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The 58,000 Job Question for Wisconsin

1:20 pm in Uncategorized by WI Budget Project

New Report Takes Comprehensive Look at Weaknesses, Strengths of Wisconsin’s Labor Market

Broken piggy bank with IOU inside

“Many workers don’t have the security they need to get ahead.”

Wisconsin’s economy is adding jobs at a slow pace, wage growth has stalled, and many workers don’t have the security and opportunity they need to get ahead, according to a new Labor Day report released from the Center on Wisconsin Strategy (COWS).

The report, “The State of Working Wisconsin, 2014,” provides a thorough examination of Wisconsin job numbers, wages, poverty, and job quality.

The information on Wisconsin job growth that is included in this report is helpful in deciphering the claims of political candidates who have helped bring a great deal of attention to jobs figures. The report notes that in many ways the hardships for Wisconsin workers mirror the troubles in the national economy. But beginning in 2011, rates of job growth in Wisconsin have fallen behind the national average:

“From January 2011 to June 2014, Wisconsin gained 109,200 jobs, posting growth in the labor market of 4.0 percent. Over that same period, the national economy grew by 6.2 percent. If Wisconsin had simply kept pace with national growth, we would have added 167,622 jobs. That difference – 58,422 missing jobs in Wisconsin – suggests that over the last four years, every time Wisconsin added two jobs, the national economy added three.”

Other serious challenges to economic well-being in Wisconsin include:

  • Wisconsin needs 130,400 jobs today to get back to the 2007 level of employment, taking into account jobs needed to accommodate population growth since then.
  • 175,000 Wisconsin residents are searching for work and unable to find any.  Rates of long-term unemployment in Wisconsin have improved little since the worst days of the recession.
  • The hourly median wage grew a paltry $0.50 between 1979 and 2013, taking inflation into account.
  • Wisconsin women earn just $0.82 for every $1 a man earns.

The Wisconsin economy is not without a few bright spots. Wisconsin residents participate in the labor force at rates much higher than the national average, and Wisconsin’s strong technical college system helps workers get the degrees they need to achieve higher wages.

The outlook for jobs and wages in Wisconsin has improved over the last few years, but too many Wisconsin workers can’t find a job, or are stuck working at low-wage employment without opportunities for advancement. There is plenty of room for improvement, and policymakers can begin by increasing the minimum wage and strengthening our higher education and worker training systems.

Read more in the State of Working Wisconsin, 2014.

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Breaking with Tradition in Wisconsin: Jobs

9:34 am in Uncategorized by WI Budget Project

Over the next week, the Wisconsin Budget Project will be highlighting a different piece each day from our larger publication Breaking with Tradition: How Wisconsin Lawmakers Have Shortchanged a Legacy of Investment in the State’s Future. You can access the full report on our website.

 

Governor Walker’s administration has placed a high priority on job creation, but job growth in Wisconsin has been slower than the national average and neighboring states.

Governor Walker pledged to create 250,000 new private-sector jobs in his first term. As of May 2014, Wisconsin was only 40% of the way to that goal. At that point, there were seven months left in his four-year term.7

Private sector employment in Wisconsin increased 4.0% between December 2010 and December 2013, based on the most reliable jobs figures available. Over this same period, the U.S. averaged private sector job growth of 6.6%. If Wisconsin added jobs at the same pace over this period as the national average, we would have an additional 57,000 private sector jobs in Wisconsin as of December 2013.

During this same period, Wisconsin has had the slowest job growth of our neighboring states. Illinois, Iowa, Minnesota, and Michigan all added private sector jobs at a faster pace than Wisconsin did between December 2010 and December 2013.8

As of the spring of 2014, the U.S. has more jobs than it did before the recession. For Wisconsin, that achievement has not yet occurred. Some neighboring states, such as Minnesota, have already returned to or exceeded pre-recession employment levels.

Investments in strong schools, safe communities, and a healthy workforce can help spur the economy, and the Legislature’s decision to reduce these investments has likely contributed to Wisconsin’s lackluster job growth.

No action on minimum wage

Policymakers took no action to raise Wisconsin’s minimum wage, which has remained stuck at $7.25 since 2009.

