DeWine’s decision reflects conclusions backed up by decades of research and public policy experience. As his veto message emphasizes, existing work hour guidelines—providing young teens (under 16) opportunities to gain work experience “after school up to 7 p.m.”—have been “in place, across this country, for many years” and have “served us well” and “effectively balanced the importance of 14- and 15-year-old children learning to work, with the importance of them having time to study.”

If enacted, the Ohio bill in question (SB 50) would have allowed longer, later work hours—up to 9 p.m. on school nights for children as young as 14—that can interfere with young teens’ education, sleep, health, and development. Studies have consistently shown that intensive work at a young age is associated with poor academic outcomes; longer hours raise the risk of work-related illness and injury; and work later into the night exacerbates sleep deprivation that in turn can interfere with teens’ education and well-being. Allowing employers to schedule young teens to work until 9 p.m. also increases the likelihood of nighttime driving for new drivers (minors can be permitted to drive at age 15.5 in Ohio), an additional risk factor for accidents. Motor vehicle crashes are already the leading cause of death for teens and young adults, who are three times more likely to die in a car accident than adults over 20. For all these reasons, federal law limits the maximum number of working hours for young teens to three hours per night or 18 hours a week and prohibits work past 7 p.m. on school days.

At a moment when the U.S. faces a reemerging crisis of rising child labor violations and when Ohio is taking steps to decrease teen driving fatalities, DeWine’s veto is a sensible, informed response to harmful legislation. It also marks a hopeful next stage in ongoing state-level struggles to maintain and strengthen essential child labor protections in the face of a coordinated, industry-backed campaign to weaken child labor standards—first at the state level, and eventually nationwide.

Veto spares Ohio employers from confusing conflict between state and federal law, while threats to erode federal child labor standards still loom

Governor DeWine also appears to have taken to heart and, wisely, acted on lessons his fellow policymakers learned the hard way in other states where similar legislation has been proposed or enacted in recent years.

Ohio’s SB 50 would have allowed employers to schedule 14–15-year-olds to work until 9 p.m. on school days, two hours later than allowed under the federal Fair Labor Standards Act (FLSA). Because states can legislate above FLSA standards but not below, the proposed new state standards would have conflicted directly with federal law, sowing confusion for parents, teens, and employers, and putting employers at risk of being charged with federal child labor violations if they chose to follow weaker state guidelines.

This exact scenario played out recently in Iowa when, despite strong warnings from labor advocates and U.S. Department of Labor (DOL) officials, Governor Kim Reynolds signed a 2023 bill that included multiple provisions conflicting with federal child labor law. Once the Iowa bill went into effect, information from state agencies and employer groups (including the Iowa Restaurant Association) sowed confusion by suggesting that employers could now abide by weaker new state standards. Then, after a number of restaurants faced federal child labor investigations and fines for violating the FLSA in 2024, Governor Reynolds publicly defended the illegal employer practices—in part with (unsubstantiated) claims that the businesses were being unfairly targeted by the DOL, and by calling on the federal government to stop enforcing existing child labor laws and instead “look to Iowa as an example” of how to handle child labor.

A concurrent resolution accompanying the Ohio bill, which was adopted by both chambers, similarly called on Congress to weaken the FLSA by adopting Ohio’s proposal for longer school-night hours for young teens as the new federal standard. By repeatedly proposing—and in some cases implementing—standards that conflict with federal law, legislators in states like Iowa and Ohio have attempted to chip away at the already fragile federal floor for workplace protections. Federal child labor standards are also under direct threat. The Project 2025 policy agenda closely followed by the Trump administration recommends lifting prohibitions on hazardous child labor and allowing states to opt out of the FLSA entirely.

In light of continuing threats, states have a critical role to play in defending and strengthening child labor standards

Ohio’s SB 50 and its 2023 predecessor were both sponsored by the same state senator with the support of industry groups whose members would benefit from weaker child labor laws—the Ohio Restaurant and Hospitality Alliance, National Federation of Independent Business in Ohio, and the Pickerington Chamber of Commerce—as well as Americans for Prosperity, a right-wing, billionaire-backed dark money group that has coordinated state-by-state legislative campaigns to weaken child labor laws across the country, often alongside the right-wing think tank Foundation for Government Accountability (FGA).

Governor DeWine now joins a growing number of governors and state legislators who have stood up in opposition to these attacks. For example, Wisconsin Governor Tony Evers vetoed an FGA-sponsored bill last year that would have eliminated the state’s effective, commonsense youth work permit system. Some have even gone further to propose or support legislation that strengthens state child labor standards, with lawmakers in more than a dozen states proposing legislation or administrative rules to protect minors from hazardous or exploitative work, deter child labor violations, and increase accountability for law-breaking employers.

Governor DeWine, after hearing the voices of numerous parents, educators, health care, and driving safety experts, concluded that a veto of SB 50 was “in the public interest.” Given evidence that industry campaigns to weaken child labor laws are continuing (and the very real risk that aspects of federal child labor protections could face similar threats from the same forces), more states should pursue critical opportunities and responsibilities in 2026 to—at the very least—defend the long-standing, minimal floor set by the FLSA and, wherever possible, to strengthen state standards that ensure young teens who work can do so without damaging their health or education.

The Fair Labor Standards Act (FLSA)—which establishes wage and hour standards that apply to most workers at private businesses with annual revenue of at least $500,000, as well as hospitals, care centers, schools, and public agencies—requires that covered employers keep employee time and pay records. Beyond this minimal recordkeeping requirement, other important questions about wage payment are left up to states. The FLSA does not specify, for example, how and whether employers make time and pay records available to employees; when or how often employees must be paid; the manner in which pay can be issued (e.g., cash, check, direct deposit, electronic pay card, etc.); whether and under what circumstances employers can take deductions from workers’ pay; and how and by when employees must be paid following separation from employment.

What are the threats to federal wage payment protections?

Current threats to wage payment protections include:

• Diminished federal Department of Labor (DOL) enforcement capacity: Wage theft is an epidemic across the country, and diminished DOL capacity to enforce federal wage and hour laws will exacerbate this problem. As of May 2025, the number of federal DOL Wage and Hour Division investigators is at an all-time low.
• Attempts to close the Consumer Financial Protection Bureau (CFPB): The 2006 Electronic Funds Transfer Act included important protections for workers who encounter fraud or abuse when attempting to access wages issued via electronic pay cards (including disclosure requirements, error resolution rights, and rights to other options for receiving pay). Trump administration efforts to eliminate CFPB may leave the federal government with little or no ability to enforce these protections.

How can states maintain and strengthen wage payment protections?

States have legal authority to establish their own wage payment standards since most issues related to wage payment are not covered by the FLSA.

Step I: Lock in and enhance federal recordkeeping requirements

At a bare minimum, all states should ensure that state code requires employers to keep detailed employee time and pay records.

• For example, California requires “payroll records showing the hours worked daily” by employees, and California wage orders contain more specific recordkeeping provisions “showing when the employee begins and ends each work period” as well as meal periods and split shift intervals (CA Code Regs Title 8, Ch. 11010, Sec. 7).

Step II: Ensure state code requires timely and accurate payment of wages for all workers

1. Require pay stubs (written wage statements) with each paycheck: Most states require employers to provide workers with a print or electronic pay stub at each payday. Pay stub requirements vary widely by state, and should at a minimum guarantee that workers receive critical information such as the rate of pay, hours worked, gross and net wages, and itemized accounting of any withholdings or deductions. The six states (Alabama, Arkansas, Louisiana, Mississippi, South Dakota, and Tennessee) that still lack a pay stub requirement should adopt one, as Ohio did recently.
2. Ensure timely pay on established paydays: State codes vary widely on the question of how frequently employers are required to pay workers and a few states lack any standard to ensure workers are paid at timely, predictable intervals. As a minimum standard, states should ensure employers are required to issue paychecks at least biweekly or twice per month on a regularly scheduled payday.
3. Regulate forms of payment to prevent wage theft: The proliferation of third-party vendors contracting with employers for payroll services that include use of electronic pay cards or debit cards has increased the risk that workers are charged fees for accessing their pay or are unable to access part or all of their wages. Eleven states already require that employers provide employees the option to receive payment of wages by check and many others set additional guardrails for the use of pay cards. For example, in Connecticut and Illinois employers can only use pay cards if they first obtain employee consent; explicitly offer direct deposit and paper check/cash as alternatives; provide clear written notice disclosing fees and terms of pay cards; and allow employees to revoke pay card authorization and switch to another method of payment at any time. Connecticut also requires that pay cards must allow at least three free withdrawals per pay period without fees.
4. Prevent unauthorized deductions from paychecks: The FLSA minimally bars employers from making deductions that bring a worker’s hourly pay below the federal minimum wage, with exceptions for the “reasonable cost” of items provided to benefit the employee, such as food or lodging. States should at a minimum prohibit employers from taking deductions from workers’ pay without clear written notice and employee authorization. For example, New York state code and accompanying regulations require employee authorization of payroll deductions and specify types of deductions considered legal or illegal.
5. Mandate prompt payment of final paychecks: To prevent the withholding of final paychecks after separation from employment (a common form of wage theft) many states set a deadline by which an employer must issue a worker’s final pay. For example, New Hampshire requires employers to issue final paychecks within three days to workers who are terminated, and no later than the next regular payday if a worker resigns. In Nevada, workers must receive a final paycheck “immediately” if they are terminated, or within a week if they resign or quit. In West Virginia, workers must receive a final paycheck on or before the next regular payday.

Step III: Strengthen wage payment accountability and enforcement

1. Require written notice at time of hire: More states should follow the lead of Minnesota and others by requiring employers to provide written notice of terms of employment at time of hire. This type of notice includes very basic information about employment terms but can be a critical tool for workers and enforcement agencies in the event that wage commitments are not met. Such notices should at a minimum specify the employer(s) name(s) and contact information; the work location, the nature of the work, and expected period of employment; the wage rate including when overtime or premium pay will apply; and benefits to be provided and at what cost (with information provided in a language understood by workers).
2. Strengthen enforcement: States have a host of opportunities to strengthen enforcement of wage payment laws, including:
   • Updating penalty frameworks to ensure fines and damages are adequate to serve as deterrents;
   • Allowing workers to pursue a private right of action (in addition to agency remedies) to address wage payment violations;
   • Enacting strong non-retaliation protections to ensure all affected workers can speak up about violations;
   • Equipping state agencies with adequate resources and staffing;
   • Pursuing joint employer liability for wage claims when necessary; and
   • Adopting tested best practices for strategic enforcement, co-enforcement, and employer and worker outreach and education.

Recommended sources for model legislation on these and related policies:

• Winning Wage Justice (National Employment Law Project)
• The DNA of Worker Rights: Key Building Blocks of California’s Model Framework of Wage and Hour Standards (UC Berkeley Center for Law and Work)
• Wage Theft Policy Playbook (State Innovation Exchange)
• The Labor Standards Enforcement Toolbox (Rutgers Workplace Justice Lab)

The 1938 Fair Labor Standards Act (FLSA) sets guidelines for the hours and nonhazardous jobs for which employers can hire minors under 16. The FLSA also empowers the Secretary of Labor to prohibit all minor employment in occupations that are particularly dangerous through “hazardous occupations orders.” It covers employers that conduct at least $500,000 in annual sales or any employees engaged in interstate commerce (this coverage is interpreted broadly with respect to child labor—if a firm engages in any form of interstate commerce, its minor workers are covered). Federal law sets an important but limited and increasingly outdated floor for child labor standards. For example, federal child labor standards in agriculture are much weaker than in nonagricultural employment, hazardous occupations orders have not been updated in decades, and there are no work hours protections for minors over the age of 15 (see Table 1).

Table 1

What are the threats to federal child labor standards?

Threats to federal child labor standards include federal proposals to weaken child labor protections and ongoing state-level efforts to erode the FLSA by proposing or enacting state child labor legislation that conflicts with federal law:

• Project 2025, the anti-worker policy roadmap being implemented by the Trump administration, proposes:
  1.  Eliminating federal hazardous occupations orders, which protect minors from employment in particularly dangerous jobs, like mining and roofing; and
  2. Allowing states to obtain waivers from the FLSA—including provisions that prevent harmful forms of child labor.

