Wisconsin Employment under Walker

Continued stagnation in July.

Wisconsin’s Department of Workforce Development (DWD) released today figures for July employment (release here).

jul14pix0

Figure 1: Log private nonfarm payroll employment in United States (black), and in Wisconsin (red), both seasonally adjusted, and normalized to 2011M01=0. Source: BLS for US, and DWD for Wisconsin, and author’s calculations.

jul14pix1wi

Figure 2: Log nonfarm payroll employment in United States (black), and in Wisconsin (red), both seasonally adjusted, and normalized to 2011M01=0. Source: BLS for US, and DWD for Wisconsin, and author’s calculations.

There were downward revisions to both series, pushing down the already pathetic June growth rates.

(Note that the more volatile estimates derived from the household survey indicate a loss of 1.4 thousand jobs in July, on a seasonally adjusted basis.)

Since January 2011, Wisconsin private nonfarm payroll employment growth has been a cumulative 2.8% lower than that for the United States as a whole, while NFP has been 2.1% lower.

According to these figures, private employment is now 105.1 thousand below the trend consistent with his promise to create 250 thousand net new jobs by the end of his first term (reiterated one year ago).

These figures are likely to be revised downward when the Quarterly Census of Employment and Wages (QCEW) numbers are released (see here). Recall, Governor Walker was for the QCEW before he was against the QCEW…(or at least preferring the establishment survey).

jul14pix2wi

Figure 3: Private nonfarm payroll employment in Wisconsin (red), linear trend consistent with 250,000 net new jobs by 2015M01 (dark gray), and employment forecast from Wisconsin Economic Outlook (March 2014), quadratic interpolation. Source: DWD, Wisconsin Economic Outlook, and author’s calculations.

In order to hit the target by January 2015, the Wisconsin economy will need to generate 22.6 thousand net new jobs in each of every month until January. Mean job creation over Governor Walker’s term thus far has been 2.7 thousand per month. This suggests that it is unlikely that the goal will be achieved.

Data on Kansas, which has experienced stagnant employment in recent months [1], has not yet been released. I will update as soon as they are available. For depiction of June data for CA, MN, KS, relative to WI, see [2].

Update, 11:30AM 8/15: The Wisconsin GOP has their take on the employment situation: “Wisconsin is Back On, More Jobs Created Under Scott Walker”.

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34 thoughts on “Wisconsin Employment under Walker

    1. Menzie Chinn Post author

      AS: Oklahoma numbers, like Kansas, are not out yet. I suspect OK will have pretty high growth rate due to oil production. Earlier Kansas figures can be seen in the link I provided in the post.

  1. Samuel

    I feel pity the PR person who has to write these releases for the Wisconsin Dept. of Workforce Development. Each month the task becomes burying the lead numbers that should be in the headline somewhere deep in the body of the text. Each month I have to read it two or three times before I find the headline number:

    To quote: https://dwd.wisconsin.gov/dwd/newsreleases/2014/unemployment/140814_july_state.pdf

    WISCONSIN EMPLOYMENT & UNEMPLOYMENT ESTIMATES ANNOUNCED: JUNE REVISED, JULY PRELIMINARY
    MADISON – The Department of Workforce Development (DWD) today released the U.S. Bureau of Labor
    Statistics (BLS) revisions for June and preliminary estimates for July, covering unemployment and
    employment statistics for the state of Wisconsin. In brief, the estimates show:
     Place of work data: Seasonally adjusted private sector job growth of 3,200 from June to July and
    36,100 since July 2013. The year-over-year gains in private-sector, manufacturing and total nonfarm
    were outside their respective margins of error.
     Place of residence data: A preliminary seasonally adjusted unemployment rate of 5.8 percent in July,
    down from 6.8 percent in July 2013 and up from 5.7 percent in June. The rate is below the national
    unemployment rate of 6.2 percent. The national rate also grew by 0.1 percent, from 6.1 percent in
    June.
    DWD Secretary Reggie Newson issued the following statement: “The year-over-year comparison shows
    statistically significant private sector job growth, including notable gains in manufacturing, particularly in durable
    goods. In addition, the state’s unemployment rate dropped a full percentage point over the past year and 2 full
    points since December 2010. Looking ahead, the state’s long-term job creation trajectory is one of growth and is
    consistent with many other economic indicators that show the state’s economy is heading in the right direction.”

  2. Samuel

    Maybe turning away investments (rail, Medicaid expansion, etc. ) does hurt the state. This is not the Wisconsin I used to know.

  3. xo

    Hey Menzie, can we see the trend line back farther, say to 1990, or even 2000? I want to look at how WI did before Walker a little more. thanks!