Several neighboring states have either raised their minimum wage or taken steps towards raising the wage. The Republican-controlled Legislature in Michigan approved an increase in the wage, and in Minnesota it is scheduled to increase to $9.50 by 2016. In Illinois, residents can vote on whether the minimum wage should be raised, after lawmakers there voted to put the question on an advisory referendum.9

Raising the minimum wage to $10.10 an hour would give a raise to one out of every five Wisconsin workers and would benefit 234,000 children in Wisconsin, all of whom have a parent who would get a raise. Nearly 8 out of 10 Wisconsin workers who would benefit are age 20 or older.10

Three-quarters of Wisconsinites support increasing the minimum wage, according to recent polls.11

New obstacles to qualify for unemployment benefits

Over the last four years, while our job creation numbers lagged the nation and the region, state lawmakers have made unemployment benefits more difficult to obtain.

They have:

  • Expanded the reasons for which jobless workers could be denied unemployment benefits;
  • Increased the job search requirements for people who are out of work; and
  • Required that workers be unemployed at least a week before receiving unemployment benefits. Since most jobless workers find a job before reaching the end of their benefits, this measure has the effect of reducing the duration of unemployment benefits for most people. In total, it reduced unemployment benefits for job seekers by about $50 million a year.12

You can access the rest of the report here.

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Job Growth in Wisconsin Still Slow, Despite Numerous Tax Breaks

11:35 am in Uncategorized by WI Budget Project

For more information, go to www.wisconsinbudgetproject.org.

Wisconsin continues to perform poorly in private sector job growth, according to new employment figures released today.

The number of private sector jobs in Wisconsin grew by 1.2% in 2013, compared to 2.1% nationally. The new jobs figures come from the Quarter Census of Employment and Wages, which this Milwaukee Journal Sentinel article calls “the most credible and comprehensive” figures available.

 

Wisconsin job growth has been slower than that in neighboring states, according to the Journal Sentinel:

In the first three years of Walker’s term, the data show that Wisconsin ranked 35th of 50 states in the rate of private-sector job growth. That puts it behind the nearby states of Michigan (sixth of 50), which is bouncing back from a searing downturn in the auto industry; Indiana (15); Minnesota (20); Ohio (25); Iowa (28), and Illinois (33).

State lawmakers have passed dozens of tax cuts since 2011, but that hasn’t spurred job growth. Despite nearly $2 billion in tax cuts over four years, job growth in Wisconsin continues to be slower than anyone would like, and our growth in gross domestic product is also well below the national average.

Still Waiting: Unlike U.S., Wisconsin Has not Returned to Pre-recession Job Levels

12:10 pm in Uncategorized by WI Budget Project

Finally.

After more than six years from the start of the Great Recession, the U.S. at long last has more jobs than it did before the recession. For Wisconsin though, that achievement is likely to be a few months in the future.

As of April 2014, there are still 27,700 fewer jobs in Wisconsin than there were in January 2008, according to the Bureau of Labor Statistics. At the current rate of job growth, it means that Wisconsin won’t achieve pre-recession job levels until sometime this fall.

Once Wisconsin returns to pre-recession employment levels, additional jobs will need to be added to make up for the population growth that occurred during the recession. Wisconsin still needs to add more than 100,000 additional jobs just to keep up with growth in the working age population, according to the Center on Wisconsin Strategy.

Employment in Wisconsin may be nearing pre-recession levels, but the type of jobs has changed. As shown in the chart below, Wisconsin now has far fewer jobs in manufacturing and construction – jobs that pay relatively high wages – than it did before the recession. This trend reflects national patterns – employment in low-wage occupations grew twice as fast after the recession as did the number of jobs in mid-wage and higher-wage occupations, according to the National Employment Law Project.

Sometime this year, the Wisconsin economy will probably have as many jobs as it did before the recession. But further gains will be needed before Wisconsin workers are as well off as they were in 2008.

by Tamarine Cornelius

Tax Breaks Abound in Wisconsin, but Job Growth Remains Slow

12:02 pm in Uncategorized by WI Budget Project

For more, go to www.wisconsinbudgetproject.org.

