Are the Best States for Workers Also the Best States for Business?

August 2018 in , , , ,

By: Michelle Sternthal, Senior Domestic Policy Advisor, Oxfam America

Popular rhetoric in the U.S. pits workers against businesses. How often does one hear, “Worker protections saddle businesses and stall the economy! Increasing the minimum wage will scare away businesses! Regulations kill jobs!” In so many policy conversations, we are told that labor laws must be sacrificed to achieve a stable and sound economy. This excuse is often trotted out by federal lawmakers as they squash laws that would provide paid sick days, paid family leave, or minimum wage increases to working Americans.

Luckily, state lawmakers across the country have rejected this false choice between being pro-worker and pro-business. They know—and an impressive body of evidence confirms—that economies thrive when businesses invest in their workers and their workplaces. Increasing wages reduces employee turnover, cuts employers’ costs, and increases worker purchasing power. Providing paid sick days keeps employees healthy and productive. Ensuring that workplace environments are free from discrimination helps keep talented women and people of color in the workplace, increasing productivity and diversifying work environments.

Oxfam America’s newly released Best States to Work Index confirms just this. In this new ranking of states, Oxfam examined 11 different labor policies across the fifty states and Washington, D.C.  The index broke down these policies into three domains:  wages, worker protections, and the right to organize. States were ranked and given an overall score, in addition to scores for each domain. An interactive map enables users to explore each state in depth.

What Oxfam found: Washington, D.C., ranks first in the nation in worker-friendliness and neighboring Virginia ranks last. Washington state, California and Massachusetts appear at the top, while Georgia, Alabama and Mississippi are at the bottom.

But the report also examined how scores on the index correlated with indicators of overall wellbeing in the states. We found that the states that scored higher in the index were more likely to have a higher median income, higher labor force participation, and greater GDP per capita. They were also the states with better health outcomes—lower infant mortality rates and longer life expectancies. While correlation is not causality, this evidence suggests that labor policies, at the least, are not damaging to the economy or the health of the population, and that they may in fact support them.

Also striking, three of our top performing states on the index were ranked by U.S. News and World Report as the states with the best business environments, with California, Massachusetts, and Washington scoring #1, #2, and #4, respectively.

Our index illustrates what so many policymakers and state advocates already know: good jobs that treat workers well are not just good for employees, but good for businesses, and good for the state.

Despite progress in some states, policymakers still have their work cut out for them. According to our index, many states still lag in worker protection policies. Although the majority of states have made progress on basic equal pay legislation and on a basic sexual harassment law, not enough have passed paid sick leave, paid family leave, and fair scheduling laws.  And many states have a ways to go to pass a wage law that begins to meet the needs of working families in their state.

Instead of heeding the fear-mongering about supposed economic catastrophes caused by sound labor laws, we need bold leadership by state policymakers to champion a comprehensive worker rights agenda.  This Labor Day, we are counting on progressive state leaders to take up this mantel.

Are you a state legislator interested in working on these issues? Contact info@stateinnovation.org to get connected with resources and support.