No one should mistake the new “pro-business” laws that Kentucky is about to enact as a substitute for sound economic-development strategies or a shortcut to a more prosperous state.
There really are no shortcuts. Building prosperity requires an educated, healthy workforce; communities where people want to live, and opportunities for workers to earn a decent living.
Jobs that pay such low wages that workers and their families qualify for food stamps and Medicaid can’t build prosperity. Such jobs don’t even end dependency.
The anti-union right-to-work and repeal of Kentucky’s prevailing-wage law will put higher profits into business owners’ pockets. But they will push down wages for all workers, not just those who belong to unions.
The Economic Policy Institute, a pro-labor think tank, reports that right-to-work is associated with lower annual wages of $1,558 for a typical full-time worker. Wages in Kentucky already lag the national average. Pushing wages lower is going in the wrong direction.
But, after electing a Republican governor in 2015 and then a year later putting both legislative chambers into Republican hands, Kentucky was bound to become the 27th state to enact a right-to-work law.
The formerly Democratic House had been the only obstacle, and Kentucky will be the last southern state to weaken labor unions by allowing workers to receive union-negotiated wages and benefits without paying union dues. Until its impending repeal, the prevailing wage had put a floor under construction-industry wages by requiring government contractors to pay set wage levels.
Gov. Matt Bevin and the new Republican majority can pause just long enough to congratulate themselves for fast-tracking these changes that they have long desired and promised.
Then they must get serious about removing Kentucky’s real obstacles to economic development: one of the nation’s sickest and most drug-dependent populations; insufficient supports for educating young Kentuckians to compete in a fast-changing economy; a teetering public-employee pension system that chokes the state’s ability to invest in itself and scares away private investment; internet connection speeds and access to broadband that trail competing states.
Rural Kentucky, especially areas where the coal industry has all but collapsed taking tax revenue down with it, needs vision and attention from Frankfort.
Kentucky’s cities are its centers of job creation. If prosperity for more Kentuckians is their goal, lawmakers and Bevin will loosen state restrictions on the ability of our cities to compete with those in other states, including authorizing local increases in the minimum wage.