which the Republican Congress rolled back. States can and should require companies seeking state contracts to disclose all recent federal, state, and local employment and labor law violations, ranging from wage and hour and workers’ comp, to OSHA and NLRA violations, and discourage agencies from awarding contracts to vendors with significant or repeated violations. In addition, as noted below, states should discourage the use of forced arbitration and other coercive waivers by state contractors.

6. Fight Coercive Waivers that Prevent Workers from Enforcing their Rights and Lock Them in Poverty-Wage Jobs

Bad corporate actors are increasingly using forced arbitration and other coercive waivers of worker protections to mask wrongdoing and block working people from vindicating their rights in court. According to the Economic Policy Institute, more than 60 million U.S workers are blocked from suing their employers due to forced arbitration clauses, with women, people of color, and low-wage workers disproportionately impacted. And the U.S. Supreme Court recently ruled in its Epic Systems decision that employers can force workers into private arbitration with class and collective waivers, meaning each worker has to go it alone or, more likely, not at all.

This employer-dominated process, where settlements are secret and workers are barred from joining together to seek relief as a group, allows years of abusive treatment to remain hidden. A bipartisan group of all 50 state attorneys general in 2018 called for an end to forced arbitration for sex harassment claims. But the problem extends beyond just sex harassment and equally prevents workers who have been cheated out of their paychecks from seeking justice.

Issue Forced Arbitration Executive Orders. First, governors should push back against this abusive practice by following the lead of Washington State Governor Jay Inslee and issue executive orders ensuring that tax dollars are not invested in businesses that use forced arbitration, and that companies seeking state contracts must disclose details around their use of this abusive practice.

Adopt Whistleblower Enforcement Laws. Second, to really tackle this urgent problem, governors and legislatures should restore the ability of workers and members of the public to go to court to fight wage theft, racial and sexual harassment and discrimination, and other workplace violations on behalf of the state, by adopting whistleblower enforcement laws as California has done. Model legislation, the EMPIRE Worker Protection Act, is currently pending in New York.

Ban Non-Competes and No Poaching Policies. Third, governors, legislatures, and attorneys general should fight other coercive waivers of workplace rights such as non-compete and no-poaching requirements imposed by employers on a wide swath of low-wage and other workers. These two increasingly common practices have come under growing criticism as unfair and unnecessary limits on employees’ job mobility that are contributing to stagnant wages across our economy. There is growing recognition that non-compete and no-poaching requirements are pervasive, abusive, and not necessary, as legitimate employer concerns about trade secrets held by higher-paid employees can more appropriately be addressed through non-disclosure requirements. Governors and legislatures should join California, Oklahoma, and North Dakota by prohibiting non-compete and no-poaching requirements and include a private right of action to facilitate the enforcement of such prohibitions.

7. Rebalance our Economy by Restoring Workers’ Bargaining Power

Union popularity is the highest it has been since the Great Recession: recent polls show that 62 percent of adults support unions, including an overwhelming 75 percent of young adults aged 18 to 29. With inequality at record levels and weak wage growth for most workers despite a tight labor market, there’s a growing consensus we need strong action to restore workers’ bargaining power. By joining together through unions, U.S. workers built the middle class and expanded access to good jobs, especially for women and workers of color. Strong unions raise pay and improve workplace standards not just for their members, but across the economy.

But decades of corporate-funded attacks culminated in the Supreme Court’s anti-union Janus decision in 2018, and in a spate of attacks on unions and workers by the Trump Administration and by legislatures in several states. Workers need governors and legislatures to defend the right to organize and roll back past legislative attacks.

Restore Bargaining Power for Public Sector Workers. States directly regulate collective bargaining for public sector workers, which means governors and legislatures have a significant role to play. They should step in to defend the public sector workers who deliver the vital services that sustain our communities but who are under siege and today struggle to afford the basics for their families. Governors and legislatures should use their executive and legislative powers to reverse past state attacks that restrict public sector workers’ ability to bargain collectively for fair pay, benefits, and treatment on the job, and adopt best practices to promote workable collective bargaining in the face of the Janus decision.

Support Union Efforts to Promote Good Jobs for Private Sector Workers. While states do not regulate collective bargaining for private sector workers, they can and should play a role in supporting efforts by unions in the private sector to promote good jobs. For example, in state financed and regulated sectors, such as airports, health care, and subsidized caregiver jobs, which have been characterized by low pay and poor working conditions, unions in many states are pushing to improve wages and benefits. Governors should support these efforts, as leaders in many states are doing.