  4. Bruce Hall

    Look at the “bigger picture”:
    https://www.google.com/publicdata/explore?ds=z1ebjpgk2654c1_#!ctype=l&strail=false&bcs=d&nselm=h&met_y=unemployment_rate&fdim_y=seasonality:S&scale_y=log&ind_y=false&rdim=country&idim=country:US&idim=state:ST5500000000000:ST2000000000000:ST0600000000000:ST1700000000000&ifdim=country&tstart=1137301200000&tend=1402804800000&hl=en_US&dl=en_US&ind=false

    Now, what’s the problem with Wisconsin and Kansas? Those two states seem “normalized” while the rest of the U.S. ….

  5. Scott

    Bruce, 40 of Wisconsin’s 72 counties have shrinking populations. Unemployment numbers always look lower when residents leave to seek employment elsewhere. Also due to lost jobs, Social Security and SSDI recipients have increased in Wisconsin.

    1. Bruce Hall

      County populations will vary depending on type of industry that dominates. Here in Michigan, we lost population between 2000 and 2010 because the automobile industry fell apart. This was under a high-tax Democratic Party governor. Wisconsin mirrors Michigan in many respects, both geographically and dependence on old-line industries.

      Regardless, it is rather disingenuous to trumpet lower unemployment when it suits political bias and dismiss it when it doesn’t. This seems to be the case here where improvements in employment rates [the flip side of unemployment rates] tell the story one wants to tell. But, I’ll grant that unemployment rates do not vary because of the same cause. More people working; less people seeking employment.

      So how about employment? https://www.google.com/publicdata/explore?ds=z1ebjpgk2654c1_#!ctype=l&strail=false&bcs=d&nselm=h&met_y=employed&fdim_y=seasonality:S&scale_y=log&ind_y=false&rdim=state&idim=state:ST0600000000000:ST1700000000000:ST2000000000000:ST5500000000000&ifdim=state&tstart=1168837200000&tend=1402804800000&hl=en_US&dl=en_US&ind=false

      Nah, not much there.

      So how about labor force? https://www.google.com/publicdata/explore?ds=z1ebjpgk2654c1_#!ctype=l&strail=false&bcs=d&nselm=h&met_y=labor_force&fdim_y=seasonality:S&scale_y=log&ind_y=false&rdim=state&idim=state:ST0600000000000:ST1700000000000:ST2000000000000:ST5500000000000&ifdim=state&tstart=1168837200000&tend=1402804800000&hl=en_US&dl=en_US&ind=false

      Nah, not much there either.

      Maybe if the labor force and employment have remained relatively static, the change in unemployment rates is meaningless.

  6. Peter

    I would like to frame the argument in a somewhat different way than it often gets made. It’s not as sexy an argument, but it has a similar overall conclusion while also touching on the political damage Walker has done to the state.

    Walker and the legislative Republicans took the state through hell in early 2011 and into 2012 by implementing an agenda that didn’t just make war on the public sector as an ideological point, which is actually acceptable from a policy perspective, but rather was designed to go after the public employee unions as political organizations. What’s more is that he didn’t exactly “share the pain.” It was all concentrated on public workers, and to some extent lower income workers with reductions in the Wisconsin EITC. I want to contrast this with California where Jerry Brown spread the pain all over the place with tax increases on high-income earners, cuts to public employee benefits, etc. Walker only punished his political foes. That’s not courageous. It’s petty.

    Since that time, Walker has practiced austerity at the state and local level with very tight controls on property taxes as well as income tax cuts while strangling public sector pay and benefits as well as programmatic spending. He’s cut taxes so radically that we went from a structural surplus at the end of his first budget, admittedly an impressive achievement, to a deficit for this upcoming budget. That’s before, by the way, what appears to be a significant revenue shortfall in this last fiscal year. So, we have really nothing to show for that pain on the fiscal front. He squandered gains he could have made by being reckless with tax cuts. Not exactly politically courageous there.

    As far as economic performance, the best you can say is that Wisconsin has been mediocre. It had a lower unemployment rate during the recession than the nation as a whole and has kept that during the recovery, which began in 2010 with modest job gains in Doyle’s last year. It’s not exactly like Walker came in and growth suddenly started getting better. If anything, the growth has moderated and is on a downward trajectory. Since it hasn’t kept pace with the U.S. overall pace of recovery, it’s hard to say that we’re growing in spite of the U.S. and we’re also either growing in line or lagging behind peer group states. It’s hard to argue that Walker’s economic policies have had any demonstrable positive effect.

