Key Takeaways:

• Colorado Amendment 87 would help fix a structural funding problem that has undermined the state’s public services for 35 years. The measure would modestly raise taxes on the top 3% of taxpayers while generating $2 billion in revenue.
• Florida Amendment 3 would devastate public services across the state. It would cut annual local government revenue by an estimated $12 billion, equivalent to 17% of statewide local government compensation. This translates to 123,000 jobs at risk of being cut from local government payrolls across the state.

Lots of media attention around the upcoming midterm elections is understandably focused on which party will win control of Congress, as well as the many state legislative chambers and governorships that are up for grabs. However, there are also over 150 state ballot measures going before voters next month, some of which will be tremendously consequential in shaping state economies for years to come. Two such proposals warrant greater attention: Amendment 87 in Colorado and Amendment 3 in Florida. Both would be transformative for their respective states—the former in positive ways, the latter in catastrophic ones.

Colorado Amendment 87 would make the state tax system fairer while boosting revenues for essential public services

On November 3rd, Colorado voters will vote on Amendment 87, a measure that would replace the state’s constitutionally mandated flat tax—which requires a teacher’s aide making $40,000 a year to pay the same tax rate as a billionaire tech CEO—with a progressive, graduated income tax. The new tax system would maintain current tax rates on households and businesses earning $100,000–$500,000 a year, lower taxes for those making less than $100,000 a year, and raise taxes modestly on households and businesses making more than $500,000 a year. All told, these changes would mean a modest tax increase on the richest 3% of Colorado taxpayers, with everyone else in the state paying the same or less than before.

In a state and country shaped by tremendous income inequality, even modest changes to tax rates on the highest earners—like those being considered in Colorado—can yield substantial new revenues. Analysts estimate Amendment 87 would generate over $2 billion in new funds to support public education, health, and child care in the state. (The state’s general fund gross revenues for FY25–26 were projected to be about $17 billion, so a $2 billion increase is sizable.)

In many ways, the Colorado measure is not very different from other high-earner taxes passed in Maine, Washington, Rhode Island, and Hawaii this past year. Massachusetts’ “fair share” tax, adopted by voters in 2022, has been a huge success, exceeding revenue projections and funding significant investments in public transit, free school meals, free community college, and early childhood education.

Amendment 87 is notable because it would begin to fix the state’s uniquely broken funding system. In 1992, Colorado voters adopted a “Taxpayer’s Bill of Rights” (TABOR) amendment that caps state revenue even when the state economy grows. Colorado is the only state that has such a measure, and for over 30 years, it has kept the state’s public services from keeping up with a growing and aging population. Low teacher salaries have driven high teacher turnover in Colorado public schools, many of which have increasingly had to shift to four-day school weeks. The state workforce has similarly struggled with turnover, and federal funding cuts to Medicaid, among other programs, exacerbate existing strains on programs serving one of the fastest aging populations in the country.

Unsurprisingly, opponents are making typical arguments that the measure would cause high earners and small businesses to flee the state en masse—arguments that empirical research has thoroughly debunked. Colorado’s Governor Jared Polis, himself a wealthy tech entrepreneur, has claimed the measure would hurt small businesses, though independent analysis from the Institute on Taxation and Economic Policy (ITEP) found that the corporate tax changes would fall overwhelmingly on large multinational corporations with shareholders located across the globe. ITEP estimates that 90% of the corporate impact would fall on people who aren’t Coloradans.

Amendment 87 would go a long way toward fixing a nearly 35-year-old structural funding problem that has hamstrung public services in Colorado while making the state tax system fairer. If voters there see through the fearmongering, it could help motivate lawmakers and advocates in other states to pursue similar tax changes critical to bolstering vital public services, combating inequality, and improving outcomes for everyday working families.

Florida Amendment 3 would lead to substantial job losses and public service cuts

Florida Amendment 3, a constitutional amendment placed on the ballot by the state legislature at the request of Governor Ron DeSantis, would fundamentally undermine Florida local governments’ ability to raise revenue and fund public services. The measure would dramatically increase the state nonschool property tax exemption on homesteads from the current $25,000 to $250,000 in 2028, indexing it to inflation thereafter; lower the 10% assessment growth cap on all other properties to 5%; and require the legislature to establish procedures allowing local governments to raise homestead exemptions even further—opening the door for potential full elimination of nonschool property taxes. The state Office of Economic and Demographic Research estimates that the amendment would cut local tax revenue by nearly $14 billion in the first two years alone and structurally reduce local tax revenues by nearly $12 billion annually thereafter.

Funding losses of this magnitude would be devastating for public services in every community across the state. Keep in mind that when analysts describe funding cuts and reductions in “public services,” what they’re often really describing is people—who work on behalf of their neighbors and communities—losing their jobs.

To make Amendment 3’s potential damage concrete, we can compare the estimated permanent funding losses with current local government compensation and employment data in the state to get a rough sense of the potential shock to local government employment.

The map above shows the projected permanent revenue losses that would result from Amendment 3 for every Florida county. It also shows what these losses represent as a share of total compensation of local government employees in each county. (Table 1 below contains the same data for all counties and the state overall.) The data show that the projected funding losses are equal to roughly 17% of total local government compensation statewide, rising as high as 39% of compensation in Flagler County.

The map and table also report local government employment as of 2025, which statewide totaled almost 720,000 workers. If local governments were forced to cut staffing in direct proportion to their funding losses, it would mean job losses for almost 125,000 local public-sector workers across the state. In Flagler County, a 39% loss in public-sector employment translates to over 1,500 people losing their jobs. Notably, Flagler county—a relatively small Atlantic-Ocean-adjacent county north of Daytona Beach—had fewer than 29,000 jobs total in 2025, meaning that a loss of 1,500 jobs would be over 5% of total employment (public and private) in the county.

Of course, not every county and municipality will absorb these funding losses entirely through staffing cuts; most will likely adopt a mix of staffing cuts, reductions in services, fewer supply purchases, canceled contracts with private vendors, and possibly sales of public assets. Each of these would have ripple effects on local households and businesses. If a county, for instance, is forced to stop contracting with a local lawn care or building services company, those formerly contracted local businesses could also have to cut staff.

Local governments will also likely try to increase revenues from other sources, such as service fees and tax increases on entities not eligible for the amendment’s exemptions. For instance, Amendment 3 does not provide an expanded tax exemption for non-homestead properties—meaning that commercial property owners will likely see their property taxes rise, which they could very likely pass on to renters and tenant businesses.

This would shift more of the local tax bill away from homeowners and onto renters, who are typically less wealthy. With no income tax and a large portion of state and local revenues generated by sales and excise taxes, Florida already has the most regressive tax system in the country. The lowest-income taxpayers in the state pay effective tax rates nearly five times higher than the top 1% of taxpayers.

If voters adopt Amendment 3 next month, the consequences for communities across the state will be dire. Researchers at the Florida Policy Institute have described in detail how Amendment 3 would gut resources for public hospitals, child and family services, and emergency and disaster response services, among other things. In the short run, especially as the labor market is looking increasingly unsteady, enacting massive funding cuts to local governments is incredibly foolish just for the direct impacts it will have on jobs and spending in local economies. In the long run, the harm to the welfare of Florida residents from a severely diminished public sector could be devastating.

Together, these measures show how much is at stake on state ballots this November. Colorado could begin to fix a decades-old structural funding problem, while Florida may create a new one of its own—one that would strip billions from local governments and the services they provide.

Table 1

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Strengthening collective bargaining rights is one of the most powerful policy levers states have available to confront primary economic challenges facing all workers today: an affordability crisis driven by the long-term suppression of workers’ pay, growing income inequality, and persistent racial and gender labor market disparities. It’s widely recognized that in today’s wildly unequal economy, millions of workers wish they had a union contract but face daunting obstacles to exercising their legal rights to get one. Moreover, many workers have never been protected by federal labor law at all due to Jim Crow-era exclusions.  

For the second year in a row, Colorado and Virginia state legislators have passed landmark legislation to remove barriers to unionization:  

• In Colorado, legislators have passed the Worker Protection Act to repeal an 83-year-old state policy that has limited Colorado workers’ freedom to form unions by requiring they undergo a state-mandated “second election” before they can secure full collective bargaining rights.  

• In Virginia, lawmakers have passed collective bargaining legislation to ensure full union rights for more than 500,000 state and local government employees and home care workers—all of whom have historically been denied coverage under federal labor law. The legislation would replace Virginia’s longstanding ban on public employee collective bargaining that has resulted in one of the largest public-sector pay gaps in the nation. 

