State of Working Arizona finds the state excels on minimum wage, falls short on worker rights

LAUREN GILGER: Our next guest this morning has spent her career focused on workers, retirement, unions, inflation and more.

Teresa Ghilarducci is a labor economist, author, and professor at The New School for Social Research, where she directs their Wealth Equity Lab. Right now, she’s a visiting professor at ASU’s Center for Work and Democracy, overseeing their latest project on the State of Working Arizona.

She told me she started the project because there were a lot of reports about how businesses and the economy is doing, but workers are a big part of that picture. So they’re spending the year looking at how workers are doing in our state — from pay to worker protections to health insurance coverage and the employers and their ability to pay workers.

So, how do we stack up?

TERESA GHILARDUCCI: Actually, good and pretty bad. There’s one area that Arizona does very well in, and that is the low end of the wage scale, because the minimum wage was increased in what, 2016? And it was indexed to inflation. So that has meant that Arizona has one of the highest minimum wage in the country, and certainly one of the highest relative to the typical wage.

So the Arizona minimum wage has a real effect on making life affordable for low-end workers. Our preliminary research shows that kind of the number of working poor people is a little lower in Arizona, meaning you, in many places in this country, you can work full-time and not be able to lift yourself above the poverty level, much less a kid or two.

The metric of the percentage of people who are working and are still poor is pretty low in Arizona. You know, and that really helps the businesses where low-income people shop. You know, there’s a lot of multiplier effects when you raise the wages for people at the very bottom.

LAUREN GILGER: OK. So, that’s the good side. What about the other side of the argument here?

TERESA GHILARDUCCI: Yeah, so we really rank low in terms of worker protections or the rights of workers to have a voice in what their what their standards are. So for the typical worker, there’s hardly any way for a typical worker to raise their wages, their health insurance, their sick leave protection and their retirement.

LAUREN GILGER: That’s interesting, right? That history in the state goes back so far, right? Like, this has been the ethos of the state for so long.

Is this part of that kind of catchphrase you’ll hear all the time in Arizona when all of these issues come up and they’ll say, “Well, we’re a right-to-work state, so that’s not going to fly here.” What does that mean for folks?

TERESA GHILARDUCCI: Yeah, exactly. Right, it’s this kind of knee-jerk, ideological position, rather than anything else. And just for you to know a little bit about me, I am really interested in mining — gold mining, coal mining, extractive mining, any mining. I’m quite interested in the working conditions and also the technology of it. So, Arizona absolutely fascinates me.

LAUREN GILGER: Yeah, lots of mining here.

TERESA GHILARDUCCI: Yeah, lots of mining here, and the state was really founded between the fight between the copper mine owners and everybody else. So the conflict between labor and companies and the community and mining companies has really does define the attitude and the the very existence of Arizona as a state, not a territory.

And the verdict is that most of the time the mine owners are very powerful, and they’ve won. Mining is an industry that either you extract profits or you pay your workers and you help protect the environment. And the more you pay workers and protect the environment, the less profits there are. So it’s a very kind of crude industry for that reason.

And so it’s too bad that the attitude toward unions have been set by a mining industry, and it really should update its attention to worker protection and to to higher wages and even to rights.

LAUREN GILGER: Right. But you’ll hear in the state, right, that that the lack of unions — only 4% of workers in the state are unionized, about there — lots of folks here will say that’s a good thing in terms of economics. Like, opponents will say you can’t force people to join a union and pay union fees, they’re against collective bargaining and being required — and that this kind of creates a more business-friendly environment, right? Like, it attracts new businesses, creates more jobs, that kind of thing. I’m guessing you disagree with that, but tell us why.

TERESA GHILARDUCCI: Yeah. I mean, if it were true that being hostile to unions and being a low-paid state was good for business, then Mississippi would be the richest state in our union. You know, it turns out the correlations don’t even work.

Places in this country and also in this on this globe that actually have a healthy balance between profits and workers’ pay are among the richest places on the planet. So, for instance, New York and California probably produce the most productivity of any of our states, Illinois is up there in terms of just the value added for their own GDP and for the kind of innovation and being leaders in the globe in terms of economic sectors, and they have among the the highest levels of unionization.

LAUREN GILGER: You’ll also argue, right, that there’s an employer case to be made for high work standards for workers.

TERESA GHILARDUCCI: And this is where I put on my hat as an educator. I’m a labor economist. I’ve taught labor economics, you know, for over four decades now.

And so I am deeply in the research on the research question that is probably the oldest in labor economics, which is: What is the relationship between high pay and worker voice and the health of the employer that’s affected, of the industry if many of the employers are organized, and for the health of the economy, for the nation’s economy? And the results are not mixed. The evidence really points to a strong, positive relationship between high pay, dignity at work, and productivity and profitability for the company.

What are the pathways? The main pathway is that workers stay on the job, that you really reduce turnover, you get something called loyalty. And with loyalty, you get more worker effort, you get workers actually participating in the processes at work.

You know, workers know more than any supervisor could know, or management in the C-suite. And so if you can actually get workers to reveal that knowledge about how things could be done better, then you get higher productivity.

Work is a lot more complicated now than it was when you just had people harvest or mine. Workers have a lot of relationship with the customers, workers have a lot of judgment on the job, and as work gets more and more complicated, that will increase.

And so having a loyal workforce around you has real payoffs. There are so many ways that that’s been studied, but over 200 years of research — and a lot has happened in the last 10 years — labor economists will, and so will business professors, will agree that there is a positive relationship between high-performance workplaces and profitability.

LAUREN GILGER: Yeah. All right, we’ll leave it there. Teresa Ghilarducci joining us. She’s a labor economist and author, the Bernard L. and Irene Schwartz Chair of Economic Policy Analysis at the New School for Social Research and director of the Wealth Equity Lab there. She’s in Arizona now working with the Center for Work and Democracy at ASU overseeing the State of Working Arizona project. Teresa, thank you so much for coming on The Show. I appreciate it.

TERESA GHILARDUCCI: It was so great to meet you and to have this intelligent conversation. Thank you.