Idaho- The Right to Work for Low Wages

epi-20110405-rtw-wagesbenefits

The lie told to Idaho voters in 1987 is that Right to Work legislation would increase compensation and improve the economy. The facts tell the opposite story. The 23 Right to Work states lag behind the rest of the nation in both wages and benefits. For example, Elise Gould and Heidi Shierholz, researchers at the Economic Policy Institute (EPI) looked at the evidence:

[O]ur findings — that “right-to-work” laws are associated with significantly lower wages and reduced chances of receiving employer-sponsored health insurance and pensions — are based on the most rigorous statistical analysis currently possible. These findings should discourage right-to-work policy initiatives. The fact is, while RTW legislation misleadingly sounds like a positive change in this weak economy, in reality the opportunity it gives workers is only that to work for lower wages and fewer benefits. For legislators dedicated to making policy on the basis of economic fact rather than ideological passion, our findings indicate that, contrary to the rhetoric of RTW proponents, the data show that workers in “right-to-work” states have lower compensation — both union and nonunion workers alike.

Economist Gordon Lafer provides the numbers.

RTW laws lower wages for union and non-union workers by an average of $1,500 a year and decrease the likelihood employees will get health insurance or pensions through their jobs. By lowering compensation, they have the indirect effect of undermining consumer spending, which threatens economic growth. For every $1 million in wage cuts to workers, $850,000 less is spent in the economy, which translates into a loss of six jobs.

What about Idaho? Here is what the Idaho Department of Labor reported yesterday.

NAMPA, IDAHO — The Idaho Department of Labor says the state ranks last in overall earnings by full- and part-time job holders.

The median annual wage in Idaho is $23,192. The department estimates a family of four needs $39,000 a year to sustain itself but only about a third of Idaho jobs last year paid that much.

Idaho has one of the highest rates in the nation in which people work more than one job. He also noted that can be difficult for women with kids with no child support.

“That’s another tough situation when you have these low-wage jobs and the economy is evolving away from the higher wages to the lower wages,” he said.

The Idaho Department of Health and Welfare said it has experienced an increase in requested services. In June 2011, about 20 percent of Idaho’s population received help in Medicaid, food stamps, child care and cash assistance. The highest rate of people receiving help was in Canyon County.

“I think a lot of parents who may have lost a job and in turn lost health coverage for their family turned to Medicaid,” Idaho Health and Welfare spokesman Tom Shanahan said. “It was mostly children who came on.”

Don’t expect these facts to find their way into discussions among Idaho Republican legislators this year.  Because, as Gould and Shierholz pointed out, the facts will likely matter only to those legislators “dedicated to making policy on the basis of economic fact rather than ideological passion”, and that doesn’t describe many Idaho Republican legislators.

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