Both pieces of legislation would correct historical wrongs—restoring rights that Colorado and Virginia workers have been denied since the 1940s, when past state lawmakers adopted anti-union policies amid a wave of white supremacist, big business backlash to multiracial union organizing. Yet both pieces of legislation were vetoed by their states’ respective governors in 2025 and are now once again awaiting governors’ signatures in 2026. 

In Colorado, Governor Polis has already indicated intent to once again veto the Worker Protection Act, but it’s not too late for Polis to seize his second chance to sign the bill.  

In Virginia, Governor Glenn Youngkin vetoed the collective bargaining legislation in 2025 and was ineligible to run for reelection because of term limits. This year, when the legislation was first sent to newly elected Virginia Governor Spanberger, she proposed extensive, damaging amendments to weaken the bill instead of signing it. The General Assembly has since rejected those amendments, and now Spanberger has her own “second chance” to sign this transformative legislation into law. 

Meanwhile, scores of anti-worker actions from the Trump administration are continuing to accelerate a decades-long trend of weakening workers’ rights, suppressing wages, and eroding bargaining power. This year, state lawmakers have handed both Governor Polis and Governor Spanberger historic opportunities to rebalance unequal power in their states’ economies and remove major obstacles Coloradans and Virginians face to exercising their rights to unionize and collectively bargain. And the choices Polis and Spanberger make in the next few weeks will shape economic outcomes in their states for years to come.

Summary

Roughly 30,000 farmworkers in Colorado, including 4,400 migrant workers recruited by Colorado employers through the H-2A visa program, are treated unfairly under federal and state law. While Colorado took an important step when the state’s overtime law was reformed to make farmworkers eligible—acknowledging the racist policy enshrined in the federal Fair Labor Standards Act that excluded farmworkers from overtime pay—the law nevertheless continues to treat farmworkers unfairly with limited overtime protections compared to those provided to other workers in Colorado.

Farmworkers are some of the lowest-paid employees in the entire U.S. labor market and suffer from high rates of occupational injuries and death. As discussed in this commentary, growth in farmworkers’ very low wages has tracked very similarly to wage growth of other low-wage workers in recent decades. Yet farmworkers must work dramatically more hours than workers out side of agriculture before they can receive any premium for working long hours. There is no economic justification for this unequal treatment. Further evidence for this is the fact that according to the U.S. Department of Agriculture (USDA), labor costs as a share of farm income have not increased in two decades.{{1}}

This commentary explains and shows that:

• Overtime pay for farmworkers increases productivity and protects employees from being overworked.
• Farmworkers nationwide earned some of the lowest wage rates in the entire U.S. labor market and only three-fifths of what non-farm workers earn.
• Farmworkers in Colorado earn very low wages—half the average wage earned by all workers in Colorado.
• Wage growth over the past 20 years for farmworkers nationwide has been almost identical to wage growth for other low-wage workers outside of agriculture.
• Real wage growth for farmworkers in Colorado has averaged only 1.5% per year between 2010 and 2024.
• The number of Colorado farms has increased significantly over the past 15 years, suggesting a successful and growing industry in the state.
• California overtime pay standards cover more farmworkers than in Colorado, and outcomes there have shown that providing farmworkers with overtime pay protections on par with those applicable to workers outside of agriculture can be achieved without negatively impacting the farm industry.

If SB 26-121 becomes law, the resulting overtime threshold would further degrade standards for some of the lowest-paid and most vulnerable workers in the U.S. labor market, without improving productivity or benefitting the state’s economy. Farmworkers deserve better: they deserve equal rights and equal pay. While there is some cost to paying workers overtime, keeping the threshold where it is or taking it to 40 hours per week will be partially offset with productivity gains and will benefit farmworkers—most of whom are not employed year-round—by relieving some of the pressure they feel to work as many additional hours as possible, to the detriment of their health, safety, and family life—and possibly to the quality of the nation’s food supply.

Introduction

Farm labor is hard work that sometimes requires very long hours. When it does, workers deserve to be paid fairly for their time. The reason a 40-hour overtime threshold for farmworkers is not already the law should make us wince: When the federal law that governs overtime pay was written in the 1930s, it excluded two job categories that were overwhelmingly held by African Americans—farm laborers and domestic workers. States now have an opportunity to right this historic wrong and level the playing field for all workers

Overtime pay for farmworkers increases productivity and protects employees from being overworked

How do farm owners accommodate paying higher weekly wages when they ask their employees to work overtime? There is of course, some expense associated with overtime pay for farmworkers. But it’s not a dollar-for-dollar cost, so the impact is ultimately modest. The reason is increased productivity.

As we have seen in many other instances, when employers are required to pay higher wages, they make a bigger effort to increase the efficiency of the workplace. We’ve seen this when the minimum wage has been increased. We’ve seen it in unionized businesses. And we’ve seen it already on farms in states like New York and California, when farm owners were required to pay overtime.

What does an increase in productivity on farms look like?

Farm owners may invest in equipment that makes work easier and faster for workers. They may also find ways to organize work that is more effective. Paying overtime provides a real incentive for that. And, overtime pay will reduce the cost of recruitment and training, because it will reduce turnover. That’s something farm operators should value since most claim there are too few farmworkers available to fill open positions.

But importantly, it will also ensure that farmworkers do not work excessive hours just to make enough to survive. Farmworkers in Colorado earn wages that are not much above the state minimum wage, and because of the seasonality of farm work, most are not even able to earn those low wages year-round, reducing their earnings even further. Since farmworkers are not able to earn a living wage year-round, they will feel pressure to work additional hours, to the detriment of their health, safety, and family life—and possibly to the quality of the nation’s food supply.

Colorado’s current overtime threshold is also very different than the one in a state like California. In California, farmworkers earn time-and-a-half overtime after 8 hours in a day or 40 hours in a week.{{2}} They also earn double their regular rate of pay after working 12 hours in a day. Colorado’s overtime threshold has no daily limit, only a weekly one. Even with the additional coverage of overtime for California farmworkers, the number of farm establishments has held steady in the state: going from 16,408 in 2015, the year before the California overtime law was passed, to 16,416 in 2024—suggesting that farms have not been negatively impacted and are still able to operate successfully in the nation’s largest agricultural state.{{3}} 

Farmworkers earned some of the lowest wage rates in the entire U.S. labor market in 2024 and only three-fifths of what non-farm workers earn

It is important to discuss and contextualize the wages of the 2.2 million farmworkers in the United States,{{4}} roughly 350,000 of whom are crop farmworkers employed through the H-2A visa program.{{5}} DOL’s National Agricultural Workers Survey (NAWS) shows that two-thirds of non-H-2A crop farmworkers are foreign-born, and that one-third are U.S.-born citizens.{{6}}

The agricultural industry has made numerous claims about skyrocketing and unsustainable wage growth for farmworkers, and the industry has lobbied at the state and federal level, pushing for federal actions by the executive branch and legislation to artificially restrain wage growth in the industry. As this letter discusses, many of the major claims made by the industry are not supported by the available evidence.

The most reliable data on farmworker earnings comes from the U.S. Department of Agriculture’s (USDA) National Agricultural Statistics Service (NASS), which conducts the Farm Labor Survey (FLS), the results of which were, until recently, published twice a year in USDA’s Farm Labor report series, with data reported for reference weeks in January, April, July, and October.{{7}} On August 28, 2025, USDA announced that it would discontinue its data collection program and reports, including the FLS,{{8}} thus making 2024 the final full year for which FLS data are available. Before October 2025, FLS data was used by the U.S. Department of Labor (DOL) to set the Adverse Effect Wage Rate (AEWR) for most migrant farmworkers hired in the H-2A program. DOL based the AEWR on the average hourly earnings of nonsupervisory field and livestock workers, as reported by farm operators and by region in the FLS. DOL used the FLS data to set H-2A wages so they reflect current real-world trends in the farm labor market.

The FLS data up to 2024 data show that while there have been some documented real increases over the past three decades, they have not been unreasonably large increases, and they have occurred in a broader context where the wages of farmworkers are extremely low by any measure, even when compared with the hourly earnings of comparable non-farm workers, as well as when compared with average wages for all workers in the United States, and workers with the lowest levels of education (see Figure A).

