Economists continue to sift through Gov. Walker?s budget repair bill, wondering what impact a pay cut for thousands of public workers might have on the local business community. If workers have less disposable income in their pockets, the thinking goes, they?ll have less to spend on furniture, eating out or a new car.
One analysis released Wednesday by a UW-Madison Extension economist suggests that laying off 1,500 state employees, as Walker has threatened, would actually have less negative impact on the economy than subjecting some 350,000 public employees in Wisconsin to a 7.7 percent cut in take-home pay. That pay cut figure is based on employees contributing to their pensions and more to their health insurance.
Quoted: Steven Deller of Extension’s Department of Agricultural and Applied Economics