With update links to CBO and the CEA comment on the minimum wage.
Despite the likely benefits, policymakers in Wisconsin make statements such as the following (from Fox6Now):
“I’m not a big supporter of artificially increasing the minimum wage. I think the marketplace is a much better way to go,” [Wisconsin Assembly Speaker Robin] Vos said.
The cumulative growth gap since January 2011 between the US and Wisconsin coincident indices was 2.2% in December. The forecast indicates a continued widening to 2.8% in six months time.
Governor Walker delivered his State of the State address tonight (video here). From the press release:
“Tonight, we are laying out a plan to move Wisconsin further down the road to prosperity,” Governor Walker said. “Our friends and neighbors are going back to work and job creators are expanding their businesses. Thanks to sound fiscal management, I am proud to announce further tax relief for Wisconsinites and additional funding for worker training. We will continue to work diligently until everyone who wants a job can find a job.”
From Davey, “Twinned Cities Now Following Different Paths,” NY Times today:
“It’s staggering, really, like night and day,” said Lawrence R. Jacobs, a political scientist at the University of Minnesota. “You’ve got two states with the same history, the same culture, the same people — it’s kind of like they’re cousins. And now they’re looking across the border and seeing one world, then seeing something else entirely on the other side.”
Figure 1 shows private employment relative to trend implied by Governor Walker’s pledge of August 2013 to create 250,000 net new jobs; Figure 2 shows employment normalized to January 2011 for Wisconsin, as compared to Minnesota and the Nation.
The Philadelphia Fed coincident indices for October are out. Figure 1 presents the log series, normalized to January 2011 = 0.
Two numbers to remember: 84 thousand and 107 thousand
Makes little impact on trend relative to promise, and relative to the Nation
In a previous post, I compared economic outcomes in two states that implemented contrasting fiscal policies: California, which surged ahead while raising taxes and cutting spending, and Wisconsin, which lagged far behind as it slashed spending on education, and cut taxes. Latest estimates of current economic activity, and forecasted economic activity six months out, indicate continued lagging performance for Wisconsin.
Consider the following graph, with both series (coincident series for economic activity) normalized to 2011M01=0.