    What this all gets to is that there are no positives that one can point to that are out of the ordinary for being in a modest overall national economic recovery and you have the negatives of a reckless and intensely politically petty governing style that has left the state’s politics possibly irreparably harmed with bad blood and bickering for years to come. We will also likely see damage down the line from severe underinvestment in education and local infrastructure. If we were in the midst of a national recession with huge job losses and multi-billion dollar budget deficits, his record would look even worse. There would be nothing at all to point to. He’s able to slightly mask his failures with the ever so slight upward current in the economy. Were that not there, he would be an appalling failure.

    1. Jake formerly of the LP

      I live here. Peter’s analysis could not be more correct. These policies have nothing to do with job growth, and have everything to do with transferring power to Walker and his campaign contributors at the expense of everyone else.

      It is fiscally and socially reckless, and it turned a state that was top third for job growth in the year before Walker took office, to bottom third is jobs and income growth since Walker took office. Numbers and facts matter

  7. PeakTrader

    The Wisconsin economy seems to be performing relatively well in this national depression. It not only has a better unemployment rate than the national average, 5.8% vs 6.2%, it also has a better labor force participation rate, 67.8% vs 62.9%.

    And, Wisconsin went from budget deficits to a budget surplus recently.

    Tough choices are needed, e.g. closing the disparity between overpaid government and union workers, and underpaid non-government and non-union workers.

    I’d like to see Wisconsin use the budget surplus to cut taxes for all workers, raise the minimum wage, and get more bang for the government buck.

    1. Phil

      Managers in the State workforce can’t find qualified applicants that will take the jobs at the salaries they offer. This forces the managers to offer more to the people who are coming in than the people who already know and do the work. That, in turn, increases turnover, which decreases efficiency and increases costs.

      I know. I work for the State of WI and I see it every day.

      Pay AND benefits are not near the market prices for the same skills. That is why I am going to the private sector at the end of the year.

      1. PeakTrader

        So, you’re going into the private sector for a while and then get hired for a state job at higher pay than before?

  8. dilbert dogbert

    I hope everyone remembers that Prof Chinn’s point is about how much WI’s jobs performance has fallen short of Walker’s promises. Walker’s policies have not delivered on his promises. That said, a Walker Brownback team for 2016 will make America great again.

      1. Hans

        PT, no answer from DD, who is enjoying his state declining
        population…

        Just remember “folks” that the Badger State is still significantly red..

  9. Ricardo

    “In Wisconsin, teachers make $89,000 in salary and benefits, compared to $48,000 for all other workers in the United States.”

    1. baffling

      ricardo,
      teachers hold a college degree (many with advanced degrees) and are dominated by baby boomers with many years of service-ie higher pay. you want to compare the college educated teacher who looks after the future generations with a bunch of other workers with/without degrees who may have no interest in the next generation? what a stupid quote to put in these comments!

  10. Joseph

    Ricardo:“In Wisconsin, teachers make $89,000 in salary and benefits, compared to $48,000 for all other workers in the United States.”

    Ah, yes. Let us count the lies in the above statement. First off, you can look here and see the numbers for yourself.
    http://lbstat.dpi.wi.gov/lbstat_newasr
    The average teacher salary in Wisconsin is about $50,000. The average benefit is $21,000 for a total of $71,000, not $89,000.

    The second lie, and you see this all the time, is to compare salary plus benefits of teachers to just salary for other workers. So if we go to the BLS we find that the average wage for all workers in the U.S. is $22 an hour or about $46,000 a year, not that far from the average teacher with a college degree at $50,000. The BLS says the average benefit is $10 per hour or about $21,000 a year, which is the same as for teachers.

    When you eliminate Ricardo’s lies, it turns out that teachers in Wisconsin are paid about the same in salary and benefits as the average worker in the U.S.

    That raises the question, why would Ricardo lie to you? Is it because Ricardo is stupid and doesn’t realize that he is lying? That’s certainly possible, but it is just as likely that Ricardo knows he is lying and has enough contempt for the reader’s intelligence that he thinks he can bluff and bluster. It’s hard to decide between the two.

  11. Ricardo

    Joseph,

    I should have said the salary amount was before Walker’s budget. You are correct that now teacher salaries have declined.

    Your second point seems to be directed at those who compare executive salaries to entry worker salaries rather than at me quoting the same logic from an article on Wisconsin teachers.

    But you make a good point. If teacher salaries in Wisconsin continue to return to a normal level the budget can be reduced and the private sector will recover. Thanks.

    1. baffling

      ricardo, you think most other jobs are more important than teachers? is that why teachers should be paid less? not sure why there is an element of society who is so against educators, constantly trying to devalue their contributions. i certainly value the work of teachers, and would rather pay them fair wages. how much do you value teachers-ie what is your fair wage value? and is it high enough to attract competent people?

