The Wisconsin unemployment figure is historic, but not the complete economic picture.
In May, the Wisconsin Department of Workforce Development calculated the unemployment rate to be 3.1%. This is a percentage we haven’t seen since 1999, so naturally people with a stake in it are taking credit.
But what does it really mean for the economic and social success of our state?
Regardless of which direction they’re trending, or who’s attributing them to whom, bear in mind that unemployment numbers are calculated by polling. You only count as “unemployed” if you aren’t employed when they call, are available to be employed, and have trying to get employed. It doesn’t count those who work part time, seasonally, or have given up on the job market.
Just Following the Trend
Unemployment has been trending downward since the Great Recession, and Wisconsin has mostly just been paralleling that trend, consistently, about one percent below the national average. You could attribute that one percent however you want. Maybe it’s the role of agriculture in our economy. Regardless, it’s not new, and it’s not Governor Walker’s accomplishment.
Lagging in Population Growth
At an estimated growth rate of 1.61% over the past 6 years, Wisconsin is ranked 38th, and is far below the national average of 4.66%. The state’s birth rate is middling; the real cause here is emigration. Wisconsin was recently ranked the 7th in proportion of outbound moves to inbound.
A lot of the state is actually losing population, with Menominee and Dane counties as clear exceptions. We’re losing talent and tax revenue. When people move away, and we all know people who have, their knowledge and training goes with them.
Open Only For Big Business
Wisconsin has been on a streak of ranking dead last in startup activity according to the Kauffman Index, by a significant margin. This means we’re placing a disproportionate share of our economic eggs in a few baskets, relying on large companies for more of our job growth rather than building the economy from the ground up. We’re entirely too vulnerable to the next Oscar Meyer pulling up stakes.
This is entirely in line with the Koch’s “jobs” strategy, as carried out in their legislature. The Wisconsin Economic Development Corporation (WEDC) has been giving out large lump-sum grants with little accountability, and Wisconsin’s labor standards have become so lax that China’s disastrous Foxconn is looking at moving here. This dependence on large employers is bolstered by limited non-employer insurance options, right to work, and an active crusade against unions. Madison is the exception in this metric too, and Dane County overall has been leading the state in job growth.
Be Careful What You Wish For
A shortage of one thing can often be a surplus of another. A seller’s housing market and a low rental vacancy rate can be a housing shortage. Low unemployment can be a shortage of workforce, and an excess of unfilled positions, holding back our economic growth.
This isn’t to say that higher unemployment would be better for the state, just that it’s a situation that might not be great for service and retail jobs struggling to cover all their shifts, or for the hiring manager trying to replace someone about to retire.
In 2010, I scoffed at Scott Walker’s claim that you could “create jobs” just by changing the tax rate, or handing out grants to large companies. And I don’t believe it now either. Whether a company comes to our state or leaves it depends on much more than those two items on the balance sheet. It depends on whether there’s a plentiful labor pool to recruit from, what it’s like to live here, and how much it costs to do so.
It’s not all about attracting those “whales” either. The surest way to land the next Land’s End or Harley is to help businesses get started here.
Courtesy of https://medium.com/@IndivisibleMad. Nicholas Davies is a local member of, and regular contributor to, Indivisible Madison.