Figure A

In 2024, the average earnings of all nonsupervisory farmworkers (i.e., combined field and livestock workers in the FLS) was $18.12 per hour. The average farmworker hourly wage in 2024 was just half (52%) of the average hourly wage for all workers in the United States in 2024, which was $34.27 per hour.{{9}} The average farmworker hourly wage in Colorado was less than the national farmworker average, at just $17.84 per hour.

The average hourly wage for production and nonsupervisory non-farm workers—the most appropriate cohort of nonagricultural workers to compare with farmworkers—was $27.56, according to the Current Employment Statistics from the Bureau of Labor Statistics (BLS). In other words, farmworkers earning the national average earned just under 60% of what production and nonsupervisory workers outside of agriculture earned, or three-fifths. In 2024, the farmworker wage gap remained substantial and virtually unchanged from the previous three years. USDA’s ERS shows that between 1990 and 2023, the gap slowly narrowed from 50% to 60% and has described the wage gap between farmworker and nonfarm worker wages as “still substantial, but it is slowly shrinking.”{{10}} 

Farmworkers have very low levels of educational attainment and their wages are comparable to workers in other industries with similar educational attainment. According to the NAWS, 27% completed the 10th, 11th, or 12th grade, and only 16% completed some education beyond high school.{{11}} Farmworkers earn the same or less than the two groups of non-farm workers with the lowest levels of education in the United States: Farmworkers earned 10 cents an hour more than the average wage earned by workers without a high school diploma ($18.02), but earned $5.61 less per hour than the average wage earned by workers with only a high school diploma ($23.73). Farmworkers in Colorado earned less than workers without a high school diploma ($17.84 vs $18.02).

Farmworkers in Colorado earn very low wages—half the average wage earned by all workers in Colorado

There are roughly 30,000 farmworkers in Colorado, including 4,400 migrant workers recruited by Colorado employers through the H-2A visa program. As noted above, in 2024, at the state level in Colorado, USDA’s FLS shows that the average hourly wage for farmworkers in Colorado (the combined average wage for field and livestock workers) was $17.84. Figure A also shows that the average wage for all workers in Colorado in 2024 was $33.63, according to the Occupational Employment and Wage Statistics (OEWS) of the Bureau of Labor Statistics.{{12}} In other words, farmworkers just earned 53%, roughly half, of the average wage that all Colorado workers earned.{{13}} And as noted above, most farmworkers are not employed year-round. Despite these extremely low wages, farmworkers in Colorado work in some of the most difficult and dangerous conditions while providing an essential function for the economy and state. Thus they deserve more protections under the overtime law, not fewer.

Industry claims about the increases in farmworker wages ignore the fact that wage growth over the past 20 years has been almost identical to wage growth for other low wage workers

The value and the rate of increase of the Adverse Effect Wage Rage (AEWR) for H-2A farmworkers has become a hot-button issue and many claims about its impact have been made over the years by representatives of industry. These are relevant to examine because the AEWR wages up until 2025 represented the wages that farm operators reported they were paying to their farmworkers in response to the USDA’s Farm Labor Survey. Thus, they represent the best data available on average farm wages at the national and regional level.

Many of the claims about wage growth for farmworkers made by industry advocates and even the U.S. Department of Labor (DOL) about year-to-year increases often do not adjust for inflation, which overstates the actual increase in terms of its dollar value. This is a basic mistake that misleads—and it misleads particularly during times of relatively rapid inflation, like the post-pandemic period. DOL echoes these misleading claims from industry advocates and makes their own false claim in the preamble to the October 2025 AEWR Interim Final Rule, making the year-over-year increases in farmworker wages seem greater than they truly are. DOL notes that the national average AEWR—i.e., the average combined field and livestock worker wage reported by farm operators nationwide—has more than doubled in nominal terms over 20 years from $8.56 in 2005 to $17.74 in 2025.{{14}} But DOL’s own CPI Inflation Calculator adjusts the value of $8.56 in September 2005 to $13.99 in September 2025, resulting in a real increase of just over one-quarter over two decades, at 26.8%, which over that period averages out to just 1.2% per year.

If we examine the same period for other low-wage workers in nominal terms, we also see that wage growth for farmworkers as represented by the AEWR, is in line with—nearly identical to—nominal wage growth for other low wage workers in the United States. Figure B below shows annualized wage growth for workers paid at the 20^th percentile wage, as well as the median wage for workers with less than a high school education—both of which are good measures for typical low-wage workers. Both saw annual nominal wage growth that was at 3.5% between 2005-2025, the period that DOL identifies. Farmworkers earning the national average farmworker wage—over that same period saw annualized wage growth of 3.7%, nearly identical to other typical low-wage workers. Thus, DOL’s main example in its H-2A wage regulation of runaway wage growth for farmworkers does not hold water.

Figure B

Real wage growth for farmworkers in Colorado has averaged only 1.5% per year between 2010 and 2024

While Figure B looked at nominal wage growth over the past 20 years, EPI has previously calculated the total real wage growth for farmworkers (i.e., after adjusting for inflation) in every state between 2010 and 2024.{{15}} We found that in Colorado, the average farmworker wage in 2010 was $14.51 (adjusted to 2024 dollars), growing to $17.84 fifteen years later in 2024. This amounts to a total increase of $3.33 over 15 years (in 2024 dollars), or 22.9%. Farmworkers in Colorado averaged a real wage increase of 1.5% per year over the 15-year period.

The number of Colorado farms has increased significantly over the past 15 years, suggesting a successful agricultural industry in the state

One common argument from farm operators is that if the wages of farmworkers are too high, those high wages will put them out of business. But according to the BLS’s Quarterly Census of Employment and Wages (QCEW), the number of agricultural establishments in Colorado has increased significantly over the past 15 years. QCEW data show that the number of agricultural establishments in Colorado averaged 1,412 between 2010 and 2012. By 2024, the number of agricultural establishments had increased to 1,812, an increase of 28.3%. The 2022-2024 average number of agricultural establishments was 1,856.{{16}}

Agribusiness representatives may claim that agricultural establishments in Colorado will be forced to close or will decide to move their operations to other U.S. states because of higher labor costs associated with farmworkers being entitled to overtime pay, but the reality is that the number of agricultural establishments has been increasing steadily, even as farmworker wages have risen modestly, suggesting that both farm owners and farmworkers can mutually benefit from a growing industry.

Conclusion: The Colorado legislature should not further degrade standards on farms by expanding the 56-hour overtime threshold—and should instead provide farmworkers with equal rights in the workplace by providing them overtime after 40 hours

The annual average real wage growth of 1.5% per year over 15 years represents moderate wage growth for farmworkers and suggests a relatively tight labor market for farmworkers. However, it represents little improvement in job quality for workers that have been exempted from key labor laws and wage and hour standards, who frequently toil for long hours in difficult conditions without any pay premium, and who consequently still earn only 50% to 60% of the wage earned by comparable nonsupervisory workers outside of agriculture (see Figure A and discussion above). It would take many more years of comparatively faster wage growth for farmworkers to begin to approach even three-fourths of what nonsupervisory workers earn outside of agriculture.

Further degrading standards for some of the lowest-paid and most vulnerable workers in the U.S. labor market will not improve productivity or benefit the state’s economy; it will do the opposite, taking money out the pockets of workers who live paycheck to paycheck and spend those earnings on necessary goods and services. All while making a minimal impact on the overall share of farm income that farm operators spend on workers’ wages.

Instead of passing SB 26-121, the state legislature should set a reasonable minimum standard for the wages paid to farmworkers, and that standard should be no different than the standard set for most other workers in Colorado, which is a 40-hour overtime threshold.

Endnotes 

{{1.}} Economic Research Service, “Labor Cost Share of Total Gross Revenues,” in “Farm Labor,” U.S. Department of Agriculture, Updated November 18, 2025.

{{2.}} See Department of Industrial Relations, “Overtime for Agricultural Workers,” State of California, last updated October 2023.

{{3.}} See Quarterly Census of Employment and Wages, Bureau of Labor Statistics, Series Id: ENU5100020511, Series Title: Number of Establishments in Private NAICS 11 Agriculture, forestry, fishing and hunting, for all establishment sizes in California – Statewide; Owner: Private, for 2010-24.

{{4.}} As counted by the latest Census of Agriculture from the U.S. Department of Agriculture, 2022.

