Job Numbers Show Wisconsin Headed in Wrong Direction

For all of the commercials talking about who is a professional politician or how many stem cells it takes to screw in a light bulb,the real issue this election is jobs.

We now have the final employment numbers prior to the election. Not only are the numbers nowhere near where Wisconsinites would like them, they are actually getting worse. Wisconsin’s Department of Workforce Development announced a slight drop in the seasonally adjusted unemployment rate in September to 7.8%, but the rate is not telling the whole story. Part of the decrease in Wisconsin’s unemployment is the result of Wisconsin’s favorite growth industry: government.

While DWD mentions in the press release an increase of 400 jobs net for government, they neglect to mention that the state of Wisconsin actually added 2,500 jobs in just one month. While local government saw a decline last month of 2000 jobs, Wisconsin’s local governments still have 600 more people living off your taxes over the same time last year. The federal government has added 800 jobs in Wisconsin since last year at this time.

Like former Minnesota Viking Jim Marshall, the state of Wisconsin is running the wrong way. In seasonally adjusted numbers, Wisconsin has lost 84,700 jobs since the near-trillion-dollar federal stimulus law was passed in February 2009. A significant part of this devastation has been the loss 30,300 manufacturing jobs.

The White House had hoped Wisconsin would see an increase of 74,000 jobs after the stimulus passed. We’re still not even at the pre-stimulus unemployment rate of 7.7%.

Former National Public Radio news analyst Juan Williams is not the only one who lost his job recently. Just in the last month, Wisconsin lost 9,900 jobs in the private sector using seasonally adjusted numbers. This wipes out the gains of the last two months and is the first drop in private sector employment since March. The state lost 1,600 jobs in manufacturing and 2,400 construction jobs in the last month.

Even as the number of available jobs is shrinking, so is the workforce. Using seasonally adjusted numbers, since the federal stimulus law passed in February 2009 Wisconsin’s civilian labor force has shrunk from 3,121,600 to 3,031,000, a loss of 90,600.

Is this a permanent fleeing of the state? As hard as it is to picture Cheeseheads as economic refugees in Texas and North Carolina, the MacIver Institute reported earlier this month more than $1 billion in income fled the state in Governor Jim Doyle’s first six years. It is too soon to tell if this shrinkage of the civilian labor force is a continuation of the trend.

The other possibility is that a significant portion of the workforce has simply “dropped out,” and I don’t mean they’re following the advice of Timothy Leary. They are the part of the workforce so discouraged by the lack of job prospects that they are no longer even trying. If the economy improves in Wisconsin, unemployment numbers will continue to lag as these people hopefully re-enter the workforce.

A Reuters-Ipsos poll earlier this month reported that 62% of the registered voters surveyed thought Wisconsin was headed in the wrong direction, including 61 % of the self-described “independents” surveyed. The economy was mentioned as the number one issue of concern for Wisconsinites, according to 63% of the respondents.

Unfortunately for them, the latest employment numbers would seem to bear out those feelings. Wisconsin faces significant challenges in bringing government taxation and spending down while improving Wisconsin’s friendliness to business. Forbes Magazine recently ranked Wisconsin 43rd in the country for business climate. That is not a standing that signals economic growth and employment growth in the future. The next governor, regardless of whom he may be, will need to challenge the legislature to make across-the-board changes to have Wisconsin live up to the motto “forward” again.

By James Wigderson
Special Guest Perspective for the MacIver Institute