Repeal Right to Work. So-called “right-to-work” laws, passed in 27 states, make it harder for workers to form strong labor unions through which they can organize and speak with one voice on the job. These laws have led to declining union membership as well as declining wages and benefits for union and nonunion workers alike. At a time of extreme inequality in our country, governors and legislators should make it easier, not harder, for workers to unite. Governors and legislatures should repeal state right to work laws currently on the books and should fight any new right to work efforts–including efforts to adopt right-to-work at the local level.

Expand Collective Bargaining Rights for Agricultural Workers and Other Workers Not Covered by the NLRA. The agricultural workers who grow the food that sustains our communities are some of the lowest paid workers in our economy. Largely migrant immigrant workers, they face not only high poverty, but grueling and dangerous working conditions. And they are excluded from the National Labor Relations Act—meaning that they have no right to join together in a union and negotiate for fair treatment. States, however, are able to regulate collective bargaining for agricultural workers, as well as other workers such as domestic workers and independent contractors who are excluded from federal protections. States should follow the lead of California, which more than 40 years ago adopted the California Agricultural Relations Act. A campaign for similar agricultural workers labor relations legislation is underway in New York.

8. Promote Fair Hiring for People with Arrest or Conviction Records

Roughly one in three adults in the U.S. has an arrest or conviction record that can show up on a routine criminal background check for employment, undermining the job prospects of the 70 million men and women who have been caught up in the criminal justice system. This legacy of mass incarceration has an especially devastating impact on the employment prospects of people of color, who are 40 percent less likely than white applicants with a record to receive a positive response from a prospective employer.

Adopt Fair Chance Hiring. In response, 33 states, including Georgia, Kentucky, Louisiana, North Carolina, Tennessee, and Virginia, have adopted “ban the box” policies to open up job opportunities in state and local government for people with arrest or conviction records and set an example for private sector employers. Eleven states, including large states like California, and more than a dozen major cities across the U.S. extend fair chance hiring protections to private sector employers, in addition to the public sector. Governors from states that haven’t yet joined them should start by issuing executive orders adopting this reform for all state hiring. Then they and their legislatures should push for legislation to extend this best practice to the private sector, as more and more states and cities are doing.

Remove Occupational Licensing Barriers for People with Records. Today, more than 25 percent of U.S. workers must obtain a state license or certification before they can work in their chosen occupation, and onerous criminal background check restrictions often accompany these state licensing mandates. With broad bipartisan support, over the past year about a dozen states have taken bold steps to remove unfair restrictions against hiring people with records from their occupational licensing laws. In 2018, the governors of several states (Michigan, New Mexico, and Pennsylvania) took executive action directing licensing boards or other state entities to take action to address unnecessary restrictions that limit qualified people from fairly competing for jobs in their chosen professions. Governors and legislatures should follow their lead with executive action and legislation to remove unnecessary licensing obstacles to employment for people with records.

Adopt a Clean Slate Policy for People with Records. Having even a minor criminal record can be a life sentence to poverty; in addition to being a barrier to employment, it is increasingly a barrier to housing and even education as landlords and colleges use background checks to screen applicants’ criminal records. While most states allow people to petition to have their records expunged or sealed, only a tiny fraction of people eligible ever get the relief they need because they can’t afford a lawyer, pay the court fees, or figure out how to navigate the complex court petition process. Many are not even aware it’s an option. Governors and legislatures should adopt “clean slate” policies that provide for automatic record clearing once someone remains crime-free for a designated period of time. People with criminal records who have remained crime-free for four to seven years are no more likely than the general population to commit a new crime. Pennsylvania enacted clean slate legislation in 2018, and several other states, including Colorado, Michigan, and South Carolina, are considering it. A majority of voters–across party, racial, gender, and education lines–support the policy.

9. Fight Racial and Gender Discrmination on the Job and Combat High Unemployment in Communities of Color

Structural racism and gender discrimination still pervade our economy and labor markets. African American men are paid just 71 cents for each dollar that white men are paid. African American women are paid even less—just 66 cents, while white women earn 78 cents. And despite a tight labor market and record low unemployment in general, the African American unemployment rate remains nearly double the white rate.

The drivers of these deep racial and gender disparities in our job market include discrimination in hiring and pay, occupational segregation, and weak enforcement systems. Governors and legislatures should work to dismantle them with a multi-pronged approach.

Banning Employers from Asking About Salary History. There is growing national recognition that the common practice of employers basing employees’ pay in part on their salary history perpetuates unequal pay for women and workers of color, since gender and racial pay gaps are often present, even among new entrants to the workplace. In response eleven states and nine cities have banned employers from inquiring about salary history and basing compensation on it. Governors and legislatures should follow their example and adopt these sensible prohibitions–and require that employers seeking state contracts refrain from such practices.