Wisconsin lawmakers have cut taxes 43 times since 2011, reducing revenue by $1.9 billion over that period and limiting investments in Wisconsin’s schools, workforce, and transportation networks. Despite – or because of – the substantial tax cuts, private sector job growth in Wisconsin has been slower than the national average.

The largest tax cuts over the four year period include:

  • The income tax cut included in the 2013-15 budget, which reduced revenue by $647.9 million over this period;
  • The January 2014 property tax cut, which reduced revenue by $406.0 million;
  • A tax break for businesses hiring new employees, $134.0 million;
  • A tax cut that will nearly eliminate income taxes for manufacturers once it is fully phased in, $126.6 million; and
  • A tax cut for multi-state corporations that allows them to shift some income to states with no income tax, $126.4 million.

The Wisconsin Legislative Fiscal Bureau, a nonpartisan agency, put together a list of all the tax changes enacted since January 2011. You can read the memo here (.pdf link). In addition to the 43 tax cuts, the legislature approved 10 tax increases over this period, most of which are smaller than $5 million and take the form of eliminating or phasing out specific business tax credits.

Unfortunately, tax cuts haven’t led to job growth in Wisconsin. The rate of private sector job growth in Wisconsin has fallen significantly below that of other states since the fall of 2011, as shown in the chart below. Wisconsin simply isn’t keeping up in terms of job creation.

Not only have the tax cuts not created jobs, they have made it harder for Wisconsin to build a strong economy, by reducing the revenue that Wisconsin needs to invest in schools, transportation, safe communities, and other tried-and-true building blocks of economic growth. In 2014, tax cuts drained state coffers of $1.2 billion – about the same amount of money that the state spent on the University of Wisconsin System– in money from the General Fund. Imagine the job growth Wisconsin could sustain if we had put those resources to use making sure we have a highly-educated workforce that can compete in a global economy.

Wisconsin Ranked 42nd in Job Growth in 2011-12

2:43 pm in Uncategorized by WI Budget Project

For more, go to www.wisconsinbudgetproject.org.

In case you haven’t seen it yet, there was a good article posted today on the Journal Sentinel website by John Schmid – on the subject of job creation in Wisconsin. Specifically, he examines the latest comparative data from the Quarterly Census on Earnings and Wages (QCEW), which is the measure the Walker Administration said during the months leading up to the recall election we should be using.

The latest numbers from that survey indicate that Wisconsin ranked 42nd in job creation during the 12-month period from July 2011 through June 2012. Our state gained 35,381 private-sector jobs, which was an increase of 1.5%.

The Quarterly Census has the important attribute that is based on a survey of 96% of public and private sector employers, compared to a survey of only 3% of employers for the monthly data. However, the monthly survey numbers are much more widely used because the quarterly numbers don’t get released until six or more months after the jobs numbers are collected.

As you may recall, last spring when the monthly data showed that Wisconsin had been losing jobs, the Walker Administration engaged in a vigorous campaign for using the quarterly data. They made the very valid point that the much larger survey makes the quarterly data far more reliable, and they began releasing the Wisconsin quarterly numbers a couple of months before the results for all 50 states are released by federal officials. The Governor’s ads pointed with pride to the growth shown in those quarterly figures. Although that growth was actually rather anemic, it sounded good when it was framed in comparison to the job losses shown by the less reliable monthly survey data.

Last spring when the Department of Workforce Development was “preleasing” Wisconsin’s quarterly data, it wasn’t possible to examine those figures next to comparable national data from the same time period. Now that we have comparable data for all the states during fiscal year 2011-12, we can see that only 8 other states had lower rates of job growth during that period.

Schmid’s article notes that there is a more positive aspect of the 12-month job change in Wisconsin – with respect to manufacturing jobs: He wrote that our state:

“…ranks 20th in terms of private-sector job creation in the manufacturing sector, with an increase of 11,788 new production jobs, or 2.6%. The Badger State, however, trails several other Midwestern manufacturing states: Michigan (5.2% or 26,774); Indiana (4.3% or 20,298); and Ohio (3.9% or 24,648).”

For more, go to www.wisconsinbudgetproject.org.