The importance of keeping Act 10 and right-to-work, and how to create additional opportunity for workers
Government policies can improve the functioning of labor markets, but they can also protect established interests at the expense of workers seeking employment and advancement. This chapter examines four areas of labor market regulation in Wisconsin in which policies can favor established “insiders” over “outsiders,” limiting economic opportunity, reducing labor market efficiency, and undermining economic growth. It offers six recommendations to increase the freedom of employers and workers to enter into mutually beneficial employment arrangements.
Key findings:
- Occupational licensing creates substantial barriers to employment in Wisconsin. Barriers that limit entry into a profession can enable existing practitioners to exercise market power. Roughly 20 percent of Wisconsin workers are in licensed occupations. A national study ranked Wisconsin seventh among states in the number of licensed occupations, with 135.
- Wisconsin lacks important mechanisms for reducing unnecessary occupational licensing requirements. The state has no formal sunrise or sunset review process for occupational licensing and has not adopted a comprehensive universal licensing recognition law, despite 28 other states having enacted such legislation.
- Act 10 increased accountability in public-sector union representation and shifted opportunities toward newer workers. Consistent with insider-outsider theory, following Act 10’s enactment, salaries of newer teachers increased both in absolute terms and relative to senior teachers and that entry into the teaching profession became more attractive in Wisconsin relative to comparable states, as reflected in an approximately 20 percent increase in the number of teaching degrees awarded relative to those states.
- Wisconsin’s right-to-work law strengthened workers’ freedom to choose whether to support a union. Private-sector union membership fell from roughly 8 percent before the law’s enactment in 2015 to around 6 percent afterward, a decline of approximately 30,000 members. Research suggests that right-to-work laws create incentives for unions to provide better services and can encourage greater business investment.
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Notes and links on Act 10.
Milwaukee County pension scandal trial primer.
