In a year-end interview on national television Scott Walker was asked if he supports raising the minimum wage. He answered a definitive No! He responded saying that the nation should instead follow his Wisconsin footsteps in job creation. What alternate universe does the Governor live in?
Quarterly data rank Wisconsin 37th in private-sector job growth
The nation’s most recent employment report, which examines job creation in all 50 states, raises a familiar question with renewed urgency: Why is Wisconsin a chronic laggard?
According to Wednesday’s report from the U.S. Bureau of Labor Statistics, Wisconsin gained 23,963 private-sector jobs in the 12 months from June 2012 through June 2013, a 1.0% increase that ranks the state 37th among the 50 states in the pace of job creation during that period.
The state’s ranking slid from a revised rank of 32nd three months earlier, which covered the 12 months through March 2012.
Wisconsin continued to trail the national rate of job creation, as it has since July 2011. The United States created private-sector jobs at a rate of 1.9% in the latest 12-month period, nearly double Wisconsin’s 1.0% rate, the data show.
“It’s like déjà vu all over again,” said Dale Knapp, director of research at the Wisconsin Taxpayers Alliance, a nonpartisan pubic policy group in Madison.
While management of the economy and job creation are politically charged issues in Wisconsin, not least ahead of next year’s governor’s race, Knapp and others were quick to point out that Wisconsin’s subpar performance is hardly a new phenomenon.
“These are persistent patterns we’ve seen over a long period of time,” said Charles Franklin, a social scientist and data specialist at Marquette University.
Since the turn of the century, Wisconsin appears to have a natural “speed limit” in its private-sector job creation that is capped at about 35,000 jobs per year, regardless of political leadership, Franklin said. That compares to many years in the 1990s when the state’s annual job-creation number was closer to 60,000, Franklin said.
According to Knapp, hiring in the state under Republican Gov. Scott Walker, who took office in January 2011, has shown a virtually identical pattern to 2004-’07 — the non-recession period that fell during the two terms of his Democratic predecessor, Jim Doyle.
Separately, last month the Wisconsin Taxpayers Alliance published a long-term study, which examined a 13-year period from 2000 to 2012, showing that sluggish job creation has characterized the state since the start of the millennium.
Most credible figures
Economists consider Wednesday’s job creation figures, known as the Quarterly Census of Employment and Wages, to be the most credible and comprehensive available. The report breaks out data for the nation as a whole as well as each of the 50 states. It tracks the economy in rolling 12-month increments, measured every three months.
The quarterly data are based on a census of 96% of the nation’s employers in the public and private sectors. That makes the figures far more reliable than monthly jobs data, which are based on a sample of only about 3% of employers, leaving monthly estimates prone to large margins of error.
Because the quarterly data are comprehensive and time-consuming to compile, they are released with a half-year time lag. In the past, the lagging schedule meant the quarterly data got less attention than monthly numbers.
However, job creation has emerged as a politically potent issue in Wisconsin. And ever since the special gubernatorial recall election in June 2012, when economic management emerged as a central political issue, the quarterly report has been closely watched by the state’s politicians and economic policy strategists.
When he ran for office, Walker framed his economic program around a vow that Wisconsin would add 250,000 private-sector jobs by the end of his four-year term.
Under the pace of job creation since he took office, Wisconsin is unlikely to achieve Walker’s job creation goals during his first term, Franklin and others pointed out.
Walker’s target would be ambitious under almost any circumstances. To hit it, the state would need to sustain a pace of job creation for four years similar to the best years of the 1990s — prior to the bursting of the dot-com bubble, China’s 2001 membership in the World Trade Organization, and the insecurities that accompanied the post-9-11 era of security jitters, Franklin said. Even in the 1990s, however, the state didn’t consistently spawn the 62,500 private-sector jobs per year that would be needed to create a quarter million new jobs in a single four-year period, Franklin said.
“It’s worth noting that the state shows stable job growth,” nothing spectacular but also not a reverse into job losses, Franklin said.
Franklin analyzes Wisconsin’s long-term employment and demographic data to complement the statewide public opinion polls that he routinely conducts for the Marquette Law School.
Reading data differently
In a news release Wednesday, Walker’s office focused on the absolute number of jobs created, which would place Wisconsin 25th out of the 50 states. Wisconsin ranks 20th in population, however, so its job-creation ranking didn’t quite match its size. And even under that ranking, Wisconsin slid from its non-population-adjusted job-creation ranking of 22nd in the previous quarterly report.
“Our economic and fiscal reforms are working and Wisconsin continues to move forward in the right direction with a growing economy and more jobs,” Walker said in the statement.
Democrats jumped on the quarterly report. “Again today, Wisconsin received bad news on job creation,” said Peter Barca (D-Kenosha), Democratic leader in the state Assembly. Barca emphasized that Wisconsin’s ranking of 37th compared to 15th for neighboring Minnesota, and that “Minnesota has created more than twice as many private sector jobs as Wisconsin.”
For short-term political purposes, both parties routinely “cherry pick” the numbers that suit their needs, Franklin said. But neither party appears to deal honestly with Wisconsin’s persistent underperformance in job creation compared to the 1990s, Franklin said.
Apart from partisanship, economists have cataloged the non-political reasons why the state is a chronic laggard in job creation — reasons that have little or nothing to do with whatever party controls the Statehouse and governor’s mansion.
Those observers point out that the state is saddled with some aging industries such as paper mills, printing plants and metal foundries that often date back more than a century; neither entrepreneurship nor venture capital funding is as abundant in Wisconsin as in many other states; and Wisconsin’s schools don’t generate as many college-educated residents as other states.
“The structure of this economy is playing a role, regardless of partisan control,” Franklin said.
Also read PolitiFact’s rebuke of Walker’s claim that “minimum wage jobs are overwhelmingly for young people” at: