Study: Labor reforms save taxpayers billions and spark economic growth

Feb. 24, 2022, Harrisburg, Pa. — A new Commonwealth Foundation report examines the impact Wisconsin’s Act 10 has had on balancing budgets, stimulating the economy, and enacting school choice legislation. Passed in 2011, Act 10 has reined in public union special privileges and restored workers’ rights while saving Wisconsin taxpayers billions of dollars.

“Many government employees are trapped in unions and denied alternative representation,” said Commonwealth Foundation Senior Vice President Nathan Benefield. “These unions then lobby against fiscally responsible, growth-stimulating market reforms.”

Act 10’s signature labor reforms—gained under former Gov. Scott Walker’s (2011–19) leadership—have spurred the state’s economic growth and facilitated free-market reforms that boosted personal incomes and increased employment. Walker’s tax credits alone helped to create over 42,000 jobs, including 20,000 in manufacturing.

“Our study found that Wisconsin’s state government successfully addressed similar problems to Pennsylvania through comprehensive labor reforms,” Benefield explained. “Pennsylvania should follow Wisconsin’s lead and stop holding our economy back.”

Quantitative analysis by the Commonwealth Foundation found that Act 10 saved Wisconsin taxpayers nearly $7 billion in 2018. Act 10 resolved Wisconsin’s $3.6 billion deficit without raising taxes and instead enabled historic tax cuts and credits for families and businesses. Notably, Walker implemented the lowest state property taxes since World War II and enabled $8.5 billion in tax relief while in office.

Government union reform also transformed educational opportunity in Wisconsin. Act 10 led to increased teacher quality, substantial statewide improvements in student achievement, and school choice expansion. Since the passage of Act 10, the number of low-income students that benefit from Wisconsin’s school choice program has increased almost thirty-fold.

Wisconsin lawmakers put an end to special privileges that allowed government union leaders to unfairly lock in membership and resources. Pennsylvania should follow Wisconsin’s lead and enact a series of government labor reforms, including:

Requiring regular recertification elections
Banning the automatic deduction of dues and political action committee (PAC) contributions from government employees’ paychecks
Empowering government employees to choose whether to belong to a union

“These reforms will restore the rights of Pennsylvania’s government employees and enhance the accountability of its government unions,” said Benefield. “They will also clear the political path for school choice, a range of tax cuts, and other prosperity-enhancing policies. Labor reform made Wisconsin a more fiscally responsible, prosperous state, and there is no reason to expect a different result in Pennsylvania.”

You can read the full report here.

Commonwealth Foundation experts are available for comment. Please contact Andrew Cuff at (818) 519-7620 or [email protected] to schedule an interview.

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