How will right-to-work impact Wisconsin’s economy?

Employment in right-to-work states has increased in the last decade

In Wisconsin employees of private companies that are unionized must pay union fees whether or not they are a member themselves. However, that could change with the passage of a right-to-work bill.

Wisconsin would become the 25th state in the U.S. to have a right-to-work law. In the past decade, employment in right to work states has increased while it has declined in union states. However, economist are quick to point out that every state is different and it might not have the same effect on Wisconsin.

“Right to work allows an employee to work for an employer without joining the union or without paying union dues,” Cheryl Gill, a partner at Johns, Flaherty, and Collins said.

Those in favor of the bill said it will give workers more freedom over joining unions and increase employment.

“You see strong economy comebacks in both Michigan and Indiana that have gone through this process just a few short years ago,” Wisconsin Gov. Scott Walker, said. “So this isn’t just in theory, in practice those areas see unemployment going down they see positive results there.”

Those against the bill said weaker unions could mean weaker wages.

“It basically means the unions don’t have the power and the bargaining ability they once had,” Gill said.

John Nunley, an associate economics professor at University of Wisconsin-La Crosse, said the bill may increase employment and will likely lower wages, but it’s hard to tell if that will make the economy better.

“If the gains in employment outweigh the wage cost then it’s a good thing. If the gains in employment don’t outweigh the wage reduction then it’s a bad thing,” Nunley said.

He said lower wages would have a negative ripple effect.

“If workers take home less pay that means less money, at the clothing store, the grocery store,” Nunley said.

To offset that negative impact an increase in employment would have to be extreme.

“Will the unemployment rate fall to zero? Probably not but that might generate more economic effect on employment,” Nunley said.

The majority of right-to-work states are in the South. As for the Midwest, Illinois and Minnesota are union states and Michigan, Indiana and Iowa are right-to-work.