Wisconsin Employment: October 2013

Two numbers to remember: 84 thousand and 107 thousand

The first number is the amount by which actual October employment lags Governor Walker’s promised path; the second is the amount by which the Administration’s own forecast for January 2015 lags Walker’s promised 250,000 net new jobs figure.

Figure 1: Private nonfarm payroll employment for Wisconsin, seasonally adjusted (blue), July 2013 Wisconsin Economic Outlook forecast, interpolated from annual data using quadratic match (red), and Walker’s promised path for private NFP (black). September and October private NFP from WI DWD. NBER defined recession dates shaded gray. Source: BLS and DWD, Wisconsin Economic Outlook, and author’s calculations.

38 thoughts on “Wisconsin Employment: October 2013

  1. dilbert dogbert

    Menzie you have discovered a natural law. Politicians over promise. It is fun, however, to hold them up to ridicule when reality bites them in the butt. Have fun!

  2. Anonymous

    This kind of reminds me of Krugman’s expected path when we were told that massive stimulus bills would increase employment rapidly (except that Krugman of course never puts any numbers to his forecasts so that he can never technically be called wrong).
    Walker’s expectations, as well as Krugman/Obama’s, are just further evidence that the government has no idea what they are doing when it comes to the economy and should just leave commerce alone as much as possible.

  3. baffling

    krugman made it very clear we needed massive stimulus, and he also made it very clear the program provided was not large enough. he has given indications of the size needed relative to gdp-and we were not close. people unintentionally (and intentionally) used the absolute size of the stimulus to say it was very large. but in terms of %gdp, all those zero’s get normalized and you better understand the impact. Krugman was spot on with this point.
    now the question becomes, wisconsin is well below prediction, and still below pre-recession levels after several years. who’s fault is this? the state or the federal government?

  4. Dr. Morbius

    It gets worse when you take the numbers apart. Not only are we adding jobs below the national rate, and the regional rate, but the jobs being added are, for the most part, low-wage, low-skill jobs.
    Comparing the nature of Wisconsin employment at the January 2008 peak to the latest report, there are only four job classes that have increased in that nearly five year period: 35,000 additional Leisure & Hospitality jobs (14% growth); 12,000 additional Educational & Health Services jobs (3% growth); 26,300 more Professional & Business Services (9.5% increase); and Mining which added a total 400 jobs (10.5%).
    It is further important to note that the Professional & Business Services jobs are not all lawyers, accountants and consultants; the largest single category is for waste mgt. workers, guards, and landscapers–and this is the only category that grew at all in 5 years.
    The pitiable 400 added mining jobs in the face of the massive expansion of sand mining only goes to underscore how capital-intensive mining actually is.
    Meanwhile, Construction is 17,000 (20%) jobs behind its 01/08 amount; Manufacturing is 36,000 (7.2%) behind. Even financial activities is only equal to the jobs provided five years ago.
    Remarkably, State Government has gained 1,500 jobs since 2008
    (all figures compare the non-seasonally adjusted figures for 12/31/07 with 09/30/13 — seasonally adjusted figures are not available from the DWI before 2010.)

  5. Ed Hanson

    You have well documented Walker’s over promise of job growth in Wisconsin.
    Is this simply a political exercise or based on what you consider an important principle about political actions and truthfulness?
    If the latter, I would ask you to rate the following in order of egregiousness.
    A politician’s as campaigner promise not kept such as Walker’s. A promise that either did not admit to or did not realize that there are more powerful external forces which would dominate any policy’s result.
    A politician’s as elected office holder promise not kept of a result of program if enacted – the stimulus package must be passed to keep unemployment rate below 8%. A promise that either did not admit to or did not realize that there are more powerful external forces which would dominate any policy’s result.
    A politician’s as office holder promise not kept of result when that politician had complete power and control to keep that promise by regulation. The many permutations of – if you like your health insurance you will be able to keep it, period. ObamaCare promise.
    A politician as office holder when in the minority without power makes an impassioned speech of principle against a historical change of a Senate rule by a simple majority vote. A principle not kept when that politician now with power of the majority, makes that change of Senate rules by a simple majority over ruling the Parliamentarian. Filibuster rules.

