Report Shows Public Employee Pay Reductions Hurt Economy

Professor Steven Deller, a faculty member in the Department of Agricultural and Applied Economics, spoke at a press conference Tuesday and shared his research on the state’s economy. Deller found that a 7.7 percent pay reduction (roughly the amount of increased pension and insurance contributions)  greatly reduces consumer spending in the state and puts Wisconsin in a weak position to create jobs.

The state budget cuts are essentially rippling their way through the state’s economy . . . (and) it looks as though we’re not going to recover any time soon.

Deller said that the state has lost more than 20,000 jobs due to a reduction in government spending, and about half were attributed to the decrease in public employee take-home pay. Wisconsin ranks alongside Louisiana, West Virginia, and Wyoming as worst in the country based on state job indicators.

Cullen Werwie, a spokesman for  Governor Scott Walker, maintained that the cuts were necessary to balance the state budget without any tax increases and helped prevent public school or local government layoffs.

The press conference was led by State Representative Brett Hulsey (D-Madison) who presented a report by the Institute for Wisconsin’s Future.