I’ve been carrying on conversations with family members in Wisconsin (yes, I’m a born-and-raised cheesehead) concerning Gov. Scott Walker’s budget reform measures. Most of my family agrees with what he did, but many are pretty dismayed by how he did it. And to a person, they remain unconvinced that the austerity measures, if you want to call them that, will have any positive effect on the state’s economy that they will notice. New jobs and tax cuts would be nice but nobody is holding their breath.
During one such conversation, I mentioned recent employment growth in Wisconsin — 9,500 new jobs in June alone. The figure is controversial – the feds count jobs differently than the state does — but that wasn’t the point during our conversation. The point at that time was, “these are not good-paying jobs.” Well, how to respond to that?
I asked Heartland Research Fellow Steve Stanek, managing editor of Budget & Tax News, and Senior Fellow Maureen Martin, a Wisconsin resident, for their advice. And I got lots of really good stuff:
First, Steve reminded me, “A low-paying job is better than no job. Look south to Illinois.” Yeah, no need to remind he and I live in the state Wisconsin Democrats fled to when they weren’t willing to participate in Walker’s reform discussions early in the legislative session.
And besides, “low-paying jobs often lead to better-paying jobs as people gain experience and learn on the job. Low-paying jobs also tend to generate better-paying jobs as economic activity tends to spawn more economic activity.”
Absolutely true.
Getting more deeply into it, Steve noted, “Holding down taxes and regulations makes it easier for employers to invest and hire. Harley-Davidson threatened to move out of Wisconsin because of heavy-handed unions and high corporate taxes. The company stayed only after winning seven years of concessions from the unions, and is still threatening to leave if corporate taxes remain high. H-D pays well. Wisconsin can continue down the path it was on and possibly drive out H-D, or it can tread a new path. There’s a reason BMW, Honda, Toyota, Volkswagen, Nissan and other automakers have spent billions of dollars to build plants and hire people in right-to-work states with low taxes and relatively light regulations. There’s a reason Detroit, with its high taxes, heavy regulations, and overbearing unions looks like Baghdad on a bad day.”
Wow.
Maureen weighed in: “Job counselors often urge job hunters to take a job, any job, rather than remaining unemployed until the ‘perfect’ job comes along. Reasons? Like Steve says, low-paying jobs can lead to better jobs, either through a promotion or through more economic activity. It also looks better on the resume not to have a huge gap in employment. And mentally, it’s just better to get up and have somewhere to go in the morning — an employed person feels more connected to the ‘real’ world, and thus better equipped to look for a better job.”
Heartland’s research director, Sam Karnick, gave me even more intellectual ammunition: “A state needs jobs for its low-earning workers just as much as it does for high-earning ones. Moreover, an increase in low-paying jobs can push up wages throughout the job market as fewer unemployed workers are available to fill jobs at all levels. An increase in low-paying jobs is an increase in jobs, period, and it is thus a net benefit to the state and especially to its lower-earning citizens.”
I’m indebted to the many smart people who are my colleagues at Heartland. Cannot wait to head up to God’s country this weekend for further conversations, better-armed.