{{5.}} See Daniel Costa and Ben Zipperer, “Trump’s new H-2A wage rule will radically cut the wages of all farmworkers: New estimates show farmworkers stand to lose $4.4 to $5.4 billion annually under DOL’s updated Adverse Effect Wage Rate,” Working Economics blog (Economic Policy Institute), November 26, 2025.

{{6.}} Wenson Fung, Kimberly Prado, Amanda Gold, Andrew Padovani, Daniel Carroll, and Emily Finchum-Mason, Findings from the National Agricultural Workers Survey (NAWS) 2021–2022: A Demographic and Employment Profile of United States Crop Workers, Research Report no. 17, JBS International for the Employment and Training Administration, U.S. Department of Labor. September 2023.

{{7.}} See National Agricultural Statistics Service, “Agricultural (Farm) Labor,” for more background and to access Farm Labor Reports, U.S. Department of Agriculture.

{{8.}} Federal Policy Watch, “USDA ends the Agricultural (Farm) Labor Survey, the U.S.’s only survey of agricultural employers,” Economic Policy Institute, September 3, 2025.

{{9.}} Economic Policy Institute, State of Working America Data Library, “Hourly wage, average – Average real hourly wage (2024$),” 2025.

{{10.}} Economic Research Service, “Wages of Hired Farmworkers” in “Farm Labor,” U.S. Department of Agriculture, Updated November 18, 2025.

{{11.}} Wenson Fung, Kimberly Prado, Amanda Gold, Andrew Padovani, Daniel Carroll, and Emily Finchum-Mason, Findings from the National Agricultural Workers Survey (NAWS) 2021–2022: A Demographic and Employment Profile of United States Crop Workers, Research Report no. 17, JBS International for the Employment and Training Administration, U.S. Department of Labor. September 2023.

{{12.}} https://data.bls.gov/oes/#/area/0800000

{{13.}} A note about the data: The wage cited is for Colorado farmworkers in USDA’s FLS represents the wage reported for the Mountain II region, which surveys farm operators in Colorado, Nevada, Utah. USDA’s FLS conducts wage surveys by multistate region, except for California which USDA surveys as its own individual region.

{{14.}} Employment and Training Administration, Adverse Effect Wage Rate Methodology for the Temporary Employment of H-2A Nonimmigrants in Non-Range Occupations in the United States, U.S. Department of Labor, Interim Final Rule, 90 Fed. Reg. 47914, at 47923 (October 2, 2025).

{{15.}} See Table 1 in Daniel Costa, EPI comment on DOL’s 2025 Interim Final Rule modifying the AEWR methodology for H-2A farmworkers, Economic Policy Institute, December 1, 2025.

{{16.}} See Quarterly Census of Employment and Wages, Bureau of Labor Statistics, Series Id: ENU5100020511, Series Title: Number of Establishments in Private NAICS 11 Agriculture, forestry, fishing and hunting, for all establishment sizes in Colorado – Statewide; Owner: Private, for 2010-24.

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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February 26, 2026

Good afternoon, Chair Ricks, Vice Chair Camacho, and members of the committee,

My name is Nina Mast, and I’m a policy and economic analyst at the Economic Policy Institute (EPI). EPI is a nonprofit, nonpartisan think tank founded in 1986 to research the economic status of working America and propose public policies that protect and improve conditions for low- and middle-wage workers.

I’m here today to testify in support of HB 1054, a bill to strengthen Colorado workers’ right to a safe workplace. HB 1054 represents an opportunity for Colorado to continue showing leadership in efforts to protect all workers—both adults and minors—from preventable workplace injuries or fatalities.

As a national expert on state labor standards—including state standards to prevent young workers from exposure to hazardous occupations—I have had the opportunity to work on many state-level efforts to improve state workplace laws—including in Colorado. I regularly encourage policymakers to look to Colorado as a leader in making crucial and innovative updates to its standards both through legislation and administrative rulemaking. HB 1054 is an important next step for Colorado to take in this direction at a time when long-standing federal workplace health and safety standards are at risk.

Since the 1970 passage of the federal Occupational Safety and Health Act first established basic nationwide workplace health and safety standards, OSHA has saved tens of thousands of lives and prevented millions of injuries. Unfortunately, federal OSHA today faces numerous threats including diminished enforcement capacity, efforts to block important and long-overdue new worker protection standards, and—notably—efforts to weaken the statute’s general duty clause, which ensures foundational safety protections to all workers, regardless of the occupation or industry they work in. The Trump administration has proposed carving entire industries out of coverage under the “general duty” clause. This disastrous proposal could leave many workers without any federally guaranteed right to protection from known and preventable workplace hazards.

Given the inadequacies of current federal OSHA enforcement and the risk that existing minimum federal standards could soon be eroded further, it’s crucial for states to step in to protect their workers.

HB 1054 not only enshrines the long-standing intention of the general duty clause into state law, but it also goes further to ensure stronger protections from workplace illnesses and injuries for Colorado workers today. Specifically, the bill creates a general duty of employers to provide “reasonable and adequate” protections for all workers and comply with all standards adopted through administrative rulemaking. The bill also empowers the state attorney general and the Colorado Department of Labor and Employment (CDLE) to refer cases for investigation and recover penalties to be used for enforcement. And—importantly—it provides labor organizations and individuals harmed on the job with the option to file civil actions and pursue statutory damages in cases in which employers violate legal obligations to provide a safe workplace. These provisions will strengthen enforcement of the law, encourage reporting of unsafe working conditions by workers who report abuse at great personal risk, and more meaningfully deter violations.

As a national organization that convenes a network of state research and policy organizations, we have been closely tracking the implications of federal actions for workers at the state level. In the past year, OSHA has faced unprecedented threats to its enforcement capabilities, and aggressive immigration enforcement will make workers even less likely to feel safe reporting unsafe conditions at work. Because of these threats, state lawmakers have an opportunity and responsibility to resist the erosion of hard-won worker protections and take up the mantle of advancing workers’ right to a safe workplace. The sponsors of this bill have shown that they take this commitment seriously, and we urge all members of this committee and the Colorado General Assembly to do the same by supporting the passage of HB 1054.

Thank you.

Colorado Department of Labor and Employment
707 17th Street, Suite 150
Denver, CO 80202-3660

RE: Colorado Youth Employment Standards Rules, 7 CCR 1103-20

Dear members of the Colorado Department of Labor and Employment,

The Economic Policy Institute (EPI) submits this comment in response to the Colorado Department of Labor and Employment (CDLE) proposed rule (7 CCR 1103-20) regarding the Colorado Youth Employment Opportunity Act (CYEOA) C.R.S. § 8-12-101, et seq.

EPI is a nonprofit, nonpartisan think tank working for nearly 40 years to counter rising inequality; low wages and weak benefits for working people; slower economic growth; unacceptable employment conditions; and a widening racial wage gap. We intentionally center low- and middle-income working families in economic policy discussions at the federal, state, and local levels as we fight for a world where every worker has access to a good job with fair pay, affordable health care, retirement security, and a union.

EPI is a nationally recognized expert on U.S. federal and state child labor standards and has been closely following state legislative and administrative rulemaking efforts regarding child labor for the past three years. While many states have, unfortunately, sought to weaken child labor protections, other states—including Colorado—have recognized that weak, outdated child labor laws have contributed to the ongoing U.S. child labor crisis, and have responded by strengthening and modernizing state protections for minors who work.

We applaud CDLE’s use of its rulemaking authority to strengthen protections from hazardous work for minors and appreciate the opportunity to submit recommendations to CDLE’s proposed rule on this topic. EPI supports the proposed rule and recommends additional amendments to further clarify that minors are not employed in occupations currently prohibited by federal regulations and to strengthen guidance for employers seeking to hire minors for hazardous work. 

We would also encourage future rulemaking on permitted hours of employment for minors. Given that state law permits employment beyond the maximum hours stipulated under federal law, we encourage the agency to consider rulemaking to align the interpretation of permitted hours under the CYEOA with federal law.

CDLE has broad authority to ensure hazardous work is in accordance with federal law

The Fair Labor Standards Act (FLSA) governs minimum federal child labor standards, including by prohibiting minors from being employed in certain hazardous occupations or using certain dangerous tools and equipment associated with an increased risk of injury or death. Under the rulemaking authority granted by the FLSA, the U.S. Department of Labor (U.S. DOL) has enumerated 17 occupations that are prohibited for all minors, as well as a longer list of prohibited occupations for minors under 16 and a list of permitted occupations for minors under 16 (if an occupation is not explicitly permitted, it is prohibited by default).