• In recent years, a coordinated, industry-backed campaign to erode child labor standards has generated proposals in dozens of states to weaken or eliminate state standards exceeding the minimal federal “floor” for child labor protections. Some state lawmakers have gone even further, proposing or enacting bills that directly conflict with federal minimum standards, while stating intent to build pressure for the eventual relaxation or elimination of FLSA standards for the whole country. Common targets for these attacks on state child labor standards include:
  • Eliminating youth work permits
  • Eliminating hours of work guidelines for 16- and 17-year-olds
  • Eliminating meal or rest break requirements for minors
  • Expanding employers’ ability to hire minors for previously prohibited hazardous jobs
  • Lowering the age at which minors can serve alcohol and/or work in establishments serving alcohol
  • Establishing or expanding laws that allow employers to pay students or other youth a subminimum wage
  • Creating new exemptions from state child labor protections, for example for homeschooled youth or youth in certain occupations
  • Creating new systems—such as unregulated “internship” or “work-based learning” programs—that allow employers to skirt child labor laws or hire minors for otherwise prohibited hazardous work

By repeatedly proposing—and in some cases implementing—standards that conflict with federal law, these states are chipping away at the already fragile federal floor for workplace protections.

How can states maintain and strengthen child labor protections?

States have legal authority to establish their own child labor standards; the FLSA sets a floor above which states can adopt and enforce their own stronger standards.

States have historically played a prominent role in setting child labor standards—some states have protections in place that predate the FLSA, and many have long legislated above federal law. Other states maintain standards that generally mirror the FLSA, with few additional protections, and some states have standards that are significantly weaker than the FLSA. In many cases, a state’s standards are stronger than the FLSA in some areas and weaker in others. When a state standard is weaker than the FLSA, federal law applies. However, since only federal agencies can enforce federal laws, state laws that fall short of federal law increase the risk of federal violations while shifting the enforcement burden to already-overburdened federal agencies. Amid Trump administration attacks, federal agencies are now facing even more pronounced staffing shortages that will further limit their enforcement capacity.

In response to increasing child labor violations, many states are already taking action to strengthen state child labor standards and enforcement. Given the very real risk that aspects of FLSA child labor protections could be eliminated (or will go unenforced), all states should at a minimum lock in existing FLSA standards and ensure state capacity to enforce them. Beyond this, states have critical opportunities and responsibilities to modernize child labor standards beyond the minimal, outdated FLSA floor to ensure that minors who must work or choose to work can access safe work experiences that don’t harm their health or education. Fortunately, state lawmakers have an array of options to consider and tested legislative models to use as a guide.

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

State standards should be at least as strong as those in the FLSA. Ensuring that state standards mirror FLSA minimums protects both employers and children from the risks and confusion that arise when state standards contradict federal law. For example, after a Utah employer was fined for violating federal child labor law for incorrectly following state child labor guidelines that were weaker than FLSA standards, Utah enacted a bill to align state guidelines on hours of work for minors under 16 with FLSA standards.

Weaker standards often appear in areas of state code covering work hours or prohibited hazardous occupations. For example:

• Idaho allows employers to schedule 14–15-year-olds up to nine hours a day or 54 hours per week. Federal law allows employers to schedule 14–15-year-olds up to three hours a day or 18 hours per week in a school week and up to eight hours per day and 40 hours per week in a nonschool week.
• Iowa allows employers to hire 14-year-olds in industrial laundries and 15-year-olds in light assembly work, among other weaker standards. Federal law does not permit 14–15-year-olds to work in these settings.
• West Virginia allows employers to hire 16–17-year-olds enrolled in a “youth apprenticeship program” for all 17 hazardous occupations prohibited for minors under federal law. Federal law allows 16–17-year-olds to perform certain types of intermittent work in only seven of these occupations when enrolled in a bona fide registered apprenticeship program meeting certain stringent standards.

State policymakers should review their child labor statutes alongside federal child labor laws to identify areas of weakness. At a minimum, states should ensure that their guidelines for hours of work and hazardous occupations orders are at least as protective as the FLSA.

Step II: Close coverage gaps and address weaknesses in FLSA minimum protections

States can address many longstanding limitations and gaps in federal child labor protections. Examples of priority actions for state lawmakers to consider include:

1. Maintain effective youth work permit systems: Youth work permits have been shown to reduce child labor violations and aid in enforcement. The FLSA suggests—but does not require—that employers maintain certificates confirming the age of minors they employ. It also does not require minors to receive a permit as a condition of employment. Instead, youth work permit policies have historically been left to states. Most states already have some sort of permit system in place. Youth work permits are often simple, one-page forms that engage employers, parents, youth, and sometimes educators, in ensuring a child’s employment is legal, safe, and age-appropriate. Permits remind employers of existing child labor laws, inform parents of their child’s rights and affirm their consent, and aid state agencies in investigations of potential violations. States without work permit systems should implement them and states with existing work permit systems should assess and modernize their systems, as recently done in Illinois and New York and proposed in California.
2. Implement or expand work hour guidelines for 16- and 17-year-olds: The FLSA sets standards to protect children from excessive hours of work, especially during the school year. However, the FLSA was passed at a time when fewer than half of students completed high school, and its hours of work guidelines have never been updated to cover older minors (16- and 17-year-olds). In the absence of state standards, older teens can be scheduled to work unlimited hours per day or per week, including during school weeks. Some states have already adopted standards to address this gap, but fewer than half of states have hours guidelines in place for older teens. States should set maximum daily and weekly work hours for 16–17-year-olds and prohibit overnight work during the school week. Minimum standards should include limiting employers to scheduling 16–17-year-olds for no more than 32 hours in a school week, as nine states already do,{{1}} and prohibiting employers from scheduling 16–17-year-olds to work after 10 p.m. or before 6 a.m. (or similar), as 20 states and D.C. already do.{{2}}
3. Update prohibitions on hazardous child labor: The FLSA prohibits minors under 18 from working in a list of 17 nonagricultural occupations and 11 agricultural occupations that have been found to be particularly hazardous for minors. Many of these hazardous occupations orders have never been updated. And new orders have not been created to account for new forms of hazards in our modern economy, particularly in agriculture. Moreover, the FLSA opens the door to dangerous exemptions from some hazardous orders,{{3}} with language that allows student apprentices and learners enrolled in approved training programs to do certain types of hazardous work under close supervision. State lawmakers can update prohibitions on hazardous child labor by expanding existing hazardous orders, creating new orders to cover hazardous occupations not covered under federal law, and ending student learner and apprentice exemptions. Lawmakers can use the 2002 National Institute for Occupational Safety and Health recommendations to the U.S. Department of Labor as a guide for revising state hazardous orders. For example, Illinois recently updated and clarified state law to prohibit employment of minors in hazardous workplaces not covered under federal law, such as gun ranges and establishments primarily involved in the sale of tobacco or alcohol.
4. Extend equal protections to children working in agricultural occupations: Agriculture is the most dangerous sector of employment for minors, yet federal child labor standards remain much weaker in agriculture than in nonagricultural industries. State lawmakers can address this longstanding gap in federal law by aligning agricultural child labor standards for work hours and hazardous work with standards for nonfarm work. For example, in 2025, New Jersey lawmakers introduced a bill to raise the minimum age for agricultural employment to 14 and align work hours and hazardous work protections in agriculture with nonagricultural standards, among other updates to protections for farmworkers of all ages.
5. Increase civil penalties to deter violations and update them based on inflation: Under most existing state penalty structures, civil monetary penalties for child labor violations are very limited and, in some cases, nonexistent. Some states levy no civil penalties at all, and many states have not reviewed or updated penalty amounts in decades. In Indiana, for example, penalties range from a warning letter for an initial violation to a maximum of only $400 for a fourth violation within two years. Low or nonexistent penalties that can easily be absorbed as a “cost of doing business” do not deter employer violations and leave state enforcement agencies with few tools for ensuring compliance by bad actors. To ensure penalties serve as effective deterrents and enforcement tools, state lawmakers should set meaningful minimum penalties for first offenses and very high maximum penalties for serious or repeat offenses, as Illinois did in 2024. States can use federal civil penalties and annual adjustments as a benchmark; for example, current federal maximum civil penalties for a child labor violation range from $16,035 to $145,752, and rates are adjusted for inflation each year.
6. Strengthen state enforcement capacity and authority: Ensuring adequate state enforcement of child labor laws will become particularly important as federal enforcement capacity is diminished.
   • States should ensure funding for dedicated child labor enforcement staff so as not to take resources away from other wage and hour investigations. For example, a Virginia lawmaker recently requested an increased budget appropriation for child labor enforcement.
   • States should grant labor agencies sufficient authority to fulfill enforcement goals. For example, Nebraska recently enacted a bill that gives its labor agency power to subpoena records from employers suspected of violating the law.
7. Eliminate youth subminimum wages: The FLSA allows workers under age 20 to be paid as little as $4.25 per hour for their first 90 days of employment and allows employers to pay a lower minimum wage to full-time students in certain occupations, student learners, and apprentices. In recent years, some states have taken action to close these gaps so that all workers—regardless of their age—have a right to the minimum wage. All states should follow suit.

Step III: Modernize child labor standards to protect children’s health and wellbeing, safeguard their right to education, and improve their career prospects

The most effective child labor laws implement evidence-based guardrails to prevent excessive and hazardous work—as discussed above—alongside innovative policies to empower youth workers, deter violations, and provide meaningful redress and support to victims if violations occur. State lawmakers need not be bound by traditional areas of policy covered by the FLSA and can also:

1. Require workers’ rights education: If young workers do not know their rights, they will be less likely to report unsafe or illegal working conditions. States can invest in labor education to address this information gap. For example, California mandated that high schools annually teach students about workplace rights and the labor movement following a curriculum developed by the UC Berkeley Labor Center.
2. Mandate employer training on child labor laws and commitment to following the law: For example, Washington requires businesses who hire minors to obtain a special endorsement on their business license affirming compliance with child labor laws.
3. Encourage reporting by protecting whistleblowers and victims: Most labor investigations depend on worker reporting. Because young workers lack experience and knowledge about workplace rights and may fear employer retaliation, loss of wages, or immigration enforcement, many workplace abuses go unreported and uninvestigated. To address these enforcement challenges, state lawmakers should:
   1. Provide multiple avenues for child labor victims to be made whole after they report violations and risk losing their job. In most states, civil penalties for child labor violations are deposited into the state’s General Fund, and minors receive no compensation in the form of damages owed by the employer. Moreover, when a child is injured or killed on the job while employed illegally, they (or their family members in the event of the child’s death) are generally limited to the workers’ compensation system as their sole source of financial compensation. However, several states have enacted or proposed bills to make aggrieved minors eligible for additional compensation in the form of damages; for example, Colorado recently made it possible for minors who are injured while employed under illegal conditions to pursue private legal action and receive monetary damages.
   2. Enact whistleblower and anti-retaliation protections to protect workers who report labor abuses, as recently done in Minnesota.
   3. Remove provisions of state law that may discourage reporting of violations, such as those holding parents criminally responsible for allowing a child to be employed under illegal conditions, as Colorado recently did.
   4. Provide wraparound services to victims of illegal child labor to address root causes of excessive or hazardous work. For example, unaccompanied migrant youth should be provided with legal services, assistance in securing safe and age-appropriate work, and connections to community-based organizations or local government agencies that can provide additional supportive services.
4. Use innovative enforcement strategies to meaningfully hold employers accountable: Civil monetary penalties are a necessary but insufficient deterrent. State lawmakers should take a holistic approach to changing employer behavior and significantly increase the financial and reputational costs associated with breaking the law. They should:
   1. Use “hot goods” provisions and “stop work” orders to immediately disrupt the normal business of employers who are actively violating the law. “Hot goods” provisions allow courts to stop the flow of goods produced using illegal child labor and are currently in place federally. “Stop work” orders allow labor agencies to require the cessation of business until child labor violations are addressed, increasing the cost of violating the law. New Jersey permits such orders to be used when minimum wage violations are occurring.
   2. Bar violators from receiving public funding as proposed in Alabama, and implement other penalties, like revoking an employer’s permission to hire minors when they violate the law, as enacted in Washington.
   3. Create lead corporation accountability, so corporations are held jointly responsible for violations committed by their subcontractors or staffing agencies as proposed in a federal bill.
   4. Make employer violations data more accessible to the public—as recently mandated in Colorado—or publicly shame companies that violate the law by posting about violations on the state labor agency’s website—similar to New Jersey and New York.
   5. You can read more about these and other policies to address and deter violations here: Policies for states and localities to fight oppressive child labor.