Strengthening Civil Rights Enforcement. State human rights agencies are a first line of defense in the fight against discrimination on the job. But many have seen their budgets and staff slashed or stagnant and as a result have long backlogs and little capacity to engage in strategic enforcement. At the same time, human rights agencies are reporting a spike in discrimination and harassment complaints—a trend that is likely fueled by President Trump’s hostility to immigrants and people of color. Governors and legislatures should rebuild their state human rights agencies by restoring adequate staffing and budgets—and promoting strategic, targeted enforcement programs by these agencies to help them more effectively combat discrimination in hiring, promotions and pay, as well as workplace harassment. This includes implementing reporting systems that create greater pay transparency and deepening partnerships with community based organizations. In order to bolster enforcement of civil rights laws, states should also ensure that localities are not preempted from expanding protections beyond what the state law may provide and enforcing local anti-discrimination laws consistent with the state protections.

In addition, in recent years states have begun to enact stronger laws prohibiting unequal pay for similar work—but have not always included race-based pay inequality in these protections. California recently expanded its equal pay law, the California Fair Pay Act, to include race-based pay inequality. Governors and legislatures in other states should follow California’s lead and adopt state-of-the-art equal pay protections—and be sure that they tackle pay inequality based not just on gender, but on race and other protected statuses as well.

Promoting Targeted Hiring of Workers from High Unemployment Communities. Many cities are successfully using “targeted hiring” or “first source hiring” programs to ensure that tax-payer funded projects expand access to jobs for workers from communities with high unemployment rates. Given the disproportionately higher rates of unemployment in Black communities that have been shut off from economic opportunity for decades, these targeted hiring programs are an important step toward greater employment equity. For example, on publicly funded development projects, these programs typically require that construction contractors or end-user occupants like stadiums, hotels or retailers on development projects target a share of their hiring at workers from high-unemployment or high-poverty zip codes, by partnering with community-based job training and referral agencies. Other cities are encouraging publicly linked “anchor institutions” like universities or hospitals to enter into similar partnerships to fill health sector and service jobs, or requiring that major government service contractors hire from targeted, high unemployment communities. Examples include New York City’s multi-pronged HireNYC Program, which combines targeted hiring for construction jobs, end-user jobs on subsidized development projects, and jobs with major city service contractors.

Governors and legislatures should scale these programs up to the state level by adopting targeted hiring programs for state-linked projects and institutions that generate significant numbers of jobs, such as state-financed economic development, state service contracting, direct state civil service hiring, and state-financed institutions like universities and hospitals. In all of these spheres, states should develop systems for filling a portion of jobs with workers from high-unemployment zip codes, and develop a system of partnerships with community-based job training and referral agencies to make it work.

Inclusive Procurement and Contracting. Another key strategy for ensuring that employment and wealth-building opportunities generated by states’ infrastructure and contracting programs are shared equitably with disadvantaged communities is inclusive procurement and contracting. Inclusive procurement and contracting involves a suite of policies to ensure that minority and women-owned businesses enterprises (M/WBE’s) are fairly represented among firms selected for contracts or subcontracts on state-financed procurement and infrastructure projects. Because minority-owned firms are more likely to employ a diverse workforce, inclusive contracting programs can be an effective approach for ensuring that workers of color benefit from the jobs generated by state spending. Governors and legislatures should review their contracting programs and implement recommended strategies for ensuring equitable inclusion of M/WBE’s. At the same time, they should ensure that state-financed contracting and infrastructure projects are covered by strong labor standards, including prevailing wages, community workforce agreements for construction projects, and $15 minimum wages for service contracting, to ensure that they generate quality jobs and do not undercut high road standards.

10. Protect Workers’ Health and Safety

Nearly 50 years after Congress adopted the Occupational Safety and Health Act (OSHA) requiring employers to provide safe workplaces, more than 5,000 U.S. workers are killed on the job every year, and nearly three million are seriously injured. Many low-wage jobs are dangerous jobs, including jobs in the poultry and meat industries, agriculture, construction, and home care, where workers suffer much higher rates of serious job injuries. Yet the Trump Administration is rolling back workplace health and safety protections, leaving workers even more vulnerable.

Adopt Responsible State Health and Safety Contracting. Governors and state legislatures should fight these rollbacks by promoting model protections for workers. For example, Massachusetts is considering a model responsible contracting law for health and safety. It requires contractors and subcontractors bidding on state-funded projects to submit their health and safety violations histories—and bars contracting with companies with poor records. Legislatures and governors using their executive authority over contracting should adopt this model.