The federal hazardous occupation orders (HOs) should be considered the federal floor for hazardous work protections that states should aim to exceed. However, the CYEOA should be interpreted in congruence with federal requirements to resolve confusion between state and federal law. For example, C.R.S. § 8-12-108 permits minors as young as 14 to work in manufacturing, messenger service, warehousing and storage, and construction, but federal law prohibits these occupations for all minors under 18. Additionally, several federal HOs are missing from C.R.S. § 8-12-110, such as operating a motor vehicle (HO 2), forest firefighting (HO 4), and operating hoisting apparatuses (HO 7) .

Pursuant to subsection (3) of C.R.S. § 8-12-110, CDLE “shall promulgate regulations, in accordance with section 24-4-103, C.R.S., to define the occupations prohibited under this section and to prescribe what types of equipment shall be required to make an occupation nonhazardous for minors.” Given this broad authority, CDLE can define hazardous occupations as “any occupation prohibited for minors under federal law” to effectively bring the state’s hazardous occupation orders in line with federal law. Additionally, CDLE should clarify that any occupation defined as hazardous under current federal law is prohibited under state law, effectively removing from C.R.S. § 8-12-106 through C.R.S. § 8-12-110 those occupations which are currently permitted under state law (in conflict with federal law). Wherever the FLSA is cited, it should be specified that the state will recognize current (2025) federal law unless the FLSA is strengthened. If FLSA standards are weakened or eliminated, Colorado should continue to prohibit the employment of minors in occupations under the 2025 federal standards.

CDLE’s proposed rule satisfactorily addresses many of these issues and the agency’s explanation of permitted hazardous employment under the CYEOA will reduce the likelihood that minors will be employed in jobs prohibited under federal law. However, we suggest several amendments to Sections 9 and 10 of the proposed rule to strengthen and clarify this commitment. This added clarity will be helpful for employers in their efforts to comply with state and federal laws and keep minors safe on the job.

Section 9: Clarifying the applicability of 2025 federal child labor regulations

Section 9.1 states that “Minors may only be employed as permitted by C.R.S. § 8-12-106 to -109 and these Rules” and that “for occupations not specifically permitted by the CYEOA or identified in Division rules or guidance … employers may submit an exemption request.” EPI suggests that CDLE amend this language to clarify that any occupation not specifically permitted is prohibited unless the employer demonstrates otherwise via the exemption request process. This language would mirror U.S. DOL’s published guidance on permitted occupations for 14- and 15-year-olds: “what is not permitted is prohibited.”

Section 9.2.6 states that the use of power-driven lawn equipment is prohibited for minors except under certain conditions, including that the minor is trained, that the equipment’s use complies with federal OSHA standards and state rules, and that the minor does not perform maintenance or repair of the equipment. However, since federal law generally prohibits the operation of any power machinery for 14- and 15-year-olds, we suggest that CDLE amend its proposed rule to include in subpart B “The power-driven equipment and its use comply with applicable Occupational Safety and Health Administration (OSHA) standards, including 29 C.F.R. §§ 1910.242-243, and applicable Fair Labor Standards Act (FLSA) regulations, including 29 CFR §§ 570.33.”

Similarly, EPI recommends that CDLE add a similar reminder to Section 9.4 and Sections 9.5. Since federal law prohibits minors under 14 from being employed in most jobs, it bears repeating that many jobs that may be permitted under Colorado law will remain prohibited for younger minors under federal law.  

Section 10: Strengthening guidance for employers seeking to hire minors for hazardous work

EPI supports the appropriate use of work-based learning programs that create pathways for young workers to access good quality, union jobs in the trades. However, state lawmakers and agencies must take great caution to ensure the safety and well-being of minors who participate in these programs. Under federal law, there are narrow exemptions from seven of the 17 federal HOs for student learners and apprentices enrolled in a bona fide registered apprenticeship program. However, as discussed in the National Institute for Occupational Safety and Health’s 2002 recommendations, at least four occupations pose risks to minors that cannot be sufficiently mitigated to justify continued exemptions: meatpacking, roofing, excavation, and the use of power-driven saws.

Additionally, in recent years, several states have sought to expand these exemptions for hazardous work beyond what is permitted under federal law and/or for programs not regulated by U.S. DOL. For example, Iowa enacted a law in 2023 to allow 14–15-year-olds enrolled in work-based learning programs to conduct hazardous work in industrial laundries and assembly work prohibited under federal law. In 2024, West Virginia created a new youth apprenticeship program that exempts minors from all of the state’s hazardous occupation orders (in violation of federal law) and Oklahoma created a new apprenticeship program for youth in the electrical trades that does not require approval from the state agency (electrical work is not covered under any federal HO).

It is in this context of eroding hazardous work protections for students enrolled in work-based learning programs and the creation of unregistered apprenticeship programs in occupations that are inherently dangerous that EPI recommends implementing strong guardrails for minors employed to do hazardous work though work-based learning programs and clear expectations for the employers that seek these exemptions. Specifically, EPI recommends the following changes:

• 10.1.1: Requests for exemptions should be limited to minors ages 16 and older; documentation demonstrating that the exemption is in the best interest of the child must be submitted by the employer;
• 10.1.3: This list should also include conditions for hazardous employment by registered apprentices and student learners enumerated in federal child labor standards 29 CFR 570.50 (2025);
• 10.2: Increase the age from 14 to 16; and
• 10.2.1 through 10.2.4: The employer should be required to demonstrate that hazardous employment is in the best interest of the child regardless of whether the employment is through an established, accredited program.

Definitions

“Qualifying adult”: We suggest removing this term from the definitions list because it problematically conflates the responsibilities of a parent/guardian with those of an employer. Section 9.2.2 can simply use the term “adult” or “parent/guardian,” but Sections 9.4.2 and 9.5 should specify that in the limited circumstances where this approach is warranted, the employer must be close by or reachable by phone. Otherwise, the regulation effectively burdens parents with the responsibility of enforcing the state’s child labor standards.

“Include”: This definition is not used consistently throughout the proposed rule and should be removed.

Conclusion

By enacting legislation to increase penalties for child labor violations and expand opportunities for justice for victims of child labor, the state of Colorado has demonstrated its commitment to strengthening labor standards for working minors. Now, the state labor agency has an opportunity to solidify that commitment through the rulemaking process. We commend CDLE for proposing a strong rule regarding hazardous work in the CYEOA and support the proposed rule. We encourage CDLE to use its full authority in the CYEOA to ensure that minors are employed in accordance with federal law and protected from workplace hazards, and that the burden of proving a job is safe and appropriate for a minor be placed on the employers that seek exemptions from these protections.

Sincerely,

Nina Mast
Policy and Economic Analyst
Economic Policy Institute

Established in the wake of the Great Depression through the Social Security Act of 1935, unemployment insurance (UI) is a critical safety net program that provides a partial replacement of wages to workers who have separated from employment. UI helps workers and their families afford their basic needs during spells of unemployment. It also helps stabilize the macroeconomy by keeping dollars flowing to local economies where layoffs and job losses could otherwise result in harmful drops in aggregate demand. UI is a forward-funded reserve, accumulating tax dollars during periods of economic stability to support workers during economic downturns.

Federal law establishes UI as federal-state partnership. Under the existing framework, the federal government sets baseline program parameters and raises revenue through Federal Unemployment Tax Act taxes to cover state administrative costs (e.g., processing claims or maintaining state unemployment trust funds), provide technical assistance, and conduct performance monitoring. States are responsible for paying worker benefits, although the federal government typically covers at least half of the cost of “extended benefits” during recessions. States have significant discretion to determine key features of their UI programs, such as eligibility criteria, benefit amounts and durations, and financing mechanisms.

What are the threats to state UI programs?