Additional recommended resources 

• Child labor state legislation tracker (Economic Policy Institute) 

• Campaign to End US Child Labor 

• Child Labor Coalition at the National Consumers League 

• Federal child labor regulations under the Fair Labor Standards Act  

• State child labor laws (U.S. Department of Labor; note that this page may not reflect all recent state legislative changes) 

• How states can stop the corporate campaign to roll back child labor protections (State Innovation Exchange and Economic Policy Institute) 

Editor’s note: This piece was revised on October 24, 2025, to add an “Additional recommended resources” section. 

{{1.}} Connecticut (32 hours), Florida (30), Kentucky (30), Maine (24), Michigan (24), New Hampshire (30), New York (28), Pennsylvania (28), Washington (20). See https://www.dol.gov/agencies/whd/state/child-labor.

{{2.}} Alabama (10 p.m. to 5 a.m.), Arkansas (11 p.m. to 6 a.m.), California (10 p.m. to 5 a.m.), Connecticut (10 or 11 p.m. to 6 a.m.), Florida (11 p.m. to 6:30 p.m.), Indiana (10 p.m. to 6 a.m.), Kentucky (11 p.m. to 6 a.m.), Louisiana (11 p.m. or 12 a.m. to 5 a.m.), Maine (10:15 a.m. to 7 a.m.), Massachusetts (10 p.m. to 6 a.m.), Michigan (11:30 p.m. to 6 a.m.), Minnesota (11 p.m. to 5 a.m.), New Jersey (11 p.m. to 6 a.m.), New York (10 p.m. to 6 a.m.), North Carolina (11 p.m. to 5 a.m.), Ohio (11 p.m. to 7 a.m.), Pennsylvania (12 a.m. to 6 a.m.), Rhode Island (11:30 p.m. to 6 a.m.), Tennessee (10 p.m. to 6 a.m.), Washington (10 p.m. to 7 a.m.), and D.C. (10 p.m. to 6 a.m.). See https://www.dol.gov/agencies/whd/state/child-labor.

{{3.}} Hazardous occupation (HO) 5. Power-driven woodworking machines; HO 8. Power-driven metal-forming, punching and shearing machines; HO 10. Power-driven meat-processing machines, slaughtering and meat packing plants; HO 12. Balers, compactors, and power-driven paper-products machines; HO 14. Power-driven circular saws, band saws, guillotine shears, chain saws, reciprocating saws, wood chippers, and abrasive cutting discs; HO 16. Roofing operations and work performed on or about a roof; HO 17. Trenching and excavation operations.

All children deserve to attend welcoming and well-funded schools where they can learn and grow, regardless of race, disability, or income. But funding for public schools, where nearly 90% of all U.S. students learn, is at a near crisis point. The Trump administration’s goals, which are taken right out of Project 2025, seem to be to defund public education to the point that it doesn’t work, then offer private school vouchers as a solution to a manufactured problem. In this post, we highlight five ways public education is on fire in the United States and the damage this will do to students’ abilities to learn and thrive. Instead of cutting funds, lawmakers should invest in public schools, one of the best tools we still have to build a prosperous, equitable country.

Alarm level 1: COVID-19 relief funding for public schools is winding down. In some cases, the administration is ending it prematurely

This academic year (2024–2025) marks the end of the financial support schools were receiving to address the impacts of the COVID-19 crisis, the Elementary and Secondary Schools Emergency Relief III funds (ESSER III). The COVID-19 pandemic, and the changing learning environments that ensued, meant that schools needed funds to address the significant academic, social, emotional, physical, and mental health needs of their students. This funding was distributed in recent years with the last distribution, ESSER III, worth a total of $122 billion allocated to districts around the country. Many students, especially those living in poverty, have not recovered from pandemic-related learning loss. The end of this funding means that districts will now have fewer resources to help students get back on track. Rigorous research has demonstrated that this federal aid to public schools was highly successful, with measurable improvements to student outcomes in states and districts where more aid was spent. Taking the educational challenges imposed by the pandemic seriously would mean recognizing the high value this aid has provided.

However, in late March, the Trump administration canceled extensions that had been granted to states to spend remaining ESSER funds. Effectively, districts are losing out on the funding allocated to them in the form of COVID-19 relief funds. Canceled extensions represent almost $3 billion in lost funding that had already been committed to tutoring services, reading interventions, building improvements, and more. Clawing back these funds jeopardizes improved academic outcomes for many students and their ability to learn in healthy and safe environments. The administration’s refusal to reimburse school districts for funding that has already been spent could force them to cut teaching and other staff positions to make up the cost, ultimately harming students.

Alarm level 2: The administration is lawlessly dismantling the Department of Education and attacking inclusive schools

The winding down and clawing back of ESSER funding are simultaneously occurring at a time when President Trump signed executive orders to (1) dismantle the Department of Education and “return the funding to the states” and (2) regulate curriculum taught in the more than 13,000 public schools in the country.

One order directed Secretary of Education Linda McMahon to shut down several functions of the Department of Education (ED) and send them back to the states. Prior to this order, the White House had directed the ED to lay off 1,300 employees, a directive that is currently in litigation. The other order resulted in a “Dear Colleague letter” from Secretary McMahon demanding that states certify that they will not engage in “illegal DEI practices” as a condition of receiving the federal funds (This order is also currently in litigation.). As it stands, much of the Department of Education funding goes directly to state and local school systems. The ED provides targeted funding to public schools for special education through the Individuals with Disabilities Education Act and supports high-poverty districts through Title I grants. These grants make up for shortfalls in funding that high-poverty districts experience when they get funding from local sources.

To be clear, closing the Department of Education, and reappropriating major funding programs requires an act of Congress, and it is local school districts who have control over what is taught in schools—not federal regulators. Thus, while these executive orders have the potential to inflict a lot of damage, it’s unclear whether these orders can proceed without running afoul of federal laws. If these orders result in delays in funding distributions or outright cuts, students could experience declines in academic achievement, exacerbating existing racial and income disparities and limiting students’ long-term opportunities. If President Trump acts outside of his authority to slash the agencies’ work, the guardrails will essentially be pulled off this funding, which is extremely effective at redistributing funds based on district need. President Trump says he’ll return money to states for them to distribute it, potentially creating a situation where states have to compete for funds. This would create a patchwork in public funding for public schools, one in which some districts risk falling even further behind.

Alarm level 3: Lawmakers are pushing a mounting wave of voucher programs, an increasingly large cost to state-funded education

While many school districts struggle to maintain basic education funding, school privatization efforts are continuing throughout the country, and states like Arizona, Florida, and Ohio are notorious for the budget-breaking cost of universal voucher programs.

Figure A shows the current cost of voucher programs as a share of K–12 education funding in states where over 5% of the budget is currently going to school voucher programs. In the current school year (fiscal year 2025), voucher costs make up anywhere from 5% for states with early voucher programs to upwards of 25% of the entire public education budget for states with mature programs.

Figure A

Because statewide private school voucher programs are funded with state dollars, voucher spending is shown as a proportion of state education funding rather than state and local funding. On average, about 46% of funding for K–12 schools comes from state revenue sources. In states with voucher programs, private schools divert state dollars that could otherwise be available to public schools. For now, local funding for public schools is protected from diversion to voucher programs, although some states with voucher programs are also threatening this source of public school funding by cutting or eliminating property taxes.

Vouchers degrade the quality of education for students who use them

Time and time again research has shown that vouchers harm academic outcomes. Causal studies across three states and Washington, D.C., demonstrate negative effects on test scores for students who use a voucher to switch from public to private school. These test score declines can persist over two years or more and are comparable or worse than declines due to COVID-19 and Hurricane Katrina. Meanwhile, students who leave private schools and return to public schools have experienced increased academic achievement. While some may argue that test scores from the National Assessment of Educational Progress indicate that private school students fare better academically than their public school peers, this is more a reflection of the parents’ socioeconomic status and education level than the impact of private schooling on students. Research also suggests vouchers do not reliably improve high school graduation and college attendance rates. Because of these reasons, lawmakers looking to improve student outcomes should not pursue vouchers.

School vouchers have costs for students who remain in public school

In addition to the direct costs that the state incurs for school vouchers, school districts experience an additional cost when they lose students to private school: the cost of providing the same level of education for fewer students in public education. This cost is entirely borne by the students who remain in public education, even though they affirmatively did not make the choice to take up vouchers. When students leave public schools with a voucher, the school districts must still pay the same amount for costs that can’t immediately adjust to declines in enrollment, such as cooling/heating and utilities. These required payments for a district’s fixed costs mean that districts will have even less to spend on the costs that can adjust due to changes in enrollment. What this means is that public school students who remain in public school will have less funding allocated to them for adjustable costs like teaching, curriculum development, and pupil support services due to other students taking up voucher programs. (To calculate this cost for your district, see EPI’s fiscal externality calculator).

Alarm level 4: National voucher proposals threaten public schools throughout the country

Beyond state voucher programs, Congress is considering national voucher proposals. This would enlarge the scope of vouchers beyond Republican-controlled states. The Educational Choice for Children Act, or ECCA, (H.R. 817, S.292) is a proposal to create a national voucher program. The program would divert over $10 billion per year in tax dollars to private schools and families who homeschool. The bill would do this by establishing a new dollar-for-dollar tax credit for individuals and corporations that make charitable contributions to organizations that give scholarships— or vouchers—for students to attend private schools. Donors who give corporate stocks would receive more back in tax cuts than the after-tax value of the stocks if they had sold them. 

Beyond vouchers harming student educational outcomes, the program itself would be extremely expensive. The bill proposes that Congress allocate $10 billion in tax credits for the voucher programs. But that doesn’t even account for the cost of voucher programs to public schools. The sponsors of the bill estimate that ECCA would provide vouchers for 2 million students. Given that at least two-thirds of students who take up vouchers previously attended private school, we can estimate that 666,667 voucher recipients will come from public school, which is about 1.4% of total public school students. Using our fiscal externality calculator, we estimate that students who remain in public schools would lose an average of $151 per pupil, and public school systems would lose a total of $6.225 billion dollars due to a national voucher scheme.

Alarm level 5: Tax cuts reduce available revenue for public schools

Many states are following a recent trend of reducing revenue available for schools through sweeping tax cuts. Corporate and personal income tax revenue represents about half of state tax revenue, which, in turn, funds about half of K–12 education budgets. From 2021 through 2024, 28 states passed personal or corporate income tax cuts, which will result in hundreds of billions of dollars in lost revenue by 2028, and more states are considering or have passed income tax cuts in 2025. At the same time, some states are cutting and attempting to eliminate property taxes, which account for over a third of revenue for K–12 education on average. States that want to invest in opportunity and long-term economic prosperity and to help their students continue recovering from pandemic-related learning loss should reverse this harmful trend.

Conclusion: What would happen if we boosted public school funding instead?

Given the real and damaging threats to public school funding, we conclude by asking what students actually need to succeed. Growing evidence over the last decade shows that public schooling in the United States simply needs more resources to deliver even better student achievement—not some radical disruption in how it is delivered and by what institutions.

