Wisconsin Climate for Job Growth Among nation's Poorest, U.S. Chamber Report Says

Christopher Neefus | March 10, 2011 | 4:09pm EST
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Opponents of the governor's bill to eliminate collective bargaining for many state workers protest at the state Capitol in Madison, Wis., on Tuesday, March 1, 2011. (AP Photo/Andy Manis)

(CNSNews.com) – In the midst of a budget crisis in Wisconsin, a report from the Chamber of Commerce ranks the state among the poorest in the nation for job growth potential due to union leverage and regulation in excess of federal standards.

“Wisconsin ranks in Tier III (Poor) with a labor and employment-law climate that is difficult for new job creation,” the Chamber says. The claim is part of a report, called “The Impact of State Policies on Job Growth: A 50-State Review,” in which the business federation says states overall could create 50,000 new businesses and 750,000 new jobs if only they would streamline their employment regulation.

According to the Chamber, their prescription “offers policymakers a roadmap for an essentially free shot of economic stimulus.”

“The study shows that if each state were to improve their regulatory climates to the level discussed in the report, the effect would be equivalent to a one-time boost of 746,462 net new jobs nationwide,” the Chamber said in its report.

“Moreover, the rate of new business formation would increase by 12 (percent), resulting in the creation of 51,590 new firms nationally each year. Reducing the burden of labor and employment regulation in the states could act as a free shot of economic stimulus -- equal to approximately seven months of job creation at the current average rate.”

“Without cost to state governments or the federal government -- or the taxpayers -- states can take steps now to improve their economic conditions and begin to prime the pump of job creation and new business formation.”

But according to the report, which is based on a 50-state analysis of labor laws by law firm Seyfarth Shaw LLP, Wisconsin has a number of barriers to job growth thanks to statutes that are duplicative of federal law, or exceed it. For example, the state has its own version of the federal WARN (Worker Adjustment and Retraining Notification) Act. The federal law requires employers with more than 100 workers to give 60 days’ notice to staff in advance of widespread layoffs like, for example, a plant closing.

According to the U.S. Department of Labor, the law allows workers the time to “seek and obtain other jobs, and, if necessary, to enter skill training or retraining that will allow these workers to compete successfully in the job market.”

But Wisconsin goes even further by including smaller, less flexible businesses in this requirement.

“For example, while the state's mini-WARN law largely tracks the federal requirements, its reach is much broader, applying to employers with as few as 50 employees rather than 100 employees under federal law,” the report says.

Additionally, the Chamber says, “Wisconsin law contains provisions that appear to be designed to facilitate union organizing. Wisconsin Act 290, which was signed into law in May 2010, places significant limitations on the ability of employers to hold ‘captive audience’ meetings to communicate with employees about labor unions.”

A “captive audience” meeting, referred to as such by unions, is an all-hands meeting in which an employer attempts to discuss or argue against a decision to unionize.

“Wisconsin is not a right-to-work state and…(m)ore than 46 percent of public-sector workers are unionized,’ the Chamber continues in its report. The private sector within Wisconsin also has elevated union membership at 8.3 percent, above the national average. The state also has what the Chamber of Commerce calls an 'unusual' piece of worker protection.

“Wisconsin has an unusual state law, the Records Open to Employees Act, that provides a past or present employee the ability to view and cop their personnel records at least two times each calendar year,” the group says.

Other provisions mentioned in the report include “aggressive enforcement” actions from employment agencies operating in the state, discrimination laws that exceed federal protections, and “significant additional posting and notice requirements” for businesses.

Newly elected Gov. Scott Walker (R) has been embroiled in a standoff with Democrat state senators who have fled to Illinois rather than provide quorum for his legislative plan to balance the budget and reform public sector unions.

His plan includes curtailing said unions’ ability to collectively bargain for pensions and benefits; making dues payments, which often go to political causes, voluntary; and requiring public sector unions to hold a recertification vote each year in which 51 percent of employees indicate they want to remain unionized.

In addition to the Seyfarth Shaw LLP, the Chamber of Commerce report was also compiled in coordination with the consulting firm Navigant Economics.

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