Thatplaces Wisconsin 34th nationally and nowhere near Gov. Scott Walker’s goal ofcreating 250,000 new jobs in his first term.
Althoughthe ranking is based on the federal Quarterly Census of Employment and Wages, asurvey that Walker has called the “gold standard,” the governor now seems to bedisputing its findings by claiming that Wisconsin’s job growth is 22ndnationally in terms of the absolute number of jobs created. Even that generousclaim would put Wisconsin behind the curve, since the Badger State is the 20thmost populous state in the nation.
Walkerand the corporate lobbying group Wisconsin Manufacturers and Commerce (WMC),which has bought more than $800,000 worth of airtime for their pro-Walker ads,have highlighted other economic rankings, such as the Federal Reserve Bank ofPhiladelphia’s view in June that Wisconsin is second in “potential economicgrowth” for the next six months. But officials at the Philadelphia Fed told theCapital Times that they don’t believethat the statistics Walker and the WMC are touting can be used for comparingand ranking states’ potential growth.
Alsoquestioning Walker’s claims is economist Menzie Chinn, a professor of public affairs at UW-Madison, who foundthat not only is Wisconsin underperforming when viewed against national trendsgoing forward, but it’s being outperformed by neighboring Minnesota andonce-struggling California.
Walker’sAusterity Has Stalled the Recovery
Thebig question is, why?
Walkerhas claimed that the uncertainty caused by the Capitol protests in 2011 and the2012 recalls stalled Wisconsin’s economy.
Chinnhas a different view, and cites Walker’s own austerity-style policies, such as slicingpublic employees’ pay, cutting taxes so that spending has to be cut further tobalance the budget, and the heightened uncertainty caused by Walker’scontroversial public employee union changes. Walker and legislativeRepublicans’ focus on conservative social issues, such as placing newrestrictions on abortion providers, likely doesn’t make the state moreattractive to potential entrepreneurs and residents, either, Chinn argued.
“Whatis true is that Wisconsin is growing noticeably more slowly than the nation andother regional neighbors, such as Minnesota, ever since Gov. Walker’sinauguration,” Chinn emailed the Shepherd.“This could be complete coincidence in terms of timing, but simple statisticaltests indicate that the difference in growth is statistically significant.”
EconomistLaura Dresser, associate director of the Center on Wisconsin Strategy (COWS),said that while state governors don’t have the fiscal tools that a presidenthas to stimulate the economy and spur job growth, Walker and the Legislature couldprovide a short-term boost to the economy by attracting more federal dollars tothe state.
Unfortunately,Walker rejected more than $800 million in federal funds to build high-speedrail, as well as $489 million to expand Medicaid in 2013-2015. Walker’salternative Medicaid reform will cost the state taxpayers $119 million duringthose years. Walker’s acceptance of those rail and Medicaid dollars would havecreated thousands of temporary, permanent and related jobs.
Dressernoted that Walker is using some federal funds for his just-announcedworker-training initiative, but “that’s rare in this administration.”
Dresseralso cited the weak national economy and the new slump in manufacturing asother factors affecting Wisconsin’s economy.
“We’redoing a little bit worse than a pretty bad national trend,” Dresser said. “Andwe are continuing to do a little worse.”
Shealso scoffed at Walker’s claim that the recalls were to blame for the state’sstunted job growth, saying that other states were running deficits followingthe Great Recession, but only Walker chose to gut public employees’ rights insuch a divisive way and reduce their paychecks. That uncertainty likelyinfluenced people’s spending habits and hiring decisions.
“Ifyou’re taking on a fight in the state in a time of economic trouble, thatcreates another thing that makes people worried,” Dresser said. “But that’s notthe recall’s fault.”
StagnantWages and Productivity
Besidesthe job data released last week, Wisconsin’s economy is showing additionalsigns of sluggishness, including:
■ Personal Income: In July, the stateDepartment of Revenue forecast that Wisconsin’s economy would grow at a“moderate” pace, or 1.1%. Personal income of state residents rose 2.7% in 2012,but that’s lower than the 3.6% growth in personal income nationally that sameyear.
■ Income Gap Is Growing: The nonpartisan Wisconsin Tax Alliance (WTA) foundthat although Wisconsin’s wages have been below the national average for morethan 40 years, the gap began closing in 2009 but is widening again. In 2008,Wisconsin’s wages were 6.8% below the national average; in 2009, 4.6% below; in2010, 4.5% below; in 2011, 4.8% below; in 2012, 5.1% below the nationalaverage. Wisconsin’s wages are lower than all four surrounding states, exceptfor Michigan’s, the WTA found.
■ It Takes Two to Support a Household: The WTA noted that while Wisconsin’s personal incomeis lower than the national average, the state’s household income is 4% higherthan the national average. Why? “Wisconsinites compensate for lower wages byhaving relatively more women working to supplement household income,” the WTAwrote.
■ Milwaukee County Is Struggling: According to the U.S. Department of Labor’s Bureau ofLabor Statistics (BLS), Milwaukee County’s employment and wages are not keepingup with the national standard. The BLS noted that between March 2012 and March2013, national job growth was 1.6%; Milwaukee County’s was 0.6%. Nationally,wages increased 0.6% to $989 per week; Milwaukee County’s workers sawabsolutely no increase in their wages between March 2012 and March 2103, withwages stagnant at $975.
■ Waukesha Isn’t Doing So Hot, Either: Waukesha County’s workers aren’t seeing healthygains, either. According to the BLS, Waukesha’s job growth between March 2012and March 2013 was 1.1%, compared to 1.6% nationally. That said, weekly wagesincreased 1.5% to $971 during that period, compared to 0.6% nationally. Butthat welcome growth still didn’t bring weekly wages up to the national averageof $989.
■ Productivity Is Slumping: According to data from the Bureau of EconomicAnalysis (BEA), Wisconsin isn’t keeping up with the 2.5% increase in nationalgross domestic product (GDP) in 2012. We’re not even keeping up withneighboring Midwestern states. The BEA found that Wisconsin’s GDP growth in2012 was 1.5%, a full percentage point below the national average. Compare thatto gains in Minnesota (3.5%), Indiana (3.3%), Iowa (2.4%), Michigan and Ohio(2.2%) and Illinois (1.9%).
StateRankings Are Flat
Whilethe state-based WMC has been touting its support for Walker’s agenda, othermore neutral groups feel that Wisconsin’s future isn’t quite so bright:
■ Wisconsin Is #41 in Forbes’ BestStates for Business: The business magazine looked at business costs, laborsupply, regulatory environment, economic climate, growth prospects and qualityof life. Wisconsin ranked #41, although it nudged a little higher to #37 ingrowth prospects. But the Badger State trailed our neighbors Minnesota (#8),Iowa (#12), Indiana (#16), Ohio (#29) and Illinois (#38).
■ Wisconsin Is a Blip in Business Site SelectionReview: The trade magazine Business Facilities evaluated the statesfor variables important to corporate site selectors, such as infrastructure,energy sources (including alternative energy sources), economic growthpotential, employment and strength in various industries. Unfortunately,Wisconsin only appears once in the top 10 rankings, as #9 in the ranking ofethanol leaders (behind neighboring Iowa, Illinois, Indiana, Minnesota andOhio). Other Midwestern states seem to impress corporate site selectors farmore, even among the categories that Walker is striving to change. Indiana hasthe sixth best overall business climate. Ohio is #7 in economic growthpotential and tops the list of states with the most improved business climate,while Minnesota ranks #4 for improvement. Iowa and Minnesota are among the top10 employment leaders.