Stronger State Workplace Protections on Heat Exposure. With climate change, heat exposure is emerging as a very serious workplace health hazard in sectors from agriculture to day labor. But currently there are few standards or protections. Governors and legislatures should adopt new standards and programs to provide stronger protections for workers exposed to dangerous levels of heat, especially farm workers but also workers in construction, manufacturing, and warehousing—all sectors where workers of color and immigrants are concentrated.

Strengthen Workers’ Compensation Laws. Over the past two decades, state legislatures have engaged in a race to the bottom by hollowing out their workers’ compensation laws, resulting in unfair, weak, or nonexistent benefits for injured workers. Governors and legislatures should work together to prevent any further weakening of benefits and coverage–especially since workers’ compensation premiums and benefits are now at a 30 year low. Key workers’ compensation reforms that are needed in most states include: (1) strong anti-retaliation protections for injured workers; (2) insurance coverage for prompt medical care in contested cases; (3) extending coverage to all workers, including domestic workers, farm workers, and temporary workers; and (4) ensuring that workers have the right to choose their own doctor.

Fighting Sexual Violence on the Job. Low-wage workers such as janitors, hotel room cleaners, and waitresses are especially vulnerable to sexual assault and violence in the workplace, as many work in isolation and feel powerless to speak up. California responded in 2016 with the Property Services Worker Protection Act, which helps protect janitors from rape on the job by mandating sexual harassment and assault prevention training, and registration of property services contractors. Similarly, cities including Chicago, Seattle, Oakland, and Long Beach, California have enacted measures to protect hotel room cleaners that require that they be provided panic buttons to use when they enter rooms alone, and also establish workload standards to protect room cleaners. Governors and legislatures should follow the lead of these states and cities in protecting low-wage workers from assault at work.

11. Promote Quality Caregiver Jobs

Our nation is facing a care crisis. States are struggling to provide adequate access to quality affordable home care and child care services for seniors, people with disabilities, and working families, at the same time that they struggle to improve the quality of these vital caregiving jobs. A big part of the problem is chronic underinvestment in the home care and child care workforces, which are some of the lowest paid in our economy, promoting high poverty rates and workforce instability among these vital caregivers–many of them women of color and immigrants.

Governors and state legislatures should join the states and cities that are tackling this crisis with new approaches that expand access to these vital services for all families, while investing in upgrading the jobs.

Expand, Enforce and Adequately Fund Minimum Wage, Overtime and Paid Sick Days Protections for Caregivers. States finance and regulate a large swath of the home care workforce through their Medicaid long-term services and supports programs. Governors and legislatures should ensure that these vital caregivers receive an adequate minimum wage, overtime pay coverage, and paid sick days protections, along with any other benefits. First, they should ensure that their Medicaid home care programs are implementing–and adequately budgeting for–the Obama Labor Department’s 2015 “companionship” rule that finally extended federal minimum wage and overtime protections to homecare workers. For example, they should follow the lead of states such as California, which budgeted extra funding for its consumer-directed Medicaid funded home care program to account for overtime and travel time between consumers. States must also ensure that consumers have access to quality and adequate home care services that allow for them to remain at home and within the community. Second, they should guarantee a $15 minimum wage for Medicaid home care workers–which governors can do by executive action and negotiate funding for as part of the budget process, as Massachusetts Governor Charlie Baker did. Third, they should extend similar $15 minimum wage to workers in the state’s subsidized family child care provider program–as Massachusetts also recently did as part of a 2018 minimum wage package. Lastly, states should ensure that their state laws cover home care, child care, and other domestic workers–and that they provide robust enforcement mechanisms to ensure workers’ rights are upheld.

Raise Caregiver Wages by Increasing Medicaid Reimbursement Rates for Long-term Care Services. The rates at which Medicaid reimburses providers for the long-term care services they provide seniors and people with disabilities can factor into caregivers’ low-wages. In many states, Medicaid reimburses homecare expenses at hourly rates that may provide too little to adequately pay these workers living wages or even cover homecare agency operating expenses. Increasing these reimbursement rates to ensure workers can earn living wages and have benefits, and requiring that the majority of the increase go to workers’ wages, will ensure that homecare jobs can provide workers with a decent living. States should also ensure that their consumer-directed rates are adequate to ensure home care workers make a living wage.

