Correspondents say Governor Scott Walker's action against public sector unions could become a template for other lawmakers facing budget deficits
The failure of a Democratic bid to unseat Wisconsin's Republican governor should not alter the presidential election battle, the White House says.
Spokesman Jay Carney said he "wouldn't read too much into" Scott Walker's win over Milwaukee Mayor Tony Barrett.
But Mr Walker said Wisconsin would be "competitive" when Barack Obama takes on Mitt Romney in November.
Mr Walker's victory could also embolden politicians in other regions to take on organised labour, analysts say.
In other votes, two California cities overwhelmingly approved cuts to state workers' pensions to save public money.
Speaking to reporters on Wednesday, Mr Carney said Mr Barrett was facing an uphill struggle in his battle against Mr Walker.
"What you had was an incumbent governor in a repeat election that he had won once, in which he outspent his challenger by a magnitude of seven or eight to one with an enormous amount of outside corporate money and huge donations.
"I certainly wouldn't read much into yesterday's result beyond who is occupying the governor's seat in Wisconsin."
But Mr Walker said Mr Obama could no longer count on carrying the state with a comfortable margin like he did in 2008.
"I think anyone looking at the results last night would also acknowledge that it's now competitive in Wisconsin," he told US TV network MSNBC.
In California, voters in the cities of San Diego and San Jose - the eighth and 10th largest cities in the US - approved ballot measures that would curb retirement benefits for government workers.
The moves had been touted as a strategy to save public funds, correspondents say, even as residents have seen cutbacks to other public services while the cost of public pensions have soared.
Both measures passed with wide margins: San Diego residents approved the measure by 66% and San Jose by 70%.
"A big win here gives mayors across the country confidence that if they bring this to their voters, the voters will get it," Democratic San Jose Mayor Chuck Reed told the Associated Press.
In addition, Republican politicians in the US states of Michigan, Minnesota, Missouri and New Hampshire are reportedly considering renewed pushes against union rights.
"Not only is there the momentum in favour of the kinds of reforms that Governor Walker advocated for and got passed, but there becomes a competitive issue," Minnesota state Senator Dave Thompson told the AP.
In Wisconsin, Mr Walker's divisive plan was aimed at closing a state budget deficit of $3.6bn (£2.3bn), partly through public sector reforms.
His proposals set off weeks of angry protests and even prompted 14 Democratic lawmakers to temporarily leave the state in an effort to stall the bill.
The law that was eventually passed forced employees to contribute more towards healthcare and pensions and limited the collective bargaining rights of public sector unions.