For example, research has shown that school finance reforms between 1972 and 2010 led to a 10% increase in school spending for 12 years, which increased high school graduation rates, wages and family incomes in adulthood for children from districts with the spending increase. Others have similarly found that a $1,000 increase in per-pupil spending for low-income districts would reduce the test score gap between low- and high-income school districts within a state by nearly 40% of the baseline gap.

Increasing funding, rather than withholding federal aid or using public dollars to pay for private schooling, is the path forward for public schools. Public schools have fallen short in many communities because of lawmakers’ choices to underfund them. But the only education system that can fulfill the promise of equal opportunity for all children, regardless of race, disability, or income, is a fully funded system of public schools. Lawmakers interested in building prosperous communities should invest in public schools rather than defunding and privatizing them.

The federal government’s response to the COVID-19 pandemic was different. By providing strong fiscal relief at the scale of the problem, federal lawmakers protected the country from a protracted recession and provided regional policymakers with the resources to make transformative investments in support of working families.

However, as federal government relief efforts wind down, Midwestern policymakers must take full advantage of an improving economy and new federal resources made possible through recent legislation. They can use these resources to bolster public systems (e.g., education, health care) and rebuild the structures and programs that will create high-quality union jobs in infrastructure, manufacturing, and clean energy technologies.

The Midwest’s story as a place of opportunity for workers building the core products of the U.S. economy need not be lost to the past. Regional lawmakers have a historic opportunity to restore that character, advancing equity and economic opportunity for all who call the region home.

Midwestern policymakers have an opportunity to change course to improve the lives of working families in the region

This report closely examines the economy of the Midwest as the nation recovers from the COVID-19 pandemic. The influx of federal funds from the CARES Act, the American Rescue Plan Act (ARPA), and other federal legislation blunted the worst economic effects from COVID, but those supports are now waning. Policymakers across the Midwest have choices to make, choices that will critically shape the economic trajectory for working families in the region going forward.

Midwestern policymakers enacted numerous anti-worker policies in the wake of the Great Recession

The 12 states of the Midwest region{{1}} faced just such a moment of decision over a decade ago. The Midwest entered the Great Recession as a region with (on the whole) high workforce participation, strong public- and private-sector unions, and many dynamic local governments that were supporting strong labor standards and safe workplaces (Pabst 2011; McKinney 2021; Wolfe et al. 2021).

In the wake of the Great Recession, though, right-wing politicians took control in all Midwestern states except Illinois and Minnesota (Tope, Pickett, and Chiricos 2015) and began passing policies that had negative outcomes for workers, especially for Black and brown workers. The majority of Midwestern states embraced fiscal austerity, disinvested in public services, and rolled back workers’ rights. Further, they restricted local governments from (among other things) raising minimum wages, enacting paid leave, or setting high-road labor standards for publicly funded development projects. The predictable outcomes were an increase in inequality, wage stagnation, and worsening racial wage and employment gaps.

Table 1 notes some of the key policy decisions Midwestern states made from the Great Recession through the beginnings of the COVID-19 pandemic.

Table 1

Anti-worker policy changes

RTW laws. So-called right-to-work (RTW) laws limit the power of private-sector unions. RTW laws have been shown to exacerbate income inequality, lower worker wages, and widen racial wage and employment gaps (Sherer 2023).

Five Midwestern states already had RTW laws on the books before the Great Recession; in the 2010s, Indiana, Michigan, and Wisconsin joined them. Missouri also enacted RTW in 2017, but Missouri’s voters overturned that decision in a 2018 ballot measure, with 67% of those voting opposed to RTW (Missouri Secretary of State 2018).

Restrictions on public-sector unions. In addition, eight Midwestern states passed legislation limiting the rights of public employees to organize and collectively bargain. The first of these was passed in a once pro-union state. In 1959, Wisconsin was the first state to grant public employees the right to collectively bargain (Lichtenstein 2002). The passage of Act 10 in March 2011 undermined those rights.

Wisconsin’s Act 10 prohibited negotiations over most workplace issues (such as hours of work, employee discipline, health insurance, and safety) and limited unions’ rights to collect union dues through payroll deduction. It also forced all unions to annually hold a recertification vote to maintain their status as a collective bargaining representative. The law further prevented public employers and unions from agreeing to worker raises above the Consumer Price Index without subjecting it to a voter referendum. The law’s clear purpose was to limit the power of workers, and it resulted in a significant decline in union membership in the state.

Preemption. A third policy enacted by most Midwestern state legislatures was the preemption of local labor standards. Preemption refers to state laws restricting the right of local governments (mostly cities and counties) to enact local ordinances on certain issues. Three particular local government actions were targeted by these preemption laws, which prohibited cities and counties from:

1. Setting a minimum wage higher than that of the state. In Kansas City, Missouri, and Milwaukee, Wisconsin, preemption laws forced a reduction in the cities’ existing minimum wages.
2. Enacting paid leave requirements for employers receiving public money.
3. Setting standards for municipal contracts and procurement through mechanisms common elsewhere such as project labor agreements (PLA)—contracts used in the construction industry to set basic conditions for safety, pay, and benefits on municipal projects—and prevailing wage laws.

Worker-friendly policy changes

Minimum wage increases. There is strong evidence that higher minimum wages are an effective policy for raising the pay of low-wage workers (EPI 2023b). Six of the 12 Midwestern states passed laws to raise their minimum wages during this period. However, the minimum wage in five Midwestern states is still set at the federal level of $7.25.

Medicaid expansion. Medicaid expansion reduces a state’s uninsured rate (Guerra-Cardus and Lukens 2023) and is associated with lower mortality rates, especially among women and Black people (Lee, Dodge, and Terrault 2022). Ten Midwestern states have expanded Medicaid through the Affordable Care Act; two have not (KFF 2023).

Expansion of collective bargaining rights. Two states in the Midwest—Minnesota and Illinois—took steps during this period to strengthen workers’ rights. Minnesota banned noncompete clauses and captive audience meetings, among other measures, and Illinois enshrined collective bargaining rights in the state’s constitution.

Midwestern states should pursue pro-worker policies to build on post-pandemic progress

With the onset of the COVID-19 pandemic, the region’s economy was bolstered by significant investment from the federal government. This investment—through the CARES Act, the American Rescue Plan Act, and other legislation—provided relief at the scale of the problem.

When millions of jobs were lost in the initial months of the pandemic, most of the unemployed and their families were reasonably protected. Indeed, pandemic safety net programs kept millions out of poverty (Banerjee and Zipperer 2022). Supports for businesses and fiscal aid to state and local governments prevented more severe layoffs. With household income reasonably maintained by federal programs, strong consumer demand fueled a rapid recovery, with employers eager to rehire staff. This tight labor market gave low-wage workers leverage, leading to strong real wage growth for most workers and a job market that had largely recovered by the end of 2022.

Midwestern states now have an opportunity to build on this momentum and shift away from the policy choices that weakened worker power prior to the pandemic. Going back to the anti-union, anti-worker austerity of the 2010s will exacerbate inequality, suppress wages, and weaken public services. That is not the path the Midwest should take. Instead, the Midwest should take the high road. Policies to support collective bargaining, strengthen labor standards, and invest in public services will lead to better lives for working families across the region.

Subsequent sections of this report describe how the Midwest economy has performed coming out of the pandemic, and how that performance compares both with the period leading up to the outbreak of COVID-19 and with the period of economic recovery following the Great Recession. We first look at the recovery of jobs and at trends in unemployment rates and employment levels. Next, we look at wages and other measures of job quality. We then discuss poverty and inequality in the region. We close with a discussion of the role of unions and collective bargaining in strengthening job quality and the lives of working families.

Jobs and unemployment

The Midwest continues to face job deficits relative to other regions

As of May 2023, the Midwest has gained 151,700 jobs (+0.5%) since February 2020—the second-smallest gain of any region. The Northeast gained less than 3,000 jobs (+0.01%), while the South gained over 2.5 million jobs (+4.6%) and the West gained nearly 1.1 million jobs (+3.0%) (Economic Policy Institute analysis of BLS-CES various years).

While the raw numbers seem to imply the Midwest is doing better than the Northeast, the Midwest is in fact the only region facing a jobs deficit—the gap between the current level of jobs and the level of jobs expected under pre-recession employment rates when accounting for population growth. The region would need to add about 116,000 jobs to regain its February 2020 employment at its May 2023 population size.

Meanwhile, all other regions have added more jobs than we would expect had they not experienced a recession. The West has added almost 330,000 jobs above this counterfactual (employment levels if the pandemic recession had not occurred), while the South has added over 188,000 jobs and the Northeast has added almost 38,000 (see Figure A).

Figure A

The Midwest’s unemployment rate is at a historic low, but racial disparities remain a concern

As a result of federal action to promote a strong jobs recovery from the COVID-19 pandemic recession, by 2022 all regions had achieved near-full or full recoveries to 2019 unemployment rates. The Midwest was no exception.

The region has enjoyed comparatively low unemployment rates over the medium term: The Midwest’s unemployment rate has been lower than the U.S. average for the past 13 years and has been the lowest of any region for seven of those years (see Appendix Figure A). As of May 2023, the Midwest’s unemployment rate—3.2%—was once again lower than any other region’s and has reached a historic low for the region (FRED 2023).

Within Midwestern states, unemployment remained highest in Illinois (4.1%) and Michigan (3.7%) as of May 2023. As shown in Table 2, all other Midwestern states had unemployment rates below the national average of 3.7% (BLS-LAUS various years).

Table 2

Workers of all races and ethnicities fared better during the current economic recovery than after the Great Recession. Over the first three years of the post–Great Recession recovery (2007–2010), the unemployment rate increased by over 6 points for Black, Hispanic, and AAPI/AIAN/multiracial workers{{2}} and nearly 4 points for white workers in the Midwest (see Figure B). After the Great Recession, these unemployment rates did not return to pre-recession rates until 2015—eight years later.

Figure B

In contrast, between 2019, the year just prior to the pandemic, and 2022, the unemployment rate declined among white workers (0.2 percentage points) and AAPI/AIAN/multiracial workers (0.8 percentage points). The unemployment rate for Black workers stayed the same. Among Hispanic workers, it increased 0.3 points.

Throughout this period, though, severe disparities have persisted. The unemployment rate for Black workers and AAPI/AIAN/multiracial workers was more than 2.5 times the white unemployment rate in 2022. Reducing these disparities requires bold investments, including expanding workers’ rights and worker power, investing in the care economy and public sector, addressing the affordable housing crisis, and reducing barriers to employment for formerly incarcerated Midwesterners (Kamper 2022a).

Employment

The Midwest achieved a quick return to pre-pandemic employment and must resist austerity to sustain progress

Arguably the best measure of labor market health, the prime-age employment-to-population ratio or prime-age “EPOP” is the share of workers ages 25–54 who are currently employed. Whereas other measures—such as the unemployment rate and the labor force participation rate—can mask labor market weakness resulting from workers’ decisions to seek work or be skewed by demographic changes, the prime-age EPOP is a straightforward calculation of what share of the core working-age population has a job.

The Midwest is a region that works. As shown in Figure C, since the mid-1980s, the Midwest has consistently had the highest employment-to-population ratio of any region of the country, reaching a peak of 84.3% in 1999.

However, failure to restore the public sector in the wake of the Great Recession in most states has stalled employment growth, and racial and gender employment gaps persist. The post-2000 decline in the prime-age EPOP nationwide was a result of fiscal austerity, which sapped aggregate demand (spending by households, businesses, and governments) and prevented a full recovery of employment (Bivens 2014). In the Midwest, harmful trade policy exacerbated these dynamics by further reducing aggregate demand (Shields and Stettner 2020).

Fortunately, fiscal stimulus in the wake of the COVID-19 pandemic has quickened the recovery of the prime-age EPOP relative to the early aughts.