Create Universal Home Care with Quality Jobs. In Maine, an innovative campaign seeks to establish a Universal In-Home Care Program. It would expand access to subsidized home care services for all Mainers, regardless of income, while simultaneously creating a program board charged with improving wages, benefits, and working conditions for the home care workforce. The campaign to adopt this policy by ballot initiative fell short in 2018, but advocates are hopeful about pursuing similar legislation in the state legislature in 2019.

Expand Affordable Child Care with Quality Jobs. In Alameda County, California, a similar campaign is proposing to create an expanded subsidized child care program for lower income and middle-class families. It combines opening up affordable child care to more of the working class, with upgrading subsidized child care jobs significantly, financed by a half-cent sales tax increase.

12. Update and Defend Social Insurance Programs for All Workers

Vital social insurance programs on which working families rely have been under attack by the Trump Administration and by governors and legislatures in many states in recent years. As new governors and legislatures take office, they should take strategic action to restore these vital programs for workers in their states–and prepare their economies for the next recession or natural disaster.

Repeal Medicaid Work Requirements. Several states have instituted or are seeking federal permission to impose short-sighted and punitive work requirements on residents seeking health care coverage under Medicaid. These policies aim to take basic health care away from low-income workers and people with disabilities, many of whom work but are unable to keep up with the burdensome documentation requirements under such programs. New governors and legislatures should reverse such waivers and restore health care access for low-incomes residents in their states.

Restore a Strong Unemployment Insurance System. After poor financing decisions caused more than 40 states to bankrupt their unemployment insurance (UI) trust funds during the Great Recession, many states slashed their UI programs. Even before the recession, the UI program needed reform; that’s even truer today, with only about one in four unemployed workers receiving UI benefits. With another cyclical recession likely in the coming years, states should act to restore hard-earned benefits under their programs to protect workers, their families, and their communities from the inevitable downturn. NELP’s extensive toolkit details a full range of key UI reforms that many states have already implemented. Key reforms include a minimum uniform 26 weeks of benefits, work-sharing programs to preserve jobs in times when companies are struggling or during a recession, and reforms to provide UI protection for part-time workers who lose their jobs–a significant segment of the workforce, where women and low-wage workers are concentrated.

Prepare for Disaster Unemployment Assistance. For states that face regular natural disasters, modernizing Disaster Unemployment Assistance (DUA) systems is crucial for helping workers who lose their jobs during disaster recover from such devastating losses. All states affected by disasters should make key reforms. First, they should suspend or get rid of the “waiting week,” which only delays support to workers. Second, given the difficult realities and limitations facing those seeking work in a disaster area, the affected states and territories should significantly relax or suspend their work-search mandates. States should also take steps to boost UI benefits and authorize “non-charge” benefits paid as a result of a disaster.

Protect Public Sector Pensions. As the United States faces a looming retirement crisis, many states are looking to slash guaranteed retirement plans for the one segment of the population that still has a modest but secure benefit–public sector workers. While some states skipped contributions to their pension funds, workers have always paid their share. But some policymakers are asking workers to sacrifice their future for the mistakes past lawmakers made. A solid retirement plan is a public good. It helps states and cities attract and retain great teachers, firefighters, and caregivers while also providing a boon to the local economy when those workers retire in their communities. States should maintain and fund secure public sector retirement plans–and work simultaneously to develop new retirement options for private sector workers.

13. Empower Local Communities by Fighting Preemption

In recent years, big corporations and their lobbyists have not only blocked state efforts to raise the minimum wage, guarantee paid sick days, or address other worker needs, but when cities and counties have tried to tackle these problems, the corporations and their lobbyists have stepped in to tie their hands with “preemption laws.” Like voter disenfranchisement and political gerrymandering, these preemption laws are part of a corporate strategy by groups like the Koch Brothers-funded American Legislative Exchange Council (ALEC) to stymie progressive action. These preemption efforts are disproportionately impacting efforts by communities of color to improve local economic conditions and address specific localized concerns. Governors and legislatures should pledge to block or veto any new attempts to limit local power to address worker needs, and should work to roll back existing limits. For example, they should follow the lead of Colorado Governor-elect Jared Polis, who is backing a campaign in the legislature to repeal wage preemption in that state. At the same time, however, state leaders should fight any local efforts to undercut established worker protections, such as illegal local “right to work” efforts, or punitive local anti-immigrant measures.

14. Enable Workers to Balance Work and Family Demands by Guaranteeing Paid Sick Days, Paid Family Leave and Fair Scheduling

The U.S. lags far behind the rest of the world in ensuring basic protections to allow workers to balance the demands of work and family life such as earned paid sick days and paid family leave. And the growing problem of irregular and unpredictable work schedules, fueled by new scheduling technology, is posing serious hardship for working families. Governors and legislatures follow the lead of the growing numbers of states and cities that are responding by guaranteeing paid sick days and paid family leave, and by adopting fair workweek scheduling legislation.