Unemployment insurance programs face mounting threats—some that are new, some from long-standing structural weaknesses that have left many state UI programs chronically underfunded and ill-prepared for economic downturns. In particular:

1. The Trump administration aims to weaponize UI systems to advance its mass deportation agenda: All workers in the U.S. with legal status (regardless of citizenship or nationality) are eligible for UI benefits, though immigrants who lack work authorization are not. Despite this distinction, in April 2025, Secretary of Labor Lori Chavez-DeRemer issued letters warning state governors against granting UI benefits to noncitizen workers, including those legally authorized to work. The letters threatened to withhold federal funds and directed states to verify the immigration status of UI applicants. Further, the U.S. Department of Labor recently proposed a rule change around UI data collection that poses risks to applicant privacy and could expand the risk of UI data being used for immigration enforcement.
2. The Trump administration’s rollback of merit staffing opens the door to UI privatization: Project 2025 calls for states to “innovate” with their UI programs by approving “non-public” organizations to administer benefits. This would dismantle long-standing merit staffing guidelines that require benefits to be administered by impartial career civil servants. Weakening merit staffing risks putting UI administration in the hands of actors who may not be impartial or accountable to the public. Although privatization of UI is explicitly prohibited by the Social Security Act, this backdoor approach erodes the public nature of UI administration. Research shows that introducing a profit motive for vital public services often results in reduced service quality, little cost savings, and less transparency, oversight, and accountability.
3. UI programs suffer from long-standing weaknesses that undermine their effectiveness as a safety net and economic stabilizer: Although unemployment insurance is a critical lifeline for unemployed workers, benefit levels replace less than 40% of wages on average, leaving many workers unable to meet their basic needs and disproportionately discouraging UI take-up among women and workers of color in low-wage jobs. Many states have also shortened benefit durations below the historical standard of 26 weeks, despite research showing such cuts reduce recipiency without improving employment rates or program solvency. At the same time, taxable wage bases and employer tax rates have eroded, starving trust funds. Most states now fail to meet federal solvency standards. Many states also rely on outmoded technology and understaffed state agencies to administer UI benefits and federal funding to modernize state UI systems was recently rescinded by the Trump administration. Finally, restrictive eligibility rules exclude large swaths of the workforce, including part-time and low-wage workers, women, Black and brown workers, misclassified workers, independent contractors, undocumented workers, and the self-employed. These weaknesses leave UI programs chronically underfunded, inaccessible to millions, and ill-equipped to protect workers or stabilize the economy during downturns.
4. Project 2025 seeks to weaken UI eligibility criteria by circumventing suitable work standards: Under federal law, workers can remain eligible for UI if they decline job offers that don’t meet a reasonable standard of suitability. Suitability definitions can vary by state but often consider factors such as health and safety conditions, wages, skills match, commuting distance, or other job characteristics when determining suitability. Some states’ suitable work requirements weaken the longer a worker is unemployed. Despite evidence that continued UI eligibility leads to better job matches and job quality, Project 2025 proposes providing states with waivers to suitable work requirements. Should waivers to this critical UI standard be adopted, workers could be disqualified from UI for turning down any job offer, no matter how unsafe, low-paid, or ill-suited to their experience. This would fundamentally weaken UI’s ability to facilitate good job matching, while putting workers in a precarious financial position following a job separation.

State lawmakers must act now to strengthen UI programs ahead of the next crisis

States lawmakers have broad authority over UI benefits, eligibility, and the financing of their states’ unemployment insurance trust fund, meaning they wield substantial power to ensure programs’ solvency and effectiveness when an economic crisis materializes. In light of the Trump administration’s anti-growth, inflationary economic policy and a softening labor market, policymakers must act with urgency to fortify UI programs.

Step I: Update state funding mechanisms to solidify trust funds and set basic minimum benefit standards

In recent decades, lawmakers in many states have sought to replenish unemployment trust funds by paring back benefits and restricting eligibility criteria. These efforts have largely failed to restore fund solvency or improve employment rates and have instead caused considerable harm to workers. State policymakers have the authority and tools to modernize their programs in ways that protect solvency without undercutting protections for workers. Policymakers should:

• Raise and index the taxable wage base to reflect the typical worker’s income: States have broad discretion in setting their taxable wage base (TWB), provided it meets or exceeds the exceptionally low federal minimum of $7,000. (As of 2025, the median state TWB is only $14,000.) States should link or index their TWBs to typical wages in their state. Currently, 18 states index their TWBs to the state’s average weekly wage, including Oregon (TWB of $54,300), Hawaii ($62,000), and Washington ($72,800). This ensures UI revenues keep pace with growth in the state economy, while creating a more equitable tax base and strengthening trust fund solvency. Adjusting taxable wage bases also allows states to generate more revenue at lower State Unemployment Tax Act (SUTA) rates. For instance, applying a 5.7% rate to a $7,000 tax base generates $400 in revenue per worker, while a much lower rate of 3.8% applied to a $21,000 tax base generates $800—twice the revenue. 
• Guarantee a minimum of 26 weeks of potential benefit duration: An extensive body of research finds that longer UI benefits do not meaningfully discourage work and any resulting increase in unemployment duration is offset by improved job matching, as workers find jobs with higher pay or that better match their skills. Prior to the Great Recession, all states offered at least 26 weeks of potential benefit duration (PBD) to eligible workers. Policymakers should ensure UI programs guarantee a minimum of 26 weeks of PBD.
• Raise benefit levels to afford workers a minimum standard of living: Low benefit levels mean low-wage workers—should they even qualify for benefits—often receive benefits that are unlivable. As a stepping stone to more ambitious and meaningful benefit level increases, lawmakers should set minimum benefit levels that working families can survive on: a benefit amount of at least 30% of the state’s average weekly wage or $300 per week (indexed to median wage growth), whichever is greater.

Step II: Improve program access and benefits to levels that make UI fulfill its core objectives

Unemployment insurance is one of the most important tools for reducing the harmful, reverberating effects of unemployment and one of the most effective programs for combatting recessions. Providing adequate benefits to unemployed workers leads to better reemployment outcomes, keeps dollars flowing in local economies, and ultimately lends itself to a more productive and dynamic economy. To this end, state policymakers should:

• Strengthen program administration and remove barriers to UI access: Applying for UI benefits is often a complex process and serves as a barrier to entry to workers who are navigating job loss. Underfunding and inadequate staffing of state and local UI administrative offices can compound these problems. Lawmakers should ensure that state agencies and UI offices have adequate resources to help applicants navigate the process and quickly process claims. In addition, the Century Foundation and Philadelphia Legal Assistance provide a comprehensive set of recommendations for state policymakers and agencies seeking to modernize UI systems and reduce barriers to access.
• Automatically extend UI benefits in difficult economic conditions to strengthen the program’s role as a macroeconomic stabilizer: When UI programs do not scale with market conditions, this deepens the damage caused by recessions. To better leverage UI’s stabilizing potential, states should utilize the optional Total Unemployment Rate (TUR)-based extended benefit program to guarantee workers can receive up to 20 weeks of extended benefits during severe economic crises. As of 2023, only 27 states and territories utilize the optional TUR-based trigger. Although optional state extended benefit programs carry some budgetary costs, they can help mitigate the long-lasting scarring effects of an economic contraction. 
• Set benefit levels that offer real protection for workers: State laws governing wage replacement and benefit maximums vary widely, but some states have adopted benefit formulas that provide much stronger protection. For instance, in 2024, Hawaii’s program provided an average weekly benefit of $653 (57% of worker wages), Washington’s average weekly benefit was $722 (51% of wages), and Massachusetts’s was $704 (48% of wages.) The National Employment Law Project’s policy brief describes optimal formulas for computing benefits.
• Establish a dependent allowance to allow parents and caregivers to fulfill their obligations: Households with children are much more likely to face food and housing insecurity when a job is lost. Dependent allowances, already enacted in 13 states, can help mitigate these harms by recognizing the added burdens that caregivers face. Policymakers should adopt similar measures and define dependents broadly to reflect the diversity of family structures and care responsibilities.
• Make short-term compensation (“work-sharing”) more appealing for employers and workers: During economic downturns, employers often resort to layoffs to reduce costs, harming workers financially and businesses in lost skilled labor. Under a short-time compensation (STC) (or “work-sharing” arrangement), firms can reduce employee hours instead eliminating jobs, while UI benefits partially offset lost wages for workers. Currently 33 states have STC programs in place, but utilization remains uneven and low relative to comparable programs in OECD nations. States can strengthen STC programs by making firms of all sizes eligible, removing experience rating penalties, allowing employers to certify reductions in hours on behalf of workers, and ensuring earnings from other jobs are not counted against workers’ STC benefits. The Washington Center for Equitable Growth provides additional recommendations for reducing administrative barriers and engaging in employer outreach and education.