  12. Joseph

    Ricardo: “I should have said the salary amount [$89,000] was before Walker’s budget.”

    You just keep digging deeper, doubling down on the lies. You can go to the same Wisconsin Dept. of Instruction source and look at teacher compensation for 2010, before Walker took office. The average teacher salary was about $49,000 and is now $50,000, so salary has gone up under Walker. The average benefit was about $25,000 and is now $21,000 so has gone down under Walker due to cuts in pension and health insurance. But at no time did average teacher wage and benefits come even close to $89,000. That’s a flat out lie.
    http://lbstat.dpi.wi.gov/lbstat_newasr

    Ricardo: “Your second point seems to be directed at those who compare executive salaries to entry worker salaries.”

    No, the lie is people like you who compare the salary plus benefits number of teachers to the salary minus benefits number of the average worker. Benefits make up $21,000 of compensation for the average worker. If you include them for teachers and exclude them from the average worker, you intentionally skew the comparison by a large amount. If you look at just salary, then teachers and the average worker make about the same. If you include benefits for both teachers and the average worker, again they make about the same. But it is an intentional misrepresentation (lie) to include benefits for teachers but exclude them for the average worker.

    1. john

      Ricardo is the kind of person who would like to see civil servants working for minimum wage and living in cardboard boxes

  13. Joseph

    John: Ricardo is the kind of person who would like to see civil servants working for minimum wage and living in cardboard boxes.

    Hey, everyone is entitled to an opinion, even if it is a self-interested one. It’s the lying (or willful stupidity) that gripes me. False statements pollute civil discourse and need to be refuted, a waste of time and effort.

  14. Ricardo

    Joseph,

    It is obvious that you did not see the quotes and the bold face meant nothing to you. My comment was a quote, not my opinion.

    Once again Alinsky personal attacks do nothing to move knowledge forward. I hate arguing “how many angels can dance on the head of a pin” when the economy is reeling because of fallacious economics..

    Source: http://www.politifact.com/truth-o-meter/statements/2011/feb/23/eric-bolling/fox-business-news-eric-bolling-says-wisconsin-teac/

    1. Menzie Chinn

      Ricardo: I must concur with Joseph: Your comment made it clear you were taking the statement:

      “In Wisconsin, teachers make $89,000 in salary and benefits, compared to $48,000 for all other workers in the United States.”

      at face value, and now that it has been revealed to be mostly false in the article you cite, you are trying to have it both ways by denying you were quoting it as fact.

      However, unlike Joseph, I am unsurprised by this disingenuous type of behavior. I suggest to eliminate noise, you include the source for your quotes, so we can immediately understand what you are doing.

    2. baffling

      ricardo, why do you think it is logical and acceptable to compare the average wage of public sector teachers (all of whom have undergraduate and graduate degrees) with a population of private sector workers with a much smaller percentage of college graduates? it was stupid of eric bolling to state it the first time-and ideological of you to repeat it on this site. this is why you are constantly chastised when commenting on this site.

  15. Joseph

    Ricardo: It is obvious that you did not see the quotes and the bold face meant nothing to you. My comment was a quote, not my opinion.
    Source: http://www.politifact.com/truth-o-meter/statements/2011/feb/23/eric-bolling/fox-business-news-eric-bolling-says-wisconsin-teac/

    Wait, so now you tell us that you dropped a quote, without indicating a source, into the discussion. And now, when you finally provide the source link for your statement, the very source where you got the quote indicates that the statement you posted is false. And your excuse is that you didn’t say it, someone else said it, even though your own source said the statement you quoted was false?

    You are even more brazenly dishonest than I thought. There is really no point in ever taking seriously anything you write in the future on this site. You have outed yourself as a unrepentant liar. Menzie Chinn was being kind when he suggested you might just be stupid. It turns out that you are also acting with deliberate malevolence.

  16. Ricardo

    Menzie (and Joseph),

    I was only following your lead. You often quote others without taking a position yourself.

    1. Menzie Chinn

      Ricardo: Speaking for myself, I will say you have once again tried to misdirect. The point is not whether one takes the position or not; it is whether one provides a link to the quote so one can see where it came from, what veracity it has. I always provide links to quotes where the statement is on the web. If not, I provide a reference (author name, title of publication). If you can find an instance where I have not, then provide that instance. The fact that you did not provide a source the time you quoted the statement indicates that you meant to mislead. That is the core and central issue at hand.

      In other words, you have been caught out. You should just fess up, instead of contorting yourself in a vain (and quite pathetic) attempt to escape conviction.

      Try it once again, and you will be the sole topic of the next blog post on mendacious quotations.

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