Paid Sick Days. More than 34 million workers in this country don’t have a single paid sick day — and each time they take needed time off, they risk their families’ economic security and jeopardize the public’s health. Governors and legislatures should join the eleven states and dozens of cities that have adopted earned paid sick days laws to ensure that all workers have access to this most basic of protections.

Paid Family Leave. Sixty percent of the U.S. workforce does not have access to paid family leave when they need to take time off from work after the birth or adoption of a baby or in case of illness. As a result, millions of workers either cannot take the time they need, or must take it with no pay–and with no guarantee that their employer will hold their job for them when they return. In response, more and more states are establishing paid family leave insurance programs to provide workers with a share of their wages when they need time to care for a family member with a serious health condition, bond with a new child or deal with their own serious medical issue. Governors and legislatures should follow their lead and adopt paid family leave for their states.

Fair Workweek. There is growing recognition that unpredictable, unstable, and often insufficient work hours are a key problem facing many U.S. workers, particularly those in low-wage industries. Volatile hours not only mean volatile incomes, but add to the strain working families face as they try to plan ahead for child care or juggle schedules in order to take classes, hold down a second job, or pursue other career opportunities. The problem has been made worse by new scheduling technology that has enabled many retail and fast food employers to adopt last minute, “just in time” scheduling.

In response, states and cities are starting to adopt “fair workweek” laws that provide workers with greater stability, predictability, and flexibility in their work schedules. In many cases, they also require employers to give part-time staff opportunities to increase their hours before adding new staff. Governors and legislatures should follow their lead and push for fair workweek legislation to protection workers in their states.

15. Protect Immigrant Workers

Immigrant workers are vital members of our communities and contributors to state economies. But President Trump is bent on scapegoating immigrants and driving them back into the shadows. Governors and legislatures should take a strong stand to support immigrant workers rights and protect workers against immigration-based retaliation.

Ensure That Employment and Labor Laws Protect All Workers and Fight Retaliation. States should affirm that their employment and labor laws, such as the minimum wage and workers compensation, protect all workers regardless of immigration status. All workers need basic protections–and failing to enforce the law for undocumented workers hurts responsible employers and documented workers alike. It also creates incentives for employers to exploit undocumented workers in their workforces. States should also adopt strong anti-retaliation policies to protect workers who come forward against employer retaliation or ICE interference.

Provide Guidance for Employers About Immigration Status Verification and Worksite Immigration Enforcement. Employers need guidance on immigration status issues to help them avoid over-reacting and inadvertently cooperating with anti-immigrant attacks. States should provide guidance on best practices for responding to ICE workplace enforcement and immigration status verification, including educating employers that there is no need to re-verify DACA or TPS holders’ workplace authorization, and that Social Security Administration no-match letters are not proof of undocumented status.

Protect Civil Rights and Public Safety. States should also promote civil rights and public safety in their communities by keeping immigration enforcement out of policing. As law enforcement leaders have explained, allowing police departments and other state or local officials to cooperate with ICE seriously compromises public safety by eroding immigrant communities’ trust in law enforcement. Governors and legislatures should prevent state taxpayer money from being used to enforce the Trump Administration’s xenophobic agenda and refuse to subsidize immigration enforcement or incarcerate individuals because of an ICE detainer.

Promote Access to Drivers’ Licenses. States should also expand access to drivers’ licenses for all workers, regardless of immigration status to promote public safety. Ensuring that all workers can obtain drivers’ licenses improves traffic safety, reduces uninsured motorist accidents, and benefits the economy.

16. Protect Savers from being Ripped Off by Wall Street

In 2016, the Obama Labor Department issued a new rule requiring financial professionals to put their customers’ interests first when providing retirement investment advice. This “fiduciary rule” required financial professionals to rein in conflicts of interest, like kick-backs and sales contests, that encouraged them to cheat their clients. Every year, retirement savers alone lose more than $17 billion due to financial advisors’ conflicts of interest, and the losses are much greater when one considers all accounts and all products.

Wall Street and its allies in the insurance industry mounted a relentless attack on this common-sense ban on predatory investment practices, since it would have cut into their profits. They challenged the rule in court and found a sympathetic panel that was willing to block the rule. Siding with the industry, the Trump Administration abandoned the rule. Now the Securities and Exchange Commission is in the process of replacing it with a far weaker, watered-down rule backed by the same industry groups that fought against real protections in the first place.