  6. baffling

    ed hanson,
    i think menzie is making a direct statement regarding the policies of Governor Walker over the years. alluding to the other items you mentioned, even if they are YOUR priorities, are not at all what menzie was talking about. you are simply creating a distraction.
    menzie is clearly making a statement about a particular individual, his policies and their outcomes.

  7. Anonymous

    I hear this excuse all the time: If only the stimulus were much larger! Then unemployment would be at 4.5%!
    This is ridiculous: Krugman wanted us to spend $1.1-1.3 trillion in the stimulus bill, just $300-500 billion more than what was actually spent. Since the actual $800 billion bill did not work, there is no reason to believe that the additional $300 billion would have made unemployment plummet to 4-5%.
    The reason for this is diminishing marginal utility. We were already going massively in debt after the Bush years, therefore, the incremental dollars had virtually no effect on the economy, and an additional $300 billion would have had an even smaller effect!

  8. baffling

    anonymous, if as you stated krugman never puts numbers to his predictions, where did your numbers come from? be honest in the future.
    and last time i checked, a difference of $300 billion on an $800 billion stimulus is 38%! and that is the smaller estimate. this is not an insignificant difference in required stimulus. you cannot put a house fire out with just a percentage of the total water required. if you do not reach a required minimum, you may as well not have even wasted the water. such is the nature of crises-they have minimum requirements.
    and most people did not claim 4.5% unemployment. you are mistaking krugman for the paul ryan and heritage budget which required sub 4.5% unemployment to close the budget.
    “Since the actual $800 billion bill did not work, there is no reason to believe that the additional $300 billion would have made unemployment plummet to 4-5%.”
    you think it had no effect? so unemployment would be lower and the recovery would have been stronger without the stimulus? just like the folks today who believe the fed raising interest rates would stoke the economy. baffling.

  9. dilbert dogbert

    Your engagement with commenters is the reason I keep coming back to read your Blog.
    I don’t know squat about economics but really enjoy the “food fights” between the contending parties.

  10. Anonymous

    jonathan The comparisons with neighboring / regional states / competitors is more interesting.
    Indeed. And one neighboring state is Iowa, which has another conservative governor with economic beliefs very similar to Gov. Walker. In his 2010 comeback campaign Gov. Branstad promised 200,000 jobs in five years. As his re-election campaign got underway he claimed to have added 160,000 jobs, or 80% of the way towards that 5 year goal. He then revised that to claiming he was on track, with adding 128,000 jobs (64% of the way) through the first three years of his five year promise. Well, it turns out that the BLS data shows he only added 48,200 in his first 3 years. Why the difference? Because in Republicanland you only count the new jobs added and you don’t count the job losses. So the latest version of the 200,000 growth promise is that it’s only a gross new jobs number, not a net new jobs number. Maybe Gov. Walker is using the same conservative Republican math.

  11. Randall Parker (@futurepundit)

    Menzie, I wasn’t aware that governors had sufficient power to battle huge macroeconomic forces (e.g. migration of people to warmer weather states, concentration of high tech into fewer geographic locations, outsourcing, foreign competition, high national consumer debt, declining national labor market participation) and win.
    Try building a model that shows all the factors that influence a state’s economic rise and fall. Obviously more work than partisan rants. But do you want to be a social scientist or not?

  12. jonathan

    The NYT has an article today (11/23) about the differences between MN and WI. MN raised taxes, with most falling on their top 1% of earners … and is the 5th fastest growing economy and the 8th best state for business, due in part to its commitment to education. WI is 34th for growth and is in the bottom half of Forbes state business rankings. There is more in the article.

  13. Hans

    My previous post was not posted, however, the Badger state was until a year or two ago, heavily unionized..

  14. Ed Hanson

    I will speculate on some of the questions I asked you.
    Your many posts on Walker of Wisconsin are strictly political in nature, certainly not on promises or economics. Not promises because there are certainly greater broken political promises with greater impact than Walkers 250,000 jobs.
    And certainly not economics, because you would concentrate your post on the policies Walker ran on, reduced taxes, reduced state regulation, and reduced power of public sector unions. But, of course, you realize that although you disagree with those policies, you know they have substantial appeal. And to run a truthful campaign by your progressive side of higher taxes, more regulation, and more money and power to the public union constituency would likely not be effective.
    Something about Wisconsin and unemployment I happen to learn through research. Unemployment is a greater problem in the more populous states. Wisconsin is a high population state, 18th largest but only two states of greater population of a lower unemployment rate, Texas and Virginia. Well done Wisconsin.
    And no need to comment on the other promises and principles not kept I listed, after all, there can be no enemies on the left.