Step III: Modernize unemployment insurance to reflect the needs of a 21st century economy

The unemployment insurance system, designed in the 1930s, no longer reflects the realities of today’s workforce. It excludes many gig, part-time, and irregular workers, and inherits frameworks that are rooted in racism and sexism. Lawmakers should adopt more expansive frameworks for UI eligibility and accessibility by taking action to:

• Set progressive benefit levels that truly alleviate economic hardship: Policymakers can ensure UI systems truly alleviate economic hardship and strengthen worker bargaining power, while targeting those workers most in need, by progressively structuring benefits. A smart approach would replace at least 85% of wages for the lowest earners, gradually scaling down to 50% for high earners, and 30% for very high earners.
• Increase benefits duration to ensure workers have sufficient runway and better prospects when reentering the workforce: Evidence shows that when workers have a longer benefit runway, they have better reemployment outcomes, find jobs that better match their skills, earn higher wages, and are more likely to remain on the job. States should guarantee a minimum of 30 weeks of potential regular UI benefit duration.
• Raise or remove the ceiling on the taxable wage base: Policymakers can truly address solvency concerns by dynamically increasing or eliminating caps on taxable wage bases. States should set the TWB to at least half of the Social Security taxable wage limit ($176,100 as of 2025). Several states have successfully increased their TWBs by indexing to a high proportion of the average worker’s wage. Whether by raising the cap, indexing it to wages, or relinking it to the Social Security base, modernizing the taxable wage base would strengthen trust fund solvency and create fairer contributions across employers of low- and high-wage workers.
• Reform experience rating to eliminate harmful incentives to fight legitimate UI claims: Federal law requires states to adopt rules such that employers with higher rates of separations pay higher UI taxes. This approach, known as “experience rating” encourages workforce stability and helps ensure equity among employers by charging more of those who draw more heavily against unemployment trust funds. However, these rules create the perverse incentive for employers to block legitimate claims by encouraging workers to not file, challenging claims, or structuring their workforce to minimize the number of employees eligible for UI, such as relying on part-time or contract labor. States can remove these harmful incentives by experience rating employers based on changes in the number of hours worked by their employees or the number of workers they employ. Alaska, for example, implemented a “payroll decline quotient” method which ties tax rates to changes in payroll over time instead of the number of claims made by workers. Further, since some firms are indifferent to additional layoffs because of a capped experience rating tax, states can impose penalties on firms that persistently remain at the cap.
• Expand eligibility to all workers with demonstrated attachment to the labor force: State monetary eligibility rules should be reformed to guarantee coverage for all workers who demonstrate clear labor force participation. Rather than relying solely on workers meeting specific earnings thresholds, states should also allow workers to qualify based on hours worked. Specifically, any individual who works at least 300 hours during two quarters of a base period should qualify. This means a worker who performed 15 hours of work per week for 20 weeks across two quarters would be eligible for UI. Hours from all work arrangements should be counted toward the 300-hour minimum, given that low-paid workers often hold multiple jobs across different employers. States should also extend the base period for determining eligibility to six quarters of work, to prevent low-paid, seasonal, and temporary workers from falling through the cracks. Oregon is currently the only state with a hybrid model allowing workers to qualify based on either earnings or hours.
• Reform work-search requirements to account for issues that workers commonly face: Overly onerous work-search requirements increase benefit denials while failing to save money for UI programs. States should ensure work-search requirements are not so burdensome that active jobseekers lose UI benefits before finding a new and suitable job. For instance, states should allow workers to continue receiving benefits if they have good cause for missing an appointment or work-search verification. If a worker falls short of work-search requirements, they should lose benefits only for that week, instead of being permanently removed from the program. States should also allow workers engaged in education or training programs that may boost their employment prospects to continue receiving UI benefits. Further, they should ensure continuing eligibility for workers available for part-time work, not just those seeking full-time work.
• Enact strong suitable work requirements to boost worker reentry prospects: A core function of UI is to promote stable, quality reemployment; workers should remain eligible for UI if they decline a job that is a poor match for their skills or of substandard quality. The National Employment Law Project provides recommendations that states can adopt to ensure strong suitable work criteria, including: 1) comparing the wage offered by a new job to the occupation’s prevailing wage and factoring in the worker’s expertise, training, and experience; 2) maintaining standards of suitable work that do not weaken based on the length of unemployment; and 3) reviewing offers for temporary employment under a lens of prevailing labor market conditions.
• Expand eligibility criteria to cover workers compelled to leave their jobs for valid reasons: Historically, the UI program has failed to account for many of the reasons that might compel a worker to leave their job. States should adopt stronger good-cause quits provisions that include reasons such as leaving due to unsafe conditions, caregiving responsibilities, or harassment, while exploring broader eligibility criteria that provide benefits to workers who quit.
• Extend UI eligibility to striking workers: Allow workers engaged in labor disputes to access UI benefits under the same rules as other unemployed workers. While some states impose extra waiting periods for striking workers, policymakers should adopt no or minimal additional delays.
• Establish joblessness protections for independent contractors, self-employed, and undocumented workers: To function as a true safety net UI should cover all labor force participants, including self-employed workers, independent contractors, and undocumented workers who lose work. In recent years, California, Colorado, and New York have pioneered successful initiatives for covering contractors, self-employed, and undocumented workers. States should explore options for establishing similar programs to ensure workers excluded from traditional UI have access to similar safety net protections.
• Adopt clear legal standards to combat worker misclassification: When workers are wrongfully classified as independent contractors, they lose the labor protections of W-2 employees, including UI eligibility. Misclassification imposes heavy costs on both workers and state trust funds. Policymakers can address this by adopting Pennsylvania’s model, which presumes that any worker performing services is an employee unless the employer proves that 1) the worker is free from the employer’s control or direction in performing work and 2) the worker is customarily engaged in an independently established trade or business.
• Design programs to protect workers’ privacy: While some states have expanded wage records to include details such as occupation, industry, or work hours to better evaluate job quality and improve services, UI programs should ensure workers can apply for benefits without risking retaliation or exposure of sensitive personal data. The Century Foundation and Immigration Research Initiative recommend limiting data collection to what is necessary, prohibiting disclosure for nonprogram purposes, and requiring data safeguards, while allowing applicants to self-attest wherever possible. To ensure accountability, violations of privacy rules should carry clear penalties. This year, Maryland lawmakers introduced legislation to protect state databases from unauthorized sharing and immigration inquiries, offering model language for policymakers seeking to protect state data more broadly.

Additional recommended resources

• National Employment Law Project (NELP)’s State Unemployment Insurance Policy Hub;
• Reforming Unemployment Insurance: Stabilizing a System in Crisis and Laying the Foundation for Equity—a joint report of the Center for American Progress, Center for Popular Democracy, Economic Policy Institute, Groundwork Collaborative, National Employment Law Project, National Women’s Law Center, and Washington Center for Equitable Growth;
• The Century Foundation’s Unemployment Insurance Data Dashboard. 

Editor’s note: This piece was revised on October 8, 2025, to add an “Additional recommended resources” section and clarify the need to increase UI funding both to strengthen benefits and ensure effective UI program administration.

The overtime provisions of the Fair Labor Standards Act (FLSA) provide protections to most hourly workers and many low-salaried workers, guaranteeing time-and-a-half pay for hours worked in excess of 40 a week. FLSA overtime rules apply to all private businesses with annual revenue of at least $500,000, as well as hospitals, care centers, schools, and public agencies. Because federal law otherwise sets no limits on the hours employers can require people to work (and no requirements for rest breaks or days off), overtime pay is an especially important policy to disincentivize overwork and encourage employers to share work across more employees, bolstering hiring.

What are the threats to federal overtime protections?

Current threats to overtime pay include:

• Excluding workers from overtime by lowering the salary threshold for automatic eligibility: The first Trump administration took action to lower the salary threshold at which workers become automatically eligible for overtime pay when they work more than 40 hours in a week, denying eligibility to millions of low-salaried workers. It is widely anticipated that the second Trump administration will likewise block a new proposed rule to raise the salary threshold, again denying coverage to millions of workers who earn between $35,568 and $58,656 (likely by refusing to defend the rule against ongoing court challenges from business groups).
• Stripping overtime coverage from direct care workers: The Trump administration has proposed rule changes that would reverse a 2013 regulation expanding overtime coverage to include “direct care” workers, such as home health aides and certified nursing assistants, employed by agencies.
• Allowing employers to deny overtime pay: Proposals laid out in Project 2025 recommend altering the FLSA to allow employers broad new discretion to deny workers overtime pay by altering calculations of what counts as a workweek, substituting time off in place of overtime pay, and/or deeming remote employees ineligible for overtime pay.
• Increasing likelihood of underpayment or nonpayment of overtime: Failure to pay overtime is one of the most common forms of wage theft, and diminished U.S. Department of Labor (DOL) capacity to enforce wage and hour laws will exacerbate this problem.