Governors, legislatures, and state regulators can and should step in to protect investors against this Trump rollback by adopting a strong fiduciary rule for financial professionals in their state. Unlike the Labor Department rule, which applied only to retirement accounts, and the SEC proposal, which would apply only to securities accounts, states can adopt a fiduciary rule that applies to all financial professionals who provide investment advice, including both securities and insurance professionals, and that protects all investors, retirement and non-retirement alike.

17. Promote Economic Development That Generates Broadly Shared Prosperity

After decades of income inequality and wage stagnation, it is increasingly clear that topline economic growth does not produce bottom line prosperity. As a result, states need to pursue equitable economic development policies that spread the benefits of GDP growth more widely, especially to communities of color, which thanks to historically-rooted patterns of discrimination continue to lag the national average in wages, wealth, and social mobility. This kind of equitable economic development is focused not just on topline GDP growth or the total number of jobs in a community, but on the quality of the jobs—their wages, benefits, and prospects for upward mobility. It focuses on boosting the capacity of communities to build their own economic momentum and seeks to bring marginalized and disconnected workers into the labor market, rather than relying solely on outside capital to fuel growth and prosperity. In turn, this requires leveraging existing assets that train these workers, boost the productivity and innovative capacity of existing businesses, and leverage the critical supply chains and industry clusters that globally competitive businesses need to thrive. And it means intentionally extending these efforts into underserved communities, including rural areas and communities of color. This kind of economic development starts with the basic objective of making sure these programs actually deliver on their promises through better accountability and transparency, and then takes a step forward by incorporating equitable development practices into the state economic policy toolbox.

Improve Transparency for Economic Development. Each year, states spend tens of billions of dollars in economic development subsidies designed to lure businesses—and theoretically jobs—to their states. As the highly publicized Amazon HQ2 tax-break sweepstakes has revealed, big economic development decisions are made largely behind closed doors, leaving taxpayers with little to no input. When taxpayers do seek to participate, they often find that they cannot obtain even the most basic information about the deals being considered. The result is that a company’s announcement to build in an area, accompanied by the government’s announcement of a large subsidy package, is often the first official word the public hears about a development project.

Far too frequently, press announcements of economic development deals tout the projected number of jobs that will be created, but the fine print is full of loopholes. Even if a development deal is tied to jobs created or dollars invested, other big accountability safeguards are often missing. Will the actual jobs created and wages paid be publicly disclosed? Will the jobs pay living wages? Provide health and retirement benefits? Give local residents a chance to get hired? Be accessible via public transit? Be environmentally responsible? Create affordable housing? Preserve open space?

All too often, governments overspend on development deals, starving the public services communities rely on. Revenue lost to tax breaks would otherwise improve schools, roads, transit, public safety, and other public services that benefit all employers and working families.

Require Every Economic Development Project to Actually Create the Promised Jobs Before Awarding Public Dollars. All too often, companies never deliver on the jobs and investment they’ve promised in exchange for public subsidies. Governors and legislatures should protect taxpayers and ensure these programs are effective by requiring every company that receives a subsidy award to actually create the jobs they promised before they receive any public dollars. In some states, these programs also “clawback” or take back any public dollars that were given to companies once the company fails to meet job creation milestones.

Disclose Economic Development Deals. In many states, governors will inherit an incentive system where economic development deals are poorly disclosed. According to Good Jobs First, only one in four major state development programs reports on the number of jobs actually created or workers trained, and only one in eleven reports on wages actually paid. Alabama, Georgia, Hawaii, Idaho, Kansas, Maine, Nebraska, New Hampshire, New Mexico, Nevada, South Carolina, and South Dakota all rank in the bottom 15 among the states according to a national survey by the group. Governors should use their administrative powers to disclose the costs and benefits of every economic development deal, online, as has been common practice in many states for many years. Since economic development is an executive branch function, many states have first disclosed incentive deals pursuant to executive action. Some have later codified the practice in law, but legislation is not typically necessary.

Adopt a Unified Economic Development Budget (UEDB). UEDBs compile every kind of state spending for economic development: tax expenditures, program and agency appropriations, grants, loans, and even workforce development. Invariably, they show that tax breaks are literally the bottom of the iceberg, bigger than appropriations by ratios of 4:1, 6:1 and even higher. Yet tax breaks are far less likely to be disclosed, receive a performance audit, or be sunsetted. Governors should require the state Revenue Department to publish a Unified Economic Development Budget, so that lawmakers can see the big picture and make sure priorities are correctly balanced.