Figure C shows that despite the unprecedented job losses caused by the COVID-19 pandemic, in both the Midwest and other regions, the prime-age EPOP recovered significantly faster after the pandemic-induced recession than it did following the Great Recession. In the Midwest, the prime-age EPOP took 11 years following the Great Recession to recover to its 2007 levels, and all regions exhibited similar trends. In contrast, in all regions, the prime-age EPOP has nearly recovered to its 2019 rates within three years. In 2022, the Midwest prime-age EPOP of 82% remains the highest in the country (see Figure C). Nationwide, the June 2023 prime-age EPOP rate—80.9%—is approaching the all-time high of 81.9% reached in April 2000 (Irwin 2023).

The federal response during the pandemic hastened the region’s employment recovery. However, without policies to support high-road jobs, the Midwest risks further decline in job quality, weakening workforce participation, and continued growth in inequality.

Figure C

Though the prime-age EPOP varies widely across states, all Midwestern states’ prime-age EPOPs recovered faster after the pandemic than after the Great Recession

Within the Midwest, the prime-age EPOP varies widely across different states but has exhibited similar trends since 2007. The prime-age EPOP is consistently highest in North Dakota, South Dakota, Iowa, Nebraska, and Minnesota, and lowest in Michigan, Ohio, Indiana, and Illinois.

In all Midwestern states, the prime-age EPOP fell during the Great Recession and faced an uneven recovery over the subsequent decade. During the pandemic recession, the prime-age EPOP fell more quickly and recovered more quickly than during the Great Recession, following a v-shaped pattern in most states.

Compared with 2007, the year prior to the Great Recession, and 2019, the year prior to the COVID-19 pandemic, four states exhibit prime-age EPOPs that are higher in 2022 than in both key previous years: Indiana, Illinois, Missouri, and Iowa. However, the other eight Midwestern states are faring worse on prime-age EPOP in 2022 relative to at least one of those years—or relative to both, as is the case in Ohio and Wisconsin. Wisconsin’s 2022 prime-age EPOP lags furthest behind 2007 levels, followed by slightly smaller gaps in Ohio, North Dakota, and South Dakota. South Dakota’s prime-age EPOP increased over its 2019 rate more than any other Midwestern state; the opposite is true for Wisconsin (see Figure D).

Figure D

Employment disparities by race and gender persist and, in some cases, have grown

Despite high employment rates overall and progress for Black workers, disparities remain in employment based on race/ethnicity and gender.

Employment rates by race/ethnicity

While the gaps between the white EPOP and the AAPI, Hispanic, and Black EPOPs have narrowed over the last 15 years, significant gaps remain, and the prime-age EPOP gap between white workers and AIAN/multiracial/other workers has grown (see Figure E). The Black prime-age EPOP (76.4% in 2022) is 7.1 percentage points lower than the white rate of 83.5%. The AIAN/multiracial/other prime-age EPOP (68.0%) is 15.5 points lower than the white rate.

The prime-age EPOP among white, Hispanic, and AIAN/multiracial/other workers has not recovered to 2019 levels. However, the prime-age EPOP among Black and AAPI workers has exceeded 2019 levels by 1.3 percentage points and 3.9 percentage points, respectively.

The recovery of the Black prime-age EPOP is an especially positive development given long-standing race-based disparities in labor market outcomes. The Black prime-age EPOP faced a slow recovery after the Great Recession but has reached an all-time high in the current recovery. This is likely the result of a tight labor market spurred by policy investments during the pandemic recession.

Figure E

Employment rates by gender

Little progress has been made to close the gap between the prime-age men’s and prime-age women’s rates of employment. The share of prime-age men in the Midwest with a job has consistently been at least 10 percentage points higher than that of women in the Midwest since 2007 (see Figure F).

A key reason for the gender gap in employment is our nation’s care economy crisis. Women bear the brunt of caregiving responsibilities, both paid and unpaid, both for children and other family members (Gould, Sawo, and Banerjee 2021). The lack of accessible and affordable care forces women to make impossible choices between unpaid care work at home and underpaid work in the formal economy. Investments in the care economy would create opportunities for high-quality jobs in care work and enable unpaid caregivers to enter the labor force.

Figure F

Employment rates at the intersection of race/ethnicity and gender

When considering the intersection of race and gender on prime-age employment in the Midwest, there is a clear clustering of white, Hispanic, and AAPI prime-age men exhibiting high EPOP rates (88%–90% in 2022), as seen in Figure G. Meanwhile, AIAN, multiracial, and other race/ethnicity men and women—as well as Black, Hispanic, and AAPI prime-age women—are employed at much lower rates (65%–75%). The prime-age EPOP for white women falls in between these two clusters (79%). While the prime-age EPOP for Black men has historically been low relative to white women, Black men’s prime-age EPOP in 2022 was equal to that of white women.

The intersection of gender and race/ethnicity disparities in caregiving work plays a role in the low prime-age EPOP rates among AAPI, Black, and Hispanic women. Women of all race/ethnicity groups spend more time providing unpaid care work at home, with Hispanic women spending the most time caregiving across all demographic groups (Gallagher, Robbins, and Mason 2023).

Figure G

Employment by industry

The employment recovery has been successful overall but varies by industry, and state and local government shortfalls persist

The pandemic’s initial effects on Midwest employment varied dramatically across different industries. As was the case nationwide, industries that involved face-to-face interactions—restaurants, retail, travel—were hit particularly hard. From February to April 2020, Midwest employment in leisure and hospitality was nearly cut in half (-48.9%)—a drop that was second only to the Northeast. Notably, Midwest employment losses over the same period in government and manufacturing were larger than in any other region, with losses of nearly 7% and 15%, respectively (Economic Policy Institute analysis of BLS-CES various years).

That said, throughout the country, total nonfarm employment (which includes most public- and private-sector workers) has recovered much faster in the current recovery than after the Great Recession. In the lead-up to the Great Recession, Midwest nonfarm employment peaked in January 2008 and did not return to that level until November 2014—81 months (nearly seven years) later (see Figure H). In contrast, before the pandemic recession, nonfarm employment peaked in February 2020, declined sharply, and recovered to pre-pandemic levels by February 2023—a span of 35 months, or just shy of three years. Federal pandemic relief, including loans to businesses to hire employees and stimulus payments to households that allowed workers to return to the labor market, strongly curtailed the Midwest’s period of low employment and created the conditions necessary for a quick recovery.

Figure H

The Midwest’s two largest industries by shares of overall employment are trade, transportation, and utilities and education and health. The five largest Midwest industries are listed in Figure I. (See Appendix Table 1 for employment levels in all industries in the Midwest.)

While total nonfarm employment in the region has now surpassed its pre-recession peak, not all industries have regained the jobs they lost. As shown in Figure I, state and local government faces a deficit of over 2.2% (nearly 100,000 jobs). Education and health faces a smaller but still substantial deficit of 0.3% (15,300 jobs). Trade, transportation, and utilities and professional business services have recovered (and exceeded) their pre-recession employment levels in the Midwest.

Smaller Midwest industries include construction, financial services, and leisure and hospitality. Construction has grown 5.0% since February 2020—the largest increase of any Midwest industry—and financial services has grown 0.6%. Meanwhile, leisure and hospitality remains 2.7% below February 2020 employment (Economic Policy Institute analysis of BLS-CES various years).

While the pandemic recovery has been uneven across industries, it has nevertheless been much faster than the recovery from the Great Recession. Figure J demonstrates this for three specific industries—manufacturing, leisure and hospitality, and state and local government. For example, after the pre–Great Recession business cycle peak, manufacturing still had not recovered 144 months later. After the pre-pandemic business cycle peak, manufacturing recovered within a span of 29 months.

Figure I

Figure J

State and local government employment shortfalls in the Midwest and across the country pose harm to workers and communities

The continued weakness in state and local government hiring is a serious problem for the Midwest and the country more broadly. From the start of the pandemic through 2021, employment in state and local public education—which represents the lion’s share of state and local government losses—fell by nearly 5% overall (Cooper and Martinez Hickey 2022). The dire conditions faced by public schools, public health systems, unemployment insurance offices, and other public agencies during the pandemic made clear how critical these public services are, particularly in times of social and economic distress.

In periods of weakened consumer demand, government spending is the primary tool to boost economic growth. This includes spending to support public-sector employment. In the decade following the Great Recession, policymakers in the Midwest largely chose to defund, rather than invest in, public-sector employment. This choice resulted in sluggish overall job growth, persistent high unemployment rates, and real median wages that barely budged (and even declined in several years).

At least in some cases, policies that have eroded public-sector collective bargaining rights have reduced real wages enough that state and local governments are facing soaring job vacancy rates, as workers opt for better-paying jobs in the private sector. A prime example is Wisconsin (Gunn 2023). The passage of Act 10 in 2011, which reduced union rights and limited the ability of local governments to raise public-sector pay, reduced worker wages and household incomes (Cooper 2018). Not only does Wisconsin have 8.5% fewer state and local government jobs than it did before the beginning of the Great Recession, but it is also having trouble filling vacancies for the jobs it still has (BLS-LAUS various years).

In the current economy, the public-sector employment shortfall has not been as pronounced; however, the longer it persists, the more harm it causes both workers and communities. Cuts in public-sector employment are particularly harmful to Black workers and women, who are disproportionately employed in the sector. State and local government has historically been a key source of family-sustaining middle-class jobs, particularly for workers of color (Cooper and Wolfe 2020).

Moreover, a depleted public-sector workforce means that state and local governments are less able to provide essential goods and services, such as public education, unemployment insurance, and other social safety net protections. Within the Midwest, eight states have state and local government employment deficits that exceed the U.S. average: Missouri, Nebraska, Illinois, Michigan, Kansas, Minnesota, Wisconsin, and Ohio (see Figure K).

Figure K

Wages

Low-wage workers have seen historic gains, but median-wage workers are faring worse than in any other region

Policy decisions to not raise minimum wages in six Midwestern states, laws preempting local governments from passing their own minimum wage increases, and legislation weakening unions have had a predictably deleterious effect on wages in the region. No region has seen slower wage growth over the past 15 years.

A significant bright spot of the current recovery—nationwide and in the Midwest—has been the largely unprecedented improvement in wages for the economy’s lowest-paid workers (discussed below). However, the state of typical worker wages in the Midwest is less encouraging. The Midwest fared the worst of any region on the recovery of median wages (the wages of workers in the middle of the wage distribution) in the wake of both the Great Recession and the more recent pandemic recession (see Figure L). Between 2007 and 2010, real (inflation-adjusted) median wages fell across the Midwest, while other regions saw increases in their median wages. Median wages in the Midwest did not start increasing again until 2015.

The Midwest has fared similarly poorly on real median wage growth in the current economic recovery. Between 2019 and 2022, real median wages increased only $0.08 (0.4%) in the Midwest, while the Northeast and West saw increases of over a dollar (5.7% and 4.7%, respectively). Relative to 2007, median wages have grown only 5.8% as of 2022, slower than any other region.{{3}}

Figure L

As a result of sluggish wage growth, wage levels in the Midwest lag almost every other region, faring only slightly better than the South—a region known for its low wages, limited worker protections, and hostility to unions (Henderson 2022). As seen in Figure M, in 2022 the median worker was paid $22.10 an hour in the Midwest, lower than the U.S. average of $22.88, and much lower than the median in the West ($24.01) and Northeast ($24.94).

Figure M

As shown in Figure N, the Midwest-to-U.S. median wage ratio—that is, the Midwest median wage relative to (divided by) the U.S. median wage—has been on a downward trajectory since 1979. Additionally, the relative median wage has declined more in the Midwest than in any other region—8.4% between 1979 and 2022.

In 1979, the typical worker in the Midwest earned 5.5% above the typical worker nationwide, bested only by the typical (median) worker in the West, who made 10.4% more than the national median worker. By 2007, after three decades of active hostility toward unions, trade policy that incentivized offshoring, and the erosion of various labor standards, the median worker in the Midwest was paid 1.5% less than the median worker nationwide.

Notably, this decline in the relative wages of typical Midwest workers persists today. In 2022, the median wage in the Midwest was 3.4% less than the national median—only slightly higher than the 6% lower median wage of workers in the South.

Figure N

Half of Midwestern states experienced median wage growth since 2019, but 10 states’ median wages are still lower than the national median

Within the Midwest, there has been significant variability in median wage growth over the past two economic downturns, so it is useful to examine state-by-state dynamics.

While the country and the Midwest region overall fared better in the recovery from the pandemic recession than in the recovery from the Great Recession, Ohio, Iowa, South Dakota, and Missouri fared worse, and Wisconsin’s wage growth was flat (see Figure O).

Between 2007 and 2010, in the wake of the Great Recession, median wages grew most significantly in North Dakota, South Dakota, and Nebraska, largely due to the fracking boom of the early aughts and its ripple effects in neighboring states (Rusyn 2015). Yet these gains appear to have been short-lived in North Dakota and South Dakota, where median wages barely grew (North Dakota) or even declined (South Dakota) over the last three years. As demand for, and prices of, natural gas have flattened, the job market (and thus wage growth) for these states has cooled (Rickman and Wang 2018). In Nebraska, wages increased from 2019 to 2022. Nonetheless, wages in these three states remain below the national median of $22.88.

Minnesota and Illinois were the only Midwestern states with median wages above the national median in 2022, and they are the only two Midwestern states with median wages that are consistently above the national median. In Minnesota, wages have been an average of nearly two dollars ($1.87) higher than the U.S. median over the past 15 years. In Illinois, median wages have been an average of $0.64 above the national median (see Appendix Table 2).

Figure O

Low-wage workers have seen strong gains in the current recovery, but 10th-percentile wages remain too low and the Midwest’s low-wage workforce remains large

Despite sluggish wage growth at the median, low-wage workers in the Midwest have seen large gains in the current recovery. The 10th-percentile wage—the value at which only 10% of workers are paid less and 90% of workers are paid more—has risen 8.6% since 2019. This is, by a wide margin, the fastest wage gain at the 10th percentile of any three-year business cycle since 1979 and an over-fivefold increase compared with the post–Great Recession recovery (see Figure P). These wage gains are largely the result of substantial federal spending bills passed in 2020 and 2021. These spending packages prevented a steep drop-off in economic demand, kept numerous businesses afloat, and fueled a tight job market, leading to an increase in wages for the lowest-paid workers across the whole country (Gould and deCourcy 2023).

Figure P

As shown in Figure Q, the “dot-com” bubble of the late 1990s and early 2000s was marked by a tight labor market and fast wage growth—at the time, the period of fastest wage growth since the 1950s. The bubble burst in 2000 and the U.S. economy entered a recession. However, wage growth at the 10th percentile continued to rise until 2002. This was due to composition effects (not for positive reasons): Low-wage workers disproportionately lose their jobs in economic downturns, so the resulting wage distribution skews upward.

In 2002, 10th-percentile wages in the Midwest were nearly identical to those in the Northeast and West (see Figure Q). However, in the decades that followed, the Midwest began to fall further behind the West and Northeast. This trend became particularly pronounced after 2010, when conservative lawmakers took power in many Midwestern states and began weakening—or failing to strengthen—labor standards.

As other regions more aggressively raised the minimum wage, Republican-controlled Midwestern states did not. Many instead adopted preemption laws preventing local jurisdictions from enacting higher minimum wages.

Every region, including the Midwest, has made significant progress on raising the wages of the lowest-paid workers over the past three decades. But despite gradual gains over time, the 10th-percentile wage—$12.45 in the Midwest in 2022—remains too low for workers to make ends meet in any part of the region (EPI 2022).

Figure Q

Another way to evaluate the progress made in improving pay for low-wage workers is to look at the share of the workforce earning less than $15 per hour. As shown in Figure R, there have been steep declines nationwide in the share of workers earning less than $15 an hour in the years since 2015. During this time, the Midwest’s share has been nearly halved (28.1% in 2015, 14.7% in 2022). This shows good progress for low-wage workers overall.

Over the last two decades, the Midwest has persistently had the second-highest share of workers earning less than $15 of any region, with only the South having a higher share (20.2% in 2022). The 14.7% share of the Midwestern workforce paid less than $15 an hour in 2022 amounts to nearly 4.5 million workers throughout the region. In three states, over half a million of the state’s workers are paid less than $15 an hour: Ohio (835,000), Illinois (720,000), and Michigan (671,000) (EPI analysis of BLS-CPS various years). In Ohio, Iowa, and Kansas, that amounts to 1 in 6 workers (Figure S).

Figure R

Figure S

Safety net and worker protections

Federal legislation during the pandemic greatly expanded unemployment benefits and introduced limited but important paid leave benefits. This federal intervention ran counter to the pre-pandemic trend in most Midwestern states to weaken unemployment insurance protection and prevent local governments from enacting paid leave provisions. In the wake of the pandemic, some Midwestern states are following the federal government’s lead and strengthening the safety net. However, many more are adopting policies that mark a return to pre-pandemic austerity.

The Midwest lags other regions on paid sick leave, both as an employer benefit and as a legal right

A common statistic used to understand paid sick leave access is the share of private-sector workers who report receiving paid sick days as an employer-provided benefit. In the Midwest, 72% of private-sector workers report having access to paid sick leave.

It is important to remember that in most states employer-provided paid sick days are a benefit that can be rescinded at any time (not a right), that they vary across employers, and that access to this benefit is vastly unequal. While 93% of the highest-wage workers had access to paid sick days in 2019, only 30% of the lowest-paid workers were able to earn sick days (Gould 2020). The COVID-19 pandemic exposed these inequities and the urgent need to enact a national paid sick leave policy (Gould 2022).

In the absence of federal action on paid sick leave, many states have enacted their own laws mandating that employers provide paid sick leave to their workers. However, Midwestern states have largely failed to enact guaranteed paid sick leave (in some cases actively opposing such policies), and the region lags in access as a result.

While the Midwest (and all regions) have improved considerably on employer-provided paid sick leave access over the past 15 years, the Midwest (72%) lags the West (89%), Northeast (82%), and national average (77%) (see Figure T). Increasing access to paid sick leave since 2007 has taken a nonlinear trajectory. Between 2007 and 2015, limited progress was made in expanding access to paid sick leave, but access rates actually declined nationally and in many regions between 2012 and 2014. In 2015, the Obama administration called on states (White House 2015) to increase access to paid sick leave and later signed an executive order granting federal contract workers access to paid sick leave (DOL-WHD 2015). Rates of access increased in most Census Divisions through 2020 and have leveled off as of 2022.{{4}}

Paid sick leave access is highest in the West, home to California, Oregon, and Washington. California passed paid sick leave in 2014, followed by Oregon in 2015 and Washington in 2016. Most of the Northeast states—except Pennsylvania and New Hampshire—also have paid sick leave policies in place.

Unlike in the West and Northeast, state legislatures in the Midwest have largely failed to enact statewide measures guaranteeing access to paid sick leave. In the absence of statewide measures, localities have attempted to pass their own paid sick leave measures, but state legislatures have used preemption to block these measures from taking effect. The ability of Midwest localities to require employers to provide paid sick days has been preempted in six Midwest states: Wisconsin in 2011, followed by Indiana in 2013; Michigan, Iowa, and Missouri in 2015; and Ohio in 2016 (Wolfe et al. 2021).

Of the 12 states that make up the Midwest, only two have passed statewide paid sick leave laws—Michigan in 2018 and Minnesota in 2023. In the wake of the COVID-19 pandemic, Minnesota lawmakers enacted a law that mandates employers to provide workers with one hour of paid sick time for every 30 hours worked (six sick days per year for full-time workers). The law covers employers of all size and will benefit as many as 900,000 part-time and full-time workers in the state (Ferguson 2023). In contrast, Michigan’s paid sick leave law, as adopted, excludes a large share of the state’s workforce (Ruark 2018) and remains embroiled in legal challenges—as a result, the state effectively has no paid sick leave policy as of this publication (Miller 2023).

While paid sick leave is important for short-term absences, it is ill-suited for longer family and health-related absences. Access to paid family and medical leave (PFML) is critical for such circumstances; however, access to PFML is even less common than access to paid sick leave (Gould-Werth 2022). In the absence of a federal paid family and medical leave program, many states have implemented their own programs mandating paid time off for workers to care for a new child, care for a sick family member, or take care of their own serious illness. However, the Midwest has been similarly slow to enact paid family and medical leave or has actively preempted it. Minnesota is the only state in the region to have enacted such a program. Minnesota’s paid family and medical leave law was approved in May 2023 and will go into effect in 2026 (Weston Williamson 2023).

Figure T

Midwestern lawmakers must strengthen unemployment insurance systems to support workers and sustain progress on its unemployment rate

Federal legislation passed during the first year of the pandemic both expanded eligibility for and the generosity of unemployment benefits. The quick jobs recovery, in the Midwest and elsewhere, served as a powerful refutation of the harmful argument that adequate unemployment benefits lead to people being “too lazy” to work (Martinez Hickey and Cooper 2021). A strong and robust unemployment insurance system is a vital tool in navigating economic downturns.

However, harmful legislation to reduce the generosity of unemployment benefits threatens to undo the Midwest’s progress on unemployment. While the standard unemployment benefit in most states is 26 weeks, four Midwestern states provide unemployment recipients with fewer than 26 weeks of benefits (CBPP 2023): Iowa and Kansas (16 weeks), Missouri and Michigan (20 weeks). In Missouri, 20 weeks of benefits are available only when the unemployment rate exceeds 9%. If the unemployment rate is below 6%, the maximum number of weeks is 13. The South is the only region where more states (7 states) provide fewer than 26 weeks of benefits. Two Midwestern states—Iowa and Wisconsin—are among the four states (the other two being Kentucky and Louisiana) that passed laws limiting unemployment benefits in 2022 (Gwyn 2022). The Iowa law cuts the number of weeks recipients can claim benefits from 26 to 16 and forces UI claimants to accept a job that pays lower wages than their previous job. The Wisconsin law would have reduced the number of weeks from 26 to 14, depending on the state’s unemployment rate, but Governor Tony Evers vetoed the legislation.

In 2023, Iowa lawmakers introduced another bill restricting access to UI by increasing the number of work searches claimants need to conduct in order to remain eligible for benefits, as well as lowering the weekly benefit rates for unemployed Iowans with three or more dependents (Iowa Legislature 2023). Missouri lawmakers introduced a bill that reduces the state’s maximum benefit duration further—from 20 weeks to eight weeks if the state unemployment rate is below 3.5% (Missouri Legislature 2023), even if unemployment exceeds this rate in some areas of the state (Missouri Budget Project 2023). Bills to restrict access to unemployment insurance were also introduced in Ohio (SB 116) and Wisconsin (SB 233). (See Ohio Legislature 2023; Wisconsin State Legislature 2023.) Each of these bills received lobbying support from the Opportunity Solutions Project, the lobbying arm of the Foundation for Government Accountability, a right-wing think tank working across the country to deregulate employment and shrink the public sector (Bogage and Paúl 2023).

However, not all Midwestern states are seeking to weaken their unemployment insurance systems; some are instead expanding unemployment benefits. In Minnesota, the state legislature recently passed a bill to extend eligibility of unemployment benefits to public school support staff during the summer months. Illinois passed a similar bill in 2020. These benefits are a lifeline to school employees, who are disproportionately women and workers of color, paid low wages, and—until recently—forced to go months without pay or unemployment benefits (Wolfe and Kamper 2021).

Instead of making unemployment insurance benefits less generous and more difficult for unemployed workers to access, the Midwest should follow the lead of states like Minnesota and Illinois. This would benefit both workers and the macroeconomy of the region.

Poverty

To assess economic well-being following the Great Recession, we rely on the official poverty measure (OPM) published by the U.S. Census Bureau. When looking at the recovery from the pandemic recession, we expand our analysis to also use the supplemental poverty measure (SPM), which became available in 2011 after the Great Recession.

Poverty is the result of policy choices

Federal- and state-level policies can help lessen the impact that economic shocks and contractions have on the well-being of millions across the country and in the Midwest. A weak policy response to the Great Recession contributed to a large and prolonged increase in the official poverty rate in the Midwest in the years that followed.