  15. tj

    Why don’t you obsess on Obama’s promise to double exports in 5 years the way you obsess on Walker’s promises?
    Also, why don’t you reveal “baffling” and his various other aliases the way you reveal ricardo’s former alias? Your behavior is perfectly consistent with the liberal practice of bullying and intimidating those who disagree with the progressive agenda.
    Since when do political differences justify the type of bias you consistently display on this blog? As a professor, you are supposed to be setting an example for your students, you are a mentor, so to speak. Pretty sad for your students who trust you.
    The U.S. trade gap was little changed in August at $38.8 billion, the Commerce Department reported in October, as imports and exports stalled. The president announced an initiative in 2010 to double U.S. exports between 2009 to 2014, to $3.14 trillion. They totalled $2.2 trillion last year.

  16. tj is baffling

    there are no aliases i use other than to target my name towards a particular person’s response. deal with it.
    you guys need to realize something, Menzie is in charge of a blog and he can operate it any way he sees fit. do you cry to faux news about their “fair and balanced” “no spin zone” network? they are biased and hide behind the constitution’s freedom of the press.
    did it ever occur to you menzie needs to protect the blog from some very biased commentors on this blog-including you tj. otherwise it becomes a very biased blog, just consistent with your own world view. i bet you wouldn’t cry if that happened. you don’t like his blog, you can start your own blog-if you think people are that interested in what you have to say.

  17. benamery21

    Per Hans, I also have seen several comments not appear which were submitted within the past several days on recent posts. Usually Menzie/JDH are excellent about this (can’t beat the price, either) so I wonder if there has been some recent IT problem?

  18. tj

    there are no aliases i use other than to target my name towards a particular person’s response. deal with it.
    Then why did you reference earlier posts shortly after you showed up? It was obvious you’d been posting here before.
    The Fox News Channel is all opinion in the evening. It’s no different than MSNBC or CNN in that regard. Imagine the left-biased information we would get if there was no Fox and no talk radio.
    To his credit, Menzie allows disagreement on this blog. However, as an educator, you would think he’d try to be more balanced. It’s rare for Menzie to make a serious attempt at discrediting any of Obama’s policies, like the failed doubling of exports above. He simply ignores it, or tries to shift the blame to republicans.
    Imagine how many times Menzie would dredge up Obama’s claim that there are 57 states, if Bush had said it!

  19. JDH

    benamery and Hans: I regret that we’ve been getting a real blizzard of spam comments lately (approximately one each minute), and sometimes end up deleting comments en masse without as much care as used to be the case. If you ever submit something that didn’t go through within 12 hours, please just resubmit.

  20. tj is baffling

    tj, sorry to bust your conspiracy theory world but you are simply incorrect. No alias here. There have been a couple of times where I may have typed in another commenters name-who I was responding to-but that is simply a function of needing to fill out the name tag on each comment coupled with sloppiness. But certainly no conspiracy. The guys in black suits are not following you-yet!
    And I don’t see how Menzie being an educator has any influence on how he operates this blog. I don’t assume this blog is required reading? Or you could hold the same anti bias perspective on all parents-must they also obey your rules with their children?
    tj your comments are simply a subtle attempt to censor menzie. He is free to express any viewpoint he desires.

  21. randomworker

    The internets are awash in “OMG Obummer promised X and he lied!!!” posts on thousands of different blogs. The fact that you don’t read that here is not a loss to you, I assure you. There are places you can go to get your fill of that kind of thing.
    People are rarely held accountable for their words or deeds. I applaud this small attempt to hold Walker accountable. Who knows, he may be the GOP nominee for President in 2016. Stranger things have happened. So while everyone is engaged in a paroxysm of outrage over the Affordable Care Act, we still need to watch what’s going on in Wisconsin because just you wait, the “Wisconsin Miracle” (TM) will be the launching pad for Mr. Walker’s presidential ambitions. It will be nice to know the real story.

  22. benamery21

    JDH/Menzie: I’m an IT illiterate, so take this as worth what it cost you, but maybe a captcha on the comment box would be a labor savings?