Report Tax Revenue Lost to Corporate Tax Breaks. In 2015, the Governmental Accounting Standards Board (GASB) issued Statement 77 on Tax Abatement Disclosures, which requires most localities (including school districts) and states to disclose the amount of tax revenue they lose annually to economic development tax abatement programs. Only one year’s data is out yet, however compliance with Statement 77 is uneven so far. Governors should propose legislation, or when possible direct the state auditor, comptroller, or treasurer to improve compliance with Statement 77, and also to put the new disclosures online. Bernalillo County, New Mexico, issued a recent report than can serve as a model for cities, counties and states around the country.

Combine Equitable Development Practices with Traditional Economic Development Tools Like Business Incentives. Alongside strong accountability measures, traditional tools like business incentives can be dramatically improved by adopting key equitable development practices. The first is to target incentives to retaining and supporting existing, locally-owned businesses, rather than relying on branch plants and headquarters from outside the state. Dollars spent on locally-owned businesses have long been understood to have a bigger economic impact as they circulate through the local economy than mobile firms based in other states.

A second key strategy is to direct incentives to firms in key supply chains or in industries supported by comprehensive development strategies that combine workforce training, research and development, and small business development to build out entire sectors. The growth of biotech and aerospace in North Carolina are good examples. These sector development efforts have been shown to improve the job creation and investment outcomes for the incentive projects in those industries.

Connect Marginalized Workers to Jobs Through First Source Hiring Agreements with Employers. As discussed above, targeted or first source hiring is a policy designed to ensure that private sector businesses and local governments recruit and hire disadvantaged employees. Local governments and community-based organizations across the country have successfully used first source hiring as a way of targeting training, economic development, public jobs, and public contracts to residents of the economically distressed areas or neighborhoods that most need job training and employment opportunities. First source hiring policies often require businesses receiving economic development incentives to give preference in their pre-employment screening and hiring processes to potential employees recommended by a specific, named intermediary, often a community college or community-based training organization. For example, a local community college could recruit students from a distressed neighborhood into a customized training program created for a specific employer. The students receive customized training and then are given preference for interviews and screening with the employer once they’ve completed the program.

18. Promote and Fund Affordable Housing

There is an unprecedented national housing affordability, habitability, and eviction crisis that requires a bold statewide response. Across the country, nearly 11 million renters pay over half of their income for rent and utilities, and tenants, manufactured homes residents, and low-income homeowners are rising up for housing justice in response. The affordable housing and eviction crises have grown significantly worse with no minimum wage worker able to afford a 2 bedroom apartment anywhere in the country without paying more than 30% of their income in rent. At the same time, the vast majority of tenants are without rent or eviction protections, leaving them at the whim of corporate landlords to raise rents, decreasing families’ economic security. According to the Eviction Lab, one out of four severely rent-burdened families spends over 70% of their income on rent and utilities and only one in four families who qualify for affordable housing receive housing assistance.

Key best practices for state based interventions to significantly address the affordable housing crisis and alleviate evictions are (1) expanding state funding for affordable housing, and (2) passing a comprehensive program of tenant protections including rent controls and just cause eviction protections.

Fund Affordable Housing. The greatest housing crisis exists for the lowest income renters who are most at risk of homelessness and displacement. States can alleviate the housing crisis through fully funding public housing and preserving at-risk affordable housing, as well as through fully funding housing trust funds, rental assistance programs, and state-based affordable housing programs. States should prioritize housing programs for both preservation and new construction for low-income and extremely low-income tenants, defined as those earning under 50% of Area Median Income, with a priority for those earning under 30% of Area Median Income.

Protect Tenants. The vast majority of renters live in unregulated housing without tenant protections, leaving them at great risk to housing insecurity. States should expand and strengthen tenant protections through implementing state-based rent control and just cause eviction protections to limit rents and increase eviction protections—and by repealing preemption to empower cities to adopt such protections. Rent control is a system of tenant and rent protections that can curb the crisis of evictions, displacement, and housing unaffordability. It protects tenants from profiteering landlords through a combination of rent restrictions, just cause eviction protections, and a system of holding landlords accountable for poor and uninhabitable conditions. Beyond rent control, states should increase resources to legal services for eviction defense; implement renters’ tax credits; create anti-discrimination protections for those using Section 8 and other assistance programs; and fund robust code enforcement to improve conditions and services for substandard and uninhabitable housing.

Paul Sonn, National Employment Law Project (NELP), psonn@nelp.org

Naomi Walker, Economic Analysis and Research Network (EARN),
Economic Policy Institute (EPI), nwalker@epi.org