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Econ prof Chowdhury releases study on Wisconsin’s Right to Work legislation

 

January 27, 2015

Dr. Abdur Chowdhury, professor of economics, has released a study that illustrates the direct and indirect impact of Right to Work on income and income tax revenue in Wisconsin and the proposed law’s effect on the states’ overall economy.

The study, The Potential Effects of Right to Work Law in Wisconsin, shows that Right to Work is “shortsighted and a superficial selling point,” according to Chowdhury.

“Our findings show that Right to Work places downward pressure on wages and erodes the quality of a state’s labor force by encouraging the best and brightest to migrate to states where wages are higher,” Chowdhury said. “RTW laws reduce wages and cause income and spending to decline. This in turn means lower income, less income tax revenue and less spending, which translates into lower sales tax receipts.”

Some key findings of the study include:

  • Net loss in direct and indirect income to Wisconsin workers and their families would vary from $5.84 to $7.23 billion annually
  • Economic loss in Wisconsin income taxes is estimated between $234 and $289 million per year
  • Unionization rates in RTW states are less than half of what they are in Collective Bargaining (CB) states
  • Wages are lower in RTW states than CB states
  • RTW increases gender and racial wage inequality
  • RTW increases workplace fatalities

“Simply stated, RTW legislation would provide no discernible overall economic advantage to Wisconsin,” Chowdhury added. “But it does impose significant social costs.”

Chowdhury’s study was commissioned by the Wisconsin Contractor Coalition, a group of more than 350 businesses united in opposition to any right-to-work legislation, and changes to Wisconsin’s prevailing wage law. The WCC mission is to be a leading bipartisan advocate of legislative, regulatory and public policies affecting the construction industry in Wisconsin.