The Best States to Work Index: A new tool to rank US states in labor policies

This is a blog first posted on Oxfam here.

Workers in the United States are facing wage stagnation and poor employment conditions that are holding their families back. This index measures which states are taking action.

The US economy fails many workers and their families in several ways. Wages are mostly stagnant when adjusted for the cost of living, even though the US is experiencing record low unemployment rates. Over 40 percent of workers earn a wage below $15 per hour. Over 51 million workers in the United States do not have access to paid sick leave, including over half of workers of Hispanic descent. Even fewer workers have paid family leave benefits, at just 14 percent of the workforce.


One reason for these shortcomings is that federal labor and employment laws in the United States are less advanced than those of other countries. This point emerged strongly from recent Oxfam research on policies to combat income inequality, which showed that the United States is the only Organisation for Economic Co-operation and Development country without national paid maternity leave, and has a comparatively low minimum wage compared to other OECD countries.


Despite the lack of progress in federal legislation, many states are charging ahead with increases in the minimum wage, mandates for paid parental leave, and even laws to ensure the right to organize for public sector workers. The United States has a unique government system in which progress often happens at the state and city level, later followed by the federal government.


To rank states on their progress, we at Oxfam created the Best States to Work Index, which is detailed in a report and a website. It measures states (including Washington, DC) in 11 policy areas that fall in three dimensions: wage policies, worker protection policies, and the right to organize policies.


Through the rankings on the Best States to Work Index, we show the following:

• Washington, DC ranks first in the nation and neighboring Virginia ranks last. Washington State, California, and Massachusetts appear at the top, while Georgia, Alabama, and Mississippi are at the bottom.
• No state provides a living wage, a critical determinant of the adequacy of the minimum wage.
• States 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, few have passed paid sick leave, paid family leave, or fair scheduling laws.

We also looked more closely at the relationship between the Best States to Work Index and the well-being of people in a state, correlating the index with economic and social indicators. Overall, the data show a correlation between high scores on the Best States to Work Index and desirable economic and social indicators. Our analysis found a moderate correlation with lower rates of infant mortality and poverty, and with higher rates of life expectancy, median income, GDP per capita, and labor force participation rates. While correlation is not causality, this evidence suggests that these policies are not damaging to the economy or the health of the population, and that they may in fact support them. At the very least, the lack of any clear negative economic impact and the strong evidence of positive impacts on measures of well-being indicate that more states should pursue these policies.

Over the next few months, we will further develop some critical insights from the Best States to Work Index through this blog series. Stay tuned for updates.