How can states maintain and strengthen overtime protections?

States have legal authority to establish their own overtime standards so long as they are at least as protective as those in the FLSA; federal overtime laws set a floor above which states can adopt and enforce their own stronger standards. Given the very real risk that aspects of FLSA overtime protections could be eliminated (or will go unenforced), it is important for states to at least lock in existing FLSA overtime protections. Additionally, states should seek to go beyond the current floor, as some FLSA provisions—such as those exempting certain categories of workers from overtime—are long overdue for an update.

Step I: Update state statutes to lock in current federal protections

Because for decades most states have deferred to the FLSA’s overtime standard and relied at least in part on federal enforcement of overtime laws, existing overtime language in state statutes is often outdated, incomplete, or inadequate. For example:

• Minnesota state law only requires overtime after 48 hours of work in a week; in Kansas it is 46. These laws are of no practical import right now, because the FLSA overrules them, but in the absence of FLSA protections, workers in these states would have to work more hours to qualify for overtime.
• In several states—including Iowa, Oklahoma, Tennessee, and others—there is no state statutory right to overtime. At present, workers with unpaid overtime claims in these states can only go to the federal government for redress, meaning that if DOL lacks adequate enforcement capacity, workers’ recourse may become limited. Moreover, while the FLSA currently covers workers in all states, if FLSA overtime protections disappear, workers would have no right to overtime pay at all in these and other states with no overtime language in state code.
• Some states, like Hawaii and Michigan, do require overtime pay after 40 hours in a workweek but currently exclude employment that is subject to the FLSA from state coverage. States with such exclusions should remove them to ensure consistent state coverage and enforcement jurisdiction, rather than expecting some workers to rely solely on tenuous federal overtime standards and enforcement.

Many states, such as New Jersey, New Mexico, and Pennsylvania, already mirror the basic overtime provisions of the FLSA, guaranteeing overtime pay after 40 hours in a workweek. Lawmakers in other states should act quickly to ensure their state codes at a minimum follow suit. There is no harm in codifying overtime protections in state law even if federal standards don’t change, whereas delaying updates to state law puts workers at risk of real harm if federal protections are diminished or left unenforced.

One legislative model for states to consider is the 2025 “trigger law” enacted in Illinois that directs state agencies to ensure all state wage and hour standards remain at least as protective as existing federal wage and hour standards in the event that federal standards are weakened or eliminated. 

State overtime rules, if they exist, are typically part of state labor and employment or wage and hour statutes. Policymakers and advocates should review their state’s laws to assess whether overtime language codifies at least the same level of protection currently provided under the FLSA and to ensure that the state has the power to enforce its own overtime laws without relying on the federal government.

Step II: Close critical gaps in overtime coverage

While the FLSA sets an important floor for overtime pay, it is an 80-year-old statute with notable gaps in coverage that state policymakers should try to close. Priority steps states can take to update overtime coverage include:

1. Eliminate occupational exemptions: Agricultural workers are not covered by the FLSA, a racist holdover from when the act was initially passed in 1938. And while some domestic service workers such as nannies and house cleaners were covered in 1974, certain home care workers providing care for seniors and persons with disabilities remain excluded. A 2013 Obama-era rule that extended coverage to many home care workers is at risk of being rolled back by the Trump DOL. Other exceptions apply to smaller categories of workers. States have it in their power to eliminate these exemptions. For example, several states—including California, Washington, and Colorado—already cover agricultural workers under state minimum wage and overtime laws. And some states like California have already taken action in 2025 to ensure that state law will guarantee home care workers overtime pay in response to proposals to remove existing federal protections. 
2. Raise and automatically update the salary threshold for exemption of workers in executive, administrative, and professional (EAP) jobs: Currently, workers in EAP roles are exempt from FLSA overtime requirements if they earn more than $684 per week. The Biden administration issued a rule to update that threshold to $844 per week in 2024, $1,128 per week in 2025, and to automatically adjust for inflation thereafter. This rule was blocked by the courts and there is every expectation that the Trump administration will not defend the new rule. States can move to lock in the new threshold and assure regular future updates. Six states—Alaska, California, Colorado, Maine, New York, and Washington—already have an EAP salary threshold above the federal level. For example, Washington will by 2028 remove the exemption for any employee making the equivalent of 2.5 times the state minimum wage or less. Because the state minimum wage is indexed to inflation, the state’s salary threshold will continue to rise with the state minimum wage.

Step III: Modernize overtime policies to fit today’s economy, improve safety and productivity, and promote work-life balance

In addition to codifying FLSA overtime rules and closing coverage gaps, there are many steps states can take to serve priority policy goals like preventing overwork, stabilizing work schedules, and increasing work-life balance. Indeed, overtime pay was incorporated into the 1938 FLSA as a compromise, following decades of international worker struggles for the eight-hour day and during a period of intense debate over whether public policy should place some limits on the often near-absolute control many employers exerted over workers’ time. These are questions worth revisiting in the context of state policymaking today, when overtime pay alone has failed to curb excessive use of forced overtime or scheduling practices that in some industries include dangerously long shifts or months of consecutive shifts with no days off, both of which are closely correlated with declining productivity and adverse health and safety impacts.

1. Add overtime pay to discourage excessively long shifts, encourage periodic days off, and promote fair scheduling. Many state laws include useful examples of overtime policies targeted at discouraging excessive consecutive hours of work or days of work without time off:
   • California mandates that workers receive double time (not just time-and-a-half) after 12 hours of work in a day.
   • In Alaska, overtime pay applies to all eligible employees working more than eight hours in a day. Other states have more limited expansions; for example, Oregon requires manufacturing employers to begin paying overtime after 10 straight hours.
   • A number of states, including Alaska, Florida, Nevada, and Oregon, make some employees eligible for overtime pay after a certain shift length, regardless of the number of hours worked in the week.
   • Kentucky requires overtime pay for all work done on a seventh straight day of work. California requires overtime pay for all work done beyond eight hours on a seventh straight day of work.
   • Fair scheduling laws, which Oregon and a number of cities have adopted, similarly require employers to provide advance notice of schedules and extra pay for schedule changes. Some laws also crack down on “clopenings”—the practice of requiring an employee to work late in the evening and start again early the next morning—by requiring extra pay for shifts within 12 hours of each other.
2. Guarantee rights to refuse excessive forced overtime: States could also ensure that hourly workers have the right to decline excessive overtime hours without fear of retaliation. For example, Maine proposed legislation to protect overworked paper industry workers—who were sometimes forced to work 24-hour shifts—guaranteeing a right to refuse more than two hours of overtime in a day, and requiring seven days advance notice of schedules.
3. Expand overtime laws to incentivize transitions to shorter work weeks: Well before passage of the FLSA and up to the present day, workers and advocates have proposed that productivity gains should result in shorter work hours (with no loss of pay). Numerous versions of proposals to move to a four-day or 32-hour standard work week have been introduced in several states, including pilot and study bills. State expansions of overtime pay to hours worked beyond 32 in a week (or other numbers less than 40) could help incentivize shifts toward shorter work weeks.
4. Look to tested overtime language in collective bargaining agreements for policy models: Collective bargaining agreements negotiated between unions and employers often contain more expansive overtime and scheduling provisions that can serve as models for more ambitious policy ideas. For example, language in such agreements may list additional circumstances when overtime or other forms of premium pay are required for work on weekends, holidays, on-call hours, or following scheduling changes. These agreements may also set out processes for workers to accept or decline additional work hours or new shift assignments, timelines for employers to provide notice of work schedules, fair procedures for assigning overtime, and more.

Additional recommended resources 

• State minimum wage [and overtime] laws (U.S. Department of Labor) 

• Overtime laws by state (Bloomberg Law) 

• Explaining the Department of Labor’s new overtime rule that will benefit 4.3 million workers (Economic Policy Institute) 
• Home care worker rights in the states after the federal companionship rules change-2013 (National Employment Law Project; note that this resource is an excellent tool for identifying relevant state code sections, but may not reflect more recent changes to state laws) 

Editor’s note: This piece was revised on October 24, 2025, to add an “Additional recommended resources” section and include updates on federal and state policy developments that took place after initial publication.