  23. Ed Hanson

    Randomworker, you wrote in part,
    “People are rarely held accountable for their words or deeds” which you should write “political people” as people dealing in the private world are generally held accountable. But the real point, in this case, should be accountability of deeds not promises of results.
    If Menzie was true to the economic nature of this website, he would concentrate on the policies that Walker, such as reduced tax burden, removal of onerous regulation, and reduced political power of public service unions. These are some of the policies that Walker ran on and implemented. In a previous post, I pointed out that these policies were sufficiently popular to get him elected and win the recall. Menzie does not deal with these policies because politically he thinks the one-liner of 250,000 is more effective than than countering with his policy preferences of higher taxation, greater onerous regulation, and of course, rewarding the high donation source of public unions. Menzie’s post are strictly political in nature.
    Walker assumed that the similar policies as those implemented by T. Thompson in the 80’s would get similar results. What he was wrong about was not realizing the huge external force of the Federal government which this time would work counter to his policies
    detrimental to his state and the nation, unlike the 80’s when the Reagan policies worked in tandem and created a long lasting solid economic result.
    I predict that Walker has learned. He has seen first hand the lawlessness and radicalism of the public unions and other democratic party allies. He has seen what an overbearing Federal government can do to exasperate State problems. Wisconsin is lucky to have him, and will be better for having a Governor more experienced with dealing with anti-business, anti-property, and anti-individual freedom forces that the democratic party has embraced.

  24. baffling

    “What he was wrong about was not realizing the huge external force of the Federal government which this time would work counter to his policies detrimental to his state and the nation, unlike the 80’s when the Reagan policies worked in tandem and created a long lasting solid economic result.”
    What are these huge countering external forces of the Federal government with which you speak? you guys simply make up strawmen to argue against.
    and perhaps you and i lived in a different reagan morning in america. i was a young kid, and in the early 80’s i recall losing many of my friends when the steel mill and related businesses shut down, and everybody moved away one summer. i don’t recall this period as an economic heyday-it was rather dismal. the 90s, on the other hand, were much happier and livelier. apperently you did not live in the same united states of america as i did. i do however recall an exploding debt burden in the 80s. but narnia it was not.

  25. menzie chinn

    tj: My, we are on a paranoid rant these last few days. Re: baffling, there are many people who read without posting. This is clear from the number of visits vs. number of posts. Second, casual inspection of IP addresses associated with baffling and variants indicates that that’s the only moniker he/she comes in under, so unless he/she is extremely diligent, that poster has the courage of his/her convictions to be consistent.

    Now regarding your comments about bias, please recall that this is not a blog on a university server. I don’t require my students to read on a regular basis, and furthermore I take the politics out of the lectures and lecture notes. You can verify this by looking at my course materials which are online. Isn’t that where you expect that objectivity you claim to prize so much of greatest import? Or do you want all professors to make sure their op-eds are similarly “fair and balanced”? In other words, it seems you want all professors to eschew blogging unless the views propounded are of a certain orientation. That’s not the world I want to live in.

    >Let me conclude by asking you to set up your own blog if you find my posts so objectionable. I am sure you will find an audience. I feel confident I know the characteristics of that audience, and the size, but you should feel free to investigate.

  26. Ed Hanson

    So you were a kid in the early 80’s, huh. That surprised me to learn that, from your writing, I thought you were a kid today. I had not brought up the subject of the early 80’s but when Thompson was Governor which was the late 80’s. But that assumed you knew something of what you wrote.
    But I do not mind writing of the early 80’s and beyond. It will help to explain what you do not understand, the huge external force the Federal government is to State policies. The early 80’s were rough. A little background. The clean up of fifteen years of of Federal growth and distortion of the US economy was difficult. But not rougher then the advancing rate of inflation which had grown to 13% and the real effective taxation on the economy that the inflation wrought. On top of the domestic woes, foreign policy was a mess, our traditional strong allies were uncertain of support, and weaker allies were out in the cold after watching what had happened in Vietnam, Central America, and Iran. Reagan went to work.
    The early 80’s. Fiscally, he first accomplished a large income tax rate reduction, but had to work with a democratic party controlled House and non-conservative Senate which reduced the immediate effect of the rate reduction by it being implemented over three years. A compromise that demonstrated he could work on a bi-partisan basis, but also allowed him to enact a vital component of the tax code, indexing the tax brackets to inflation. Monetary policy, his courage was demonstrated when he backed the Fed Reserve when it put the brakes hard on monetary expansion and finally broke the inflationary spiral expectations that was still rampant. He knew from history that a recession was inevitable but would be short due to his tax policy. On foreign policy, he began to repair the uncertainty in both Europe and Latin America. He created a much more united front to counter Soviet expansionism.
    Baff, according to you, you were growing older in the later 80’s, so I need not remind you that Regan continued to reduce tax rates, continued to improve on the results of foreign policy resulting in the demise of the Soviet Union and what I am sure you refer to as the peace dividend. And, above all domestically, the economic growth took off with with historical growth over the next decade and beyond.
    So I hope you now understand a bit more what huge external force the Federal government is. When working in tandem with less taxation rates, lesser regulation, more rule based (less discretionary) monetary policy from the Fed, the States have more control for the results of their own policies. In case you can not see it, today the Federal policy and Wisconsin is not working in tandem.