In the wake of the pandemic recession, the official poverty rate rose only slightly. The more interesting narrative, though, is found in looking at the supplemental poverty rates. A strong policy response to the pandemic and its economic aftermath—including federal aid to state and local governments—meant that supplemental poverty rates actually declined in its wake. However, a return to the pre-pandemic status quo in 2022 led to a significant increase in supplemental poverty, as seen in recently released poverty data from the Census Bureau.

Official poverty grew and persisted after the Great Recession amid a weak policy response 

Official poverty estimates in the Midwest have trended below—but tracked with—the national poverty rate since 2007 (see Figure U). The Great Recession and the weak policy response that followed (Bivens 2019) led to a relatively large increase in poverty in the Midwest, tracking with an increase nationwide. The share of individuals who struggle to make ends meet below the official poverty line increased by 2.5 percentage points nationally from 2007 to 2011, rising from 12.5% to 15%. In the Midwest, the poverty rate increased by 2.9 percentage points during the same period, rising from 11.1% in 2007 to 14% in 2011.

Figure U

Some states in the Midwest were hit particularly hard by the Great Recession and the anemic policy response. Between 2009 and 2011, the average poverty rate in Indiana, Michigan, and Missouri was higher than the national average of 14.8% (see Table 3).

The misguided focus on austerity measures after the Great Recession prolonged the financial hardship of economically vulnerable Americans. Poverty was slow to recover from the Great Recession across the United States, but it was even slower to recover in the Midwest. At the national level, official poverty did not recover to its pre-recession rate until 2017, nearly a decade later. It took the region of the Midwest an additional year, until 2018, to recover its pre-recession rate (Figure U). Between 2015 and 2017, the majority of states in the region still had higher official poverty rates than a decade prior, between 2005 and 2007 (Table 3).

Table 3

Supplemental poverty declined quickly after the pandemic recession due to a bold policy response

Low-income Americans were able to weather the economic impact of the pandemic with more resilience than during and following the Great Recession. This was due in large part to the strong policy response of the federal government. This bold policy response included economic relief measures, such as stimulus payments; the temporary expansion of programs like unemployment insurance; the temporary expansion of refundable tax credits, such as the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC); and increased federal assistance to state and local governments. In concrete terms, these policies prevented millions of Americans from falling below the supplemental poverty line.

Despite a larger contraction in economic activity and employment relative to the Great Recession, the COVID-19 pandemic recession led to only a relatively marginal increase in the official poverty rate. At the national level, the poverty rate rose by just over one percentage point from 10.5% in 2019 to about 11.6% in 2021. In the Midwest, the prevalence of poverty remained statistically unchanged, increasing by less than one percentage point from 9.7% in 2019 to 10.4% in 2021.

Due in large part to economic relief measures enacted in the wake of the pandemic, such as economic impact/stimulus payments and the expansion of the Child Tax Credit, the supplemental poverty rate was considerably lower than the official poverty rate at the national level and in the Midwest region between 2019 and 2021. During this three-year period, the official poverty rate stood at 11.2% at the national level and averaged about 9.6% for states in the Midwest. The supplemental poverty rate was lower than the official poverty rate by about 1.6 percentage points at the national level (9.6% vs. 11.2%) and by 2.9 percentage points for the Midwest region (6.7% vs. 9.6%) between 2019 and 2021.

During this three-year period, all states in the Midwest reflected a lower supplemental poverty rate than official poverty rate as economic relief measures enacted after the pandemic helped families avoid economic deprivation during a time of uncertainty (see Table 4). The state of Ohio recorded the highest share of individuals below the official and supplemental poverty lines between 2019 and 2021, at 12.2% and 8.1%, respectively.

Table 4

Annual estimates of poverty at both the national and regional levels show that supplemental poverty fell between 2020 and 2021. During this period, the share of Americans below the supplemental poverty line declined nationally by about 1.4 percentage points, from 9.2% in 2020 to 7.8% in 2021. Similarly, the Midwest experienced a decline in supplemental poverty of about one percentage point during the same period, from 6.7% in 2020 to 5.6% in 2021. Both declines in poverty, in the Midwest and at the national level, during this period were statistically significant.

The impact of economic relief measures during the pandemic is reflected in the drop of the supplemental poverty rate in the region between 2020 and 2021. While the supplemental poverty rate in the Midwest declined during this period, the official poverty rate remained nearly unchanged, increasing from 10.1% in 2020 to 10.4% in 2021. In 2021 alone, the supplemental poverty rate for the Midwest region (5.6%) was just over half of the official poverty rate (10.4%), reflecting that more than 2.5 million Americans in the Midwest were kept out of poverty largely because of government support via transfers and social protection programs.{{5}}

The end of key economic relief measures that helped families weather the shock of the pandemic pushed millions into poverty in 2022 (Cid-Martinez and Zipperer 2023). The Midwest was not immune to the rise in poverty: The number of people in the region who fell below the poverty line increased by more than 2 million in 2022. This change reflected a rise in the supplemental poverty rate of more than 3 percentage points, from 5.6% in 2021 to 9.1% in 2022.

In 2023, state and local governments in the Midwest have an opportunity to use additional funds from the American Recue Plan to keep additional people from falling into poverty and to ensure that all families in the region are being reached by public policy (Kamper 2022b).

Unions and collective bargaining

The Midwest has historically been one of the centers of the American labor movement. The international workers’ holiday—May Day—started in Chicago in 1886, as part of a campaign in support of the eight-hour workday (Banerjee, Sherer, and Kamper 2022). The seminal moment in the labor upsurge of the 1930s was the Flint sit-down strike in Michigan (Guerrero 2017). The first statewide law for public-sector collective bargaining was passed in Wisconsin in 1959 (Nack 2019).

However, despite its history, the Midwest’s union strength has been declining precipitously. Anti-union policies enacted by many Midwestern states in the 2010s have contributed to increasing inequality and wage stagnation and have caused Midwestern unionization rates to fall faster than anywhere else in the country since the beginning of the Great Recession.

As a result of anti-union policies, the Midwest’s union density has declined over time, leading to growing inequality

Throughout the 1950s, 1960s, and 1970s, the Midwest had the highest union density of any region in the country. In 1979 it was nearly 30% and almost 5 percentage points higher than the national average.

However, union membership across the country has declined precipitously over the past 40 years, including in the Midwest. By 2022, the Midwest’s union membership rate had fallen to just 11%—less than a percentage point above the 10.1% union membership rate nationwide (see Figure V). In 1979, four Midwestern states (Illinois, Ohio, Michigan, and Wisconsin), were among the top 10 states in the country for union membership (Hirsch, MacPherson, and Vroman 2001). Today, as shown in Table 5, only Minnesota is in the top 10 (Unionstats.com 2023).

Figure V

Table 5

Research shows that unions reduce income inequality across the economy (Banerjee et al. 2021), counteract racial and gender labor market inequities (EPI 2021), and reduce public-sector pay gaps (Morrissey and Sherer 2022). In decades when union density was higher, there was less income inequality (measured by looking at the share of income going to the top 10%) than there is today. As unionization rates have declined—particularly after 1979—income inequality has worsened. Though not the sole reason for the growth in inequality, the decline in workers’ ability to collectively negotiate for higher pay and other equity-minded policy changes has allowed businesses, corporate executives, and other wealthy interests to capture a larger share of the country’s income.

This national trend is also visible in the Midwest region, where declining unionization rates have been accompanied by a rising share of income accruing to the top 10%. Figure W shows that precipitous declines in the Midwest’s union membership rate since 1979—from 28.9% to 11.0%—were accompanied by a stark increase in income inequality, with the share of income going to the top 10% growing from one-third to nearly half of all income in the region in 2018.

Figure W

Midwestern lawmakers must reverse anti-union policies to advance worker rights

There is nothing natural about the decline in unionization rates in the Midwest and across the country. Instead, this trend is the result of relentless attacks on unions by conservative lawmakers and their corporate allies seeking to maintain political control by undermining worker power (Lichtenstein 2002; Lafer 2017; Grumbach 2022). As a result of federal rulings eroding the rights of unions, the proliferation of so-called right-to-work laws at the state level, and increasingly aggressive anti-union tactics by employers, it has become increasingly difficult for workers to form and join unions—even though support for unions is at an all-time high (Mishel, Rhinehart, and Windham 2020).

But this trend can be reversed, and there is reason to believe the Midwest can lead the way. Over the course of the past decade, Midwest voters, when given the chance, have strongly supported workers’ rights to collective bargaining. In 2011, Ohioans voted 61–39 to overturn Ohio Senate Bill 5, which sought to weaken public-sector collective bargaining rights in a manner similar to Wisconsin’s Act 10 earlier that year (Fields 2011; Policy Matters Ohio 2011). In 2018, voters in Missouri overturned the state legislature’s passage of an RTW law by a 2:1 margin (Neuman 2018).

More recently, in November 2022, Illinois voters approved a constitutional amendment guaranteeing all workers organizing and collective bargaining rights (Sherer 2022). After Midwest voters elected Democratic trifectas in Minnesota and Michigan, Michigan became the first state in decades to repeal its harmful RTW statute. And recently passed industrial policy legislation—including the CHIPs and Science Act, the Infrastructure Investment and Jobs Act (IIJA), and the Inflation Reduction Act (IRA)—represent a historic opportunity to create well-paid union jobs in manufacturing, transportation, utilities, and other industries through project labor agreements, prevailing wage standards, and registered apprenticeship requirements.

Midwestern lawmakers must act to sustain pandemic recovery progress and work toward a more equitable future

The federal response to the Great Recession was marked by extreme austerity at the federal level, forcing states to address the recession’s impacts largely on their own. States diverged in their responses. For its part, the Midwest responded to the Great Recession with a shift toward austerity, and states in the region elected leaders (particularly governors) committed to that agenda. Midwestern states severely cut public employment, which hindered overall economic growth. Their mistake was to lean into austerity, prolonging economic recovery and ushering in a set of economic policies that harmed workers and their families.

Today, state policymakers face a different challenge and are on the verge of making a different mistake: failing to use historic federal investments to support workers through higher wages and benefits, boost public-sector employment, and address our broken care economy. As a result of significant federal pandemic stimulus funding and $350 billion allotted to states to spur economic recovery through the American Rescue Plan Act, the Midwest was able to avoid a prolonged and painful economic recession. On many indicators, the region has even exceeded pre-pandemic levels of economic health.

Yet states in the Midwest have yet to spend 60% of their ARPA fiscal recovery funds, leaving more than $33 billion on the table that could be used to address persistent poverty and inequality and buffer their states against future economic downturns (Treasury Department 2023). In addition, the passage of the Bipartisan Infrastructure Law, the CHIPs and Science Act, and the Inflation Reduction Act in the past two years offer substantial opportunities to create well-paid union jobs with billions of dollars in federal subsidies and investments, if policymakers embrace the opportunity (Hersh 2022).

It’s clear that austerity failed to promote economic recovery in the Midwest and around the country following the Great Recession. In the current economic recovery, Midwest policymakers have the opportunity to choose a different path. But as federal investments begin to phase out, time is running short. Midwest policymakers must act now to maximize the impact of federal relief funds by restoring the public sector, investing in workers, and building a care infrastructure that supports health and well-being for all who live there.

Appendix

Appendix Figure A

Appendix Table 1

Appendix Table 2

Notes

{{1.}} In this report, Midwest, Northeast, South, and West refer to the four geographic regions of the United States as defined by the U.S. Census Bureau. The 12 states of the Midwest region are Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin.

{{2.}} AAPI stands for Asian American and Pacific Islander, and AIAN stands for American Indian and Alaska Native.

{{3.}} Economic Policy Institute analysis of Current Population Survey Outgoing Rotation Group microdata.

{{4.}} Census Divisions, as defined by the U.S. Census Bureau, are geographic entities between the state and Census Region level. The West Census Region comprises the Pacific and Mountain Census Divisions. The Midwest comprises the West North Central and East North Central Census Divisions. The South Census Region comprises the West South Central, East South Central, and South Atlantic Census Divisions. The Northeast Census Region comprises the Middle Atlantic and New England Census Divisions.

