Legislation will stifle demand by lowering wages, lessening the influence of the consumer class
Many proponents of the bill suggest that it’s needed to boost job numbers in the state, citing studies that show RTW states producing more jobs than their non-RTW counterparts. These studies, however, fail to account for other factors, and are therefore flawed in their reasoning.
The Center for Media and Democracy’s PR Watch explains (emphases in bold added):
Economic development and job creation are complicated issues with many factors, and isolating the impact of right-to-work requires scientific rigor. Yet Vedder’s [pro-RTW] study only controls for seven factors—whereas the leading study on right-to-work laws, by Gould and Shierholz, controlled for forty-two different variables in finding that wages are 3.2 percent lower in right-to-work states.Common sense dictates that RTW legislation will actually create less jobs for the state. Here’s why: RTW states, because they lessen the influence of union negotiations, tend to pay their workers lower wages than non-RTW states do.
By only controlling for seven factors, Vedder can’t claim that right-to-work is responsible for its claimed effects. Correlation does not mean causation. For example, North Dakota and Texas are both right-to-work states—but their high recent job growth is attributable to the oil and gas industry, rather than right-to-work laws, which Vedder doesn’t appear to control for.
When workers get paid less, that’s bad news for the economy overall because it means consumers will ultimately spend less as well. A lower amount of consumer spending will translate into less demand for goods and service, which will lessen the need for workers in the eyes of business owners.
In short: RTW will lessen demand, the true driving force of job creation.
Lawmakers and pundits who claim we need RTW are guilty of two sins. First, they’re willfully ignoring evidence that shows job growth isn’t congruent with the legislation they’re aiming to pass. The evidence just isn’t there.
Second, and more importantly, they’re admitting that the much-propagandized “Wisconsin Comeback” that Scott Walker touted during his re-election campaign is non-existent. Either we need to create jobs (the “irrational-rationale” for this legislation), or we’re creating them at just a fine enough pace. Wisconsin Republicans, however, are trying to have it both ways.
Unfortunately for Wisconsin, the state IS experiencing a slowdown of job growth since Walker took office. What’s more troubling is that RTW isn’t a remedy to that problem. Instead, it’s going to make our slowing job growth even worse than it already is.