Beyond the Spin, State Employment Numbers Dismal

Next vacation, I’ll tour government offices…

I did my part for the Wisconsin economy. Last week the Lovely Doreen from Waukesha and I ventured to the Wisconsin Dells with our children, doing our part to pump dollars into the local economy. We took full advantage of the increase in the seasonal employment in Wisconsin as tourists. I even got a picture of myself wearing a funny Moose hat.

Seasonal employment is the key. Every May, Wisconsin adds jobs to ready itself for the summer tourism season, ramping up for construction, and other industries that require the warmer weather. Indeed, the numbers are out for May unemployment and in numbers not seasonally adjusted, leisure and hospitality added 10,700 new jobs last month.

With the release of the May unemployment numbers, the state announced a reduction in unemployment last month and the creation of 32,000 jobs, according to the unemployment figures not seasonally adjusted. The champagne corks were popping and the governor celebrated as the state’s unadjusted unemployment rate dropped 0.5%.

Governor Jim Doyle released the following statement:

“The tremendous drop in the May unemployment rate and the state’s addition of tens of thousands of jobs reflects our hard work to help communities across the state recover from the national economic crisis. I will continue to do everything possible to make sure that as this national economy turns around, Wisconsin is in a position to come roaring back.”

Unfortunately, every silver lining has a cloud attached to it.

When we take into account the seasonal adjustment, instead of adding 32,000 private sector jobs, the Wisconsin economy lost 7,900 private sector jobs in May. The net change from a year ago is a loss of 37,400 jobs in the private sector.

Even the hospitality industry is worse off. In seasonally adjusted terms, 3,700 jobs were lost in May and 6,700 jobs were lost since last year. Using the terms the governor would prefer, in non-adjusted numbers leisure and hospitality may have added jobs in the last month, but there is still a loss of 7,500 jobs since last year.

Overall, Wisconsin’s economy in May added 1,600 jobs in seasonally adjusted terms, not the “tens of thousands” that the governor claimed. 

According to the seasonally adjusted unemployment numbers, the number of government jobs in Wisconsin grew by 7,900. The net change in seasonally adjusted government jobs is plus 9,500. The other economic sectors that have seen any job growth in the last year are waste management and administrative services (5,500), educational services (3,100) and health care and social assistance (2,900).

State government alone added 3,100 jobs in the last month, although Department of Administration Deputy Secretary Dan Schooff says the numbers used by the federal Department of Labor “can be easily misconstrued.” Schooff says the actual number of state jobs increased only by 222 positions from April to May. 

The federal government added 3,800 jobs using seasonally adjusted figures, while the local governments added 1,000 jobs using seasonally adjusted figures.

Using figures not seasonally adjusted, government jobs went up 8,200. Of them, 4,100 were federal jobs, 2,900 jobs were at the state level, and 1,200 jobs were at the local level.

It is not known how many government jobs are the result of stimulus spending, nor was it clear how many of the jobs were census-related. However, the state’s relied upon over $3.4 billion in federal stimulus money to attempt to bring the state budget into balance last year (see the MacIver Institute’s $13 Billion of Bad). When that federal money goes away so will many of these government jobs. The alternative is higher state and local taxes, further hurting the private sector and reducing the number of private sector jobs.

Far from celebrating, Wisconsinites should be concerned about the continued wrong direction for the state’s employment figures. When we continue to have a net loss of private sector employment, and we add in a shaky funding foundation for future government expenditures, the result is likely to be more economic trouble and continued high unemployment.

That will continue regardless of how many funny hats I buy.

By James Wigderson
Special Guest Perspective for the MacIver Institute