{{5.}} Estimate is based on the difference between the lower bound confidence interval for the official poverty measure and the upper bound confidence interval for the supplemental poverty measure.

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Key findings

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

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

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

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

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

Introduction

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

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

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

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

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

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

What’s in this report

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

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

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

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

Preemption in the Midwest is tied to segregation

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

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

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

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

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

Government and businesses acted to segregate neighborhoods

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

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

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

The real estate industry advanced segregation

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

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

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

Lawmakers codified segregation—and cemented the resulting inequities

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Declining investment in public services in the Midwest

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

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

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

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

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

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

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

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

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

Increased privatization

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

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

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

Water systems

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

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

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

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

Education

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

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

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

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

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

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

Organized labor’s decline

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

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

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

A brief history

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

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

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

So-called right-to-work laws undermine unions

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

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

Employer tactics undermine unions

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

Figure A

Implications for racial justice and equity

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

Case studies

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

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

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

Minimum wage: St. Louis and Kansas City, Missouri

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

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

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

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

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

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

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

Missouri state lawmakers acted to preempt local minimum wages

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

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

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

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

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

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

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

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

Table 1

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

Table 2

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

Missouri voters advocated for workers

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

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

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

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

Five Iowa counties took action to raise their minimum wages

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

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

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

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

Table 3

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

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

Iowa state lawmakers halted the minimum wage momentum

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

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

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

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

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

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

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

Fair scheduling: Detroit, Michigan

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

Michigan’s state legislature took a particularly aggressive approach when they passed a sweeping anti-worker preemption bill in 2015.{{7}} Known by its opponents as the “Death Star Bill” for its complete destruction of local authority, this bill preempted local governments from enacting a broad slate of pro-worker policies. It targeted regulations that would benefit low-income workers and workers of color, such as minimum wages, fair chance hiring or “ban-the-box” laws, and mandated employee benefits such as paid leave. The legislature took clear aim at workers by including measures against union organizing, strikes, wage disputes, and apprenticeships in the list of prohibited local policies.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Table 4

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

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

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

Paid sick leave: Indianapolis, Indiana

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

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

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

Status of paid sick leave laws in the Midwest

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

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

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

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

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

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

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

Table 5

This bill was not the first time Indiana lawmakers prevented progress on workers’ rights issues, nor was it the last. They had already, in 2011, forbidden local governments from establishing their own minimum wages.{{10}} Prevailing wage and ride-share standard preemption followed in 2015.{{11}} The state legislature also preempted fair scheduling requirements in 2016, one year after the Indianapolis City Council adopted a nonbinding resolution supporting a Retail Workers Bill of Rights calling for fair scheduling along with better pay and benefits (Eason 2016).{{12}}

Indiana’s state legislature is not demographically representative of Indianapolis

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

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

Targeted and local hire laws: Cleveland, Ohio

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

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

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

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

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

Ohio General Assembly passed law forbidding local hire laws

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

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

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

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

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

Figure B

Prevailing wage: Kansas City, Kansas

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

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

How prevailing wage laws protect workers—and benefit taxpayers

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

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

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

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

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

How Kansas’s preemption of prevailing wage hurt workers

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

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

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

Table 6

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

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

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

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

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

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

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

Some Kansas state legislators are pushing back

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

Labor peace agreements: Milwaukee, Wisconsin

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

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

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

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

Why Wisconsin workers need labor peace agreements

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

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

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

Figure C

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

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

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

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

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

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

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

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

Milwaukee workers could particularly benefit from LPAs

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

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

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

Collective bargaining over employment conditions: Chicago, Illinois

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

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

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

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

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

Figure D

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

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

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

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

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

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

April 2021: The preemption law was reversed

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

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

Rent control: Chicago, Illinois

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

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

The spread of rent control preemption across the states

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

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

Effects of Illinois’s 1997 rent control preemption bill

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

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

Housing policy and racial justice

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

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

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

Figure E

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

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

How rent control policies can help

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

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

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

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

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

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

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

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

Preemption repeal introduced

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

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

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

Preemption and the pandemic

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

How the COVID crisis has disproportionately harmed communities of color

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Blocking mask mandates

• Nebraska’s governor threatened to withhold federal aid from local governments that imposed mask mandates and other public health standards (Haddow 2021).
• In August 2021, Missouri’s attorney general sued Columbia Public School and its board of education over the district’s mask mandate (McKinney 2021).
• Iowa’s state legislature also imposed a ban on school district mask mandates in May 2021.{{29}}

Divesting local public health authorities of their power

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

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

Conclusion

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

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

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

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

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

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

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

Acknowledgments

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

Appendix tables

Appendix Table 1

Appendix Table 2

Appendix Table 3

Appendix Table 4

Appendix Table 5

Appendix Table 6

Appendix Table 7

Appendix Table 8

Notes

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

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

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

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

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

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

{{7.}} MCL 123.1381–123.1396.

{{8.}} 2020-SB-0960.

{{9.}} Ind. Code § 22-2-16-3.

{{10.}} Ind. Code § 22-2-2-10.5.

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

{{12.}} Ind. Code §§ 22-2-16-3.

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

{{14.}} Ohio Rev. Code 9.75.

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

{{16.}} Ohio Rev. Code § 4111.02.

{{17.}} K.S.A. § 16-2003.

{{18.}} K.S.A. § 12-16,130.

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

{{20.}} KS HB 2305.

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

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

{{23.}} 115 ILCS 5/.

{{24.}} 50 ILCS 825/.

{{25.}} OR SB 608.

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

{{27.}} IL HB 0116.

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

{{29.}} IA HF 847.

{{30.}} KS SB 40.

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

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

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Key takeaways

• The American Rescue Plan Act (ARPA) allocated $195 billion in fiscal recovery funds directly to states. 
• One of the key uses of the funds was for premium pay for front-line workers impacted by the pandemic, which would disproportionately benefit Black and Brown workers and women.
• However, only two Midwestern states—Michigan and Minnesota—are using American Rescue Plan funding to provide premium pay (also called “hazard pay”) for low-wage essential workers. 
• This breaks down to just 2% of funds allocated to Midwestern states being used for premium pay. Essential workers deserve better. 

The American Rescue Plan Act (ARPA) presents a historic opportunity for state and local governments to shape their region’s economic recovery and also address the long-standing inequities that the pandemic continues to expose and worsen. One straightforward way that ARPA money could be used to combat these inequities is boosting the wages of the disproportionately Black and Brown workers and women who have been on the front lines of the public health and economic crisis. However, few Midwestern states have opted to do so; data on states’ allocation of ARPA funds thus far show few resources being put towards premium pay.

ARPA allocated $195 billion in fiscal recovery funds directly to states, with billions more also directed to counties, cities, tribal governments, and other units of local government. Interim rules developed by the Department of the Treasury designate four allowed uses for ARPA funds: including investments for infrastructure; assistance to households, small businesses, and nonprofits, and industries impacted; propping up state government services impacted by tax shortfalls; and premium pay.

Among the four uses, premium pay in particular would help lift up marginalized workers impacted by the pandemic. Premium pay” (also sometimes called hazard pay, even sometimes called “hero pay” by businesses) for workers “in critical infrastructure sectors who regularly perform in-person work, interact with others at work, or physically handle items handled by others.” This includes jobs in child care, health care, grocery stores, meat processing, transportation, and public health.

State and local governments also have additional flexibility to determine what is considered essential work and are encouraged to prioritize low-wage workers. States may provide premium pay of up to an additional $13 per hour in addition to the compensation they already receive, without exceeding $25,000 per eligible worker.

Premium pay is available under ARPA only to front-line workers who couldn’t work remotely and who faced “heightened risks due to the character of their work.” EPI research shows Black and Latinx workers are least likely to be able to work remotely and that Black workers and Latinx workers, especially Latinx women, have also experienced severe job losses during the public health and economic crisis due to their representation in industries categorized as essential work.

In health care, the largest front-line sector, women account for 76% of workers, yet are typically paid $5.12 less per hour than men in the sector. In the second-largest front-line sector—food and agriculture—half the workers are people of color. Sadly, due to the historic and ongoing influence of structural racism in the sector, food and agriculture also has the lowest-paid workers, with a median hourly wage in 2019 of $13.12 an hour.

For this aid to address the most inequities in wages and employment, it should be “targeted to the most vulnerable households and individuals.” The federal rules specify that premium pay should “prioritize compensation of those lower income eligible workers that perform essential work” [emphasis added]. A survey EPI commissioned in the late spring of 2020 found that only 30% of people working outside the home were receiving any kind of premium pay. By the fall of 2020, most large employers had ended premium pay, and while many states created premium pay programs using funding provided by the CARES Act, most of those ended in 2020. Two-thirds of low-wage workers don’t have paid sick days, even though the COVID-19 pandemic is still responsible for more than 2,000 American deaths every single day. 

States in the Midwest are in a good position to offer premium pay if they want to. In addition to the billions in ARPA funds, the fiscal situation of Midwestern states is quite good; all Midwestern states ended Fiscal Year 2021 with a positive balance sheet, and nine of 12 Midwestern states saw revenues grow faster than the national median in 2021.

One objective of ARPA is to help states restore their lost revenue, and that purpose is largely being achieved with only a fraction of ARPA dollars. Much more is needed to address other critical objectives for ARPA dollars such as “supporting immediate economic stabilization for households” and “addressing systemic public and economic challenges that have contributed to the unequal impact of the pandemic.” And there is a particular need for premium pay in the region: Prior to the pandemic, median wages for Midwestern workers were “lower than those in any other census region.”

Despite the need for premium pay for essential workers in the Midwest, and despite the funds sufficient through ARPA to provide premium pay, we show below that most states aren’t providing any. And at least one state—Indiana—is using premium pay resources solely to increase policing and incarceration budgets without providing any relief to workers in the low-wage sectors discussed above.

Illinois: None.

Gave 24,000 essential state workers a 12% pay raise in 2020, but nothing with ARPA funds.

Indiana: A total of $10,500,000, for capitol police, state police, and Department of Corrections officers and employees who performed the work of Corrections.

Iowa: None.

Kansas: None.

Michigan: Made permanent a $2.35/hour raise, totaling $460 million, for direct care workers who work either in homes or in nursing care facilities. However, this covers only “registered professional nurse, licensed practical nurse, competency-evaluated nursing assistant, and respiratory therapist” occupations, and therefore excludes many essential workers in nursing homes, such as nutritionists, custodial employees, and physical therapists.

Minnesota: Approved $250 million in bonus pay, with eligible recipients and amounts to be determined by a joint executive-legislative working group. The group was supposed to have recommendations completed by September 7 but has missed that deadline. One of the working group’s members, State Senator Erin Murphy, has called for making more than $250 million available.

Missouri: None.

Missouri provided $73 million in premium pay to more than 18,000 state employees in fiscal year 2021, using CARES Act money, but has not allocated any additional premium pay from ARPA funds.

Nebraska: None.

North Dakota: None.

Ohio: None.

South Dakota: None.

Wisconsin: None.

These states, in total, will receive $36 billion in ARPA funds. The $720.5 million allocated to hazard pay for essential workers constitutes around 2% of the available monies.

There is still time for Midwestern states to properly compensate low-wage essential workers for the risks they have and continue to face during the pandemic. Premium pay can be made retroactive dating back to the beginning of the pandemic emergency, so there is still time to assist workers who have not received compensation. Nine of the 12 states haven’t spent even half their allocated ARPA funds yet.

We have maintained since ARPA passed that the time to spend those funds is now, not only to keep the economic recovery moving, but also to assist low-wage workers and their families in building back a better economy than the one we had going into 2020. ARPA funds offer a critical opportunity to support workers on the front lines while also addressing long-standing racial and gender inequities workers experience. Premium pay for these workers is one step toward reducing these long-standing inequities and making sure that every job is a good job.