States of the unions

As wages rise with union strength in Minnesota and Illinois, study finds Wisconsin lags behind

Steelworkers at the U.S. Steel Granite City Works. (One Illinois/Ted Cox)

Steelworkers at the U.S. Steel Granite City Works. (One Illinois/Ted Cox)

By Ted Cox

Wages are higher in Minnesota and Illinois than they are in Wisconsin, thanks in part to the strength unions enjoy in those states, according to a series of new studies on union membership in the Midwest.

“While the rise of right-to-work laws and other national economic trends are no doubt impacting unionization and wage growth, differences in state-level policymaking can either accelerate or blunt these broader trends,” said Frank Manzo IV, of the Midwest Economic Policy Institute. “Wisconsin, Illinois, and Minnesota have each chosen distinct paths, and the data show that the Wisconsin model has produced the lowest wages and stagnant wage growth.”

The annual “State of the Unions” research series examines unionization rates and hourly wages in Illinois, Minnesota, and Wisconsin. Released Wednesday, it was produced by the Midwest Economic Policy Institute with researchers from the University of Illinois at Urbana-Champaign, University of Minnesota, University of Wisconsin-Madison, and University of California-Irvine.

The overall study found that, over a 10-year period from 2008 through 2017, inflation-adjusted hourly wages rose from $24.07 to $26.61 in Minnesota, from $23.75 to $25.77 in Illinois, and from $21.77 to $22.95 in Wisconsin. The Badger State’s 5 percent increase was closest to the national average of 6 percent, as U.S. wages rose over the same period from $23.53 to $24.96, but Illinois and Minnesota both outpaced that, with wage increases of 8 and 11 percent, respectively.

The study credited Minnesota’s sustained support for unions and its prevailing wage laws, including an increase in the state minimum wage. By contrast, Wisconsin imposed state budget austerity measures and undercut union support through a so-called right-to-work law. Illinois found itself in the middle, as Gov. Bruce Rauner tried to impose the same sort of austerity measures as his Wisconsin counterpart Scott Walker, but was thwarted by the General Assembly.

As Manzo found earlier this year in an Illinois Economic Policy Institute report on union membership and the Janus case, unions serve to prop up competitive wages even in areas of the private sector where they’re are not as strong.

According to the studies, the U.S. average hourly wage for union workers is $28.70 an hour, $24.51 for nonunion workers. In Minnesota, union workers average $29.44, nonunion workers $26.10, both above the national averages. In Illinois, union workers actually make just under the national average, at $28.17, but nonunion workers actually make more than the national average, $25.34. In Wisconsin, union workers lagged 9 percent behind their union counterparts nationwide, at $26.07, while nonunion workers made 8 percent less than their U.S. counterparts, $22.67.

“On the core issue of boosting worker paychecks, Minnesota has largely bucked national and regional trends by resisting austerity, embracing minimum labor standards, and supporting collective bargaining,” said Professor Robert Bruno, co-author of all three studies and director of the Project for Middle Class Renewal at the University of Illinois at Urbana-Champaign. “This is a very different approach than we’ve seen in Wisconsin, yielding significantly better wage outcomes for both union and nonunion workers alike. A rising tide lifts all boats.”

Wisconsin, Illinois, and Minnesota have each chosen distinct paths, and the data show that the Wisconsin model has produced the lowest wages and stagnant wage growth.
— Frank Manzo IV of the Midwest Economic Policy Institute

The studies emphasized that unions have been on the defensive across the nation. Unions lost almost 1.3 million members over the last 10 years, with the unionization rate dropping from 12.4 percent of the workforce to 10.7 percent. Even Minnesota saw its union rate drop from 16.1 to 15.2 percent, but with its growing economy union membership actually increased from 392,000 to 411,000. Illinois lost 111,000 union members as its rate dropped from 16.6 to 15 percent, but in Wisconsin union membership plummeted from 15 to 8.3 percent, a loss of 165,000 members.

The studies found that unions serve to benefit minority workers including women and people of color, and that in Illinois union membership was exceptionally strong among military veterans: 28 percent.

“Strong unions provide a ladder into the middle class for workers from historically disadvantaged populations,” Manzo said. “By enacting policies that weaken unions, the data suggest that changes to Wisconsin’s labor laws have had a disproportionately negative effect on women, veterans, and people of color when compared against these neighboring states and the nation as a whole.”

As for Illinois, while the state lost more than 100,000 union members over the decade, the study found that the rate of union membership actually increased in the last year, from 14.5 to 15 percent, with 10,000 more workers enrolled in unions. That increase was driven by millennials and Chicago-area workers. Public-sector workers were a source of strength, with more than half of government workers in Chicago and statewide belonging to a union. By contrast, only about a third of public workers nationwide belong to a union. In the private sector, just under 10 percent of Illinois workers were unionized, but that still topped the national average of 6.5 percent.

According to the study: “Employment in the public sector, construction, transportation and utilities, mining, educational and health services, and public administration industries all raise the chances that a given worker is a union member. African-American workers are also statistically more likely to be union members than their racial or ethnic counterparts. On the other hand, workers employed in professional and related occupations, management, business, and financial occupations, workers employed in sales occupations, and financial occupations are less likely to be unionized.”

In the face of anti-union policies, studies have found that public support for unions is actually on the upswing.

“Nationally, while public policy and court decisions appear to be moving towards the stagnant wage and lower unionization model of Wisconsin, the comparative experience of Minnesota and Illinois proves that there are steps that state policymakers can take to minimize the damage,” Bruno concluded.  “With the favorability of unions now polling at their highest levels in more than 15 years, these steps should not just be seen as good politics, but as sound economic policy.”