  27. randomworker

    Ed, you know how to suck the life out of a comment thread! I just don’t have the energy or desire anymore.
    But here’s one thing you wrote to me:
    “These are some of the policies that Walker ran on and implemented.”
    I completely agree!
    And the results have been less than promised. OK, let’s avoid that. The results are that WI lags the national average in many metrics including the all-important job creation metric, how’s that? So my point was, when Walker runs for President of the United States on a 10 point Wisconsin Miracle platform…
    And we can look back at this blog to document that. All the hogwash about the iron boot of Obama on the throat of the heroic Governor Walker notwithstanding.
    And Happy Thanksgiving to everyone! This random worker is eternally grateful for the many blessings bestowed upon him by this benevolent universe.

  28. baffling

    ed hanson, your understanding of the mythical 80’s is quite baffling. the reagan years are not nearly as prosperous as you and others claim. it really is a case of rewriting history. i really get a kick out of your claim that the decade following, the clinton years, were also the result of the reagan era. earth to ed, earth to ed, come in ed!
    take a close look at the tax burden under reagan-it is not the pretty policy you invoke in your fantasy. taxes simply shifted from income tax to another format. although i will agree, there was a significant decrease in the tax burden of higher earners-not so much for the middle class. and lest we forget fiscal responsibility, what happened to the deficit under reagan? look at as percent of gap. i guess in your eyes it dropped, but the numbers will tell you something completely different.
    ed, your days of old crumudgeons dictating the direction of the country is coming to an end. old folks are being displaced by an up and coming generation who have a belief and a path to a better country. it started under the clinton years, was bypassed during the bush-cheney dictatorship, but has re-emerged under obama. i never want to return to the ‘morning in america” years-they were more like morning hangover in america for most of us.

  29. 2slugbaits

    Ed Hanson So much revisionist history, so little time to reply. baffling has already covered much of your errors regarding the Reagan tax plans. I would add that you really need to specify which Reagan tax plan you’re talking about. The 1981 plan that cut top income tax rates but introduced a plethora of inefficient and distortionary tax credits and downright bizarre tax deductions. (Remember the glut of empty office buildings due to special tax breaks he pushed through?) Or do you want to talk about the large payroll tax hikes under Reagan? Or all of the tariffs that Reagan supported? Or the 1986 tax overhaul that was the complete antithesis of everything that inspired the 1981 debacle? If you want to argue that the 1986 tax changes contributed to the 1990s boom, then I might even agree with you. But wait…it was actually a Democratic bill (Sen. Bill Bradley) and initially Reagan opposed it.
    Your understanding of foreign policy is just as bad. What, exactly, did Reagan do to end the Cold War? Yes, defense budgets increased, but they were going to increase no matter who was in the WH because old weapon systems were being phased out while new weapon systems were being provisioned and deployed. Those higher budgets were already locked into Pentagon planning long before Reagan was elected. In fact, operational readiness was actually lower during the early Reagan years than they were during most of the Carter years. If you want to credit anyone with ending the Cold War, you might want to recommend the Pope and the shipyard workers in Gdansk. When Hungary opened its border to the west and the Soviets did not respond, it was only a matter of days and weeks before all of the Soviet satellite countries broke away. Then the Soviet republics (Latvia, Estonia, etc.) quickly followed. As to Reagan looking strong and tall in the saddle, you seem to have forgotten all about running away after those Marines were killed in Beirut. I guess you got distracted by that little Grenada invasion. And do you think arms-for-hostages was a signal of strength? When Reagan left office some crazy colonel in Libya was still alive and well despite attempts to bomb his tent. Have you ever read any of Walter Enders’ papers on the effectiveness of Reagan’s response to the Libyan bombing? They’re also useful exercises in econometrics (transfer models and VARs). So that would be an opportunity to kill two birds with one stone. Not only would you get a useful econometrics lesson, it might teach you something about ineffective and counter-productive policy responses.

  30. Ed Hanson

    Gee I seemed to have rattled some here with a belief different from theirs, perhaps I did something right. But I do not expect a change.
    Where did the idea of an iron boot come from? I certainly never said it, so it must have come from your mind. I encourage you to consider where that idea you have come from. Walker’s ideas and policies do work. I am sorry it does not fit to your emotional needs of immediate gratification.
    I can’t help your socialist beliefs. Only you can. But not if you do not visit your core beliefs. The flame of individual in charge of his own actions and beliefs have always been glorious, rare, and brief in human history. You are on the side of most.
    A strange term you use. “prosperous” I have never been prosperous in my whole life. I have simply lived the best I could for those close to me. The control of this is fleeting and I know this. It is a shame that you think that demanding others whom you do not know, to provide to those they do not know, will when administrated by those who know none, result in a better outcome.
    I do not know you, and never will; and this forum is not the place for deep philosophical and human historical discussion. So I will leave this discussion with questions since you brough up the subject. What is a tax burden? Tax rates are reduced at the margin but the percentage of tax collections from the ever changing economic category (doesn’t matter what you call it the 1% the 5%, the 10% or 20%) is that a greater or less burden compared to who or what?
    You have a right to make history the way you want it. I stand by the same right. Without Thatcher, Reagan, John Paul II, and the countless known and unknown in eastern Europe, Central America, and Asia whose courage and belief in individual freedom from the state, the world would be different today and worse.
    Your history lesson seems to boil down to things are messy, and somehow you think I think it is not. I suggest you look to your own thoughts of a socialist utopia and the relinguishment of power to the State.
    I guess I will also leave you with a question and a suggestion.
    Where are the Bradley’s in your party, capable of finding common ground and ideas. They have been silenced, and if not quiet, drummed out by the power of the mob.
    My suggestion is that you find and read the book Tombstone by Yang Jisheng. It is a well researched description of the human tragedy that occurs when those with the best of intentions and with the power to implement those intentions dictate from top down. It is not the only such tragedy nor even the latest. Just another example of the inevitability when the individual gives control of their life to an overbearing State.
    Have a great Thanksgiving with your families and friends. Perhaps we will meet again at the next political Wisconsin thread by Menzie.

  31. baffling

    ed hanson,
    i think you need to better understand the concepts of a modern country and government. we are not a bunch of individuals looking out for ourselves-this is the ayn rand fantasyland. we are much better off when we work as a collection-it is one of the things which separates us from the animals. this is why cities evolved.
    so when you call me a socialist, it becomes apparent you have no idea what that term really means. you are simply trying to be insulting-without effectiveness. i am a proponent of the modern world, which requires me to interact with my fellow man. of course there is a give and take between me and my fellow countryman-i would not have it any other way. that is a SOCIETY. your individualism has been taken to an extreme-rand style. it results in living alone in the mountains aiming a shotgun at whoever crosses one’s property line-a quite dismal life for sure.

  32. Ricardo

    Menzie’s new Schadenfreude.
    Once it was deaths in Afghanistan under George Bush but now with record deaths under President Obama, Wisconsin is more comfortable for him.

  33. Ricardo

    Under Democrat Governor Jim Doyle employment crashed in Wisconsin. Now under Walker Wisconsin has had steady employment growth. Hmmmmmmm?

  34. Menzie Chinn

    Ricardo: I challenge you to find one mention by me of casualties in Afghanistan under President Bush. In other words, you are, as usual, completely off base. It’s truly remarkable — how do you manage to be so consistently wrong.

    Recall, Iraq was a war of choice (despite your allegations of Iraqi WMDs even after the Bush Administration has given up on them). Afghanistan is where Al Qaeda was actually based.

Comments are closed.