Wisconsin Wave

Uniting Wisconsinites for democracy and shared prosperity

This is an archived version of the Wisconsin Wave website.

The latest job numbers are out and while Wisconsin has showed some slight improvement, the state still trails most of its neighbors and the nation as a whole coming out of the Great Recession.

In fact, if Wisconsin had added jobs at the same rate as the rest of the nation, the state would have 40,000 more jobs than it does currently, the Bureau of Labor Statistics data shows.

So what happened?

In this report from the Institute for Wisconsin's Future, researcher Jack Norman explores the numbers and comes up with three reasons job growth has been slow under Gov. Scott Walker.

The report isn't a partisan piece. It acknowledges that a lot of the problem relates to past decisions by Democrats as well as Republicans, along with private sector leaders who have shipped jobs out of the state in the name of higher profits.

But here are three examples of how Walker’s policies have thwarted jobs recovery:

  • Train jobs that never materialized. A new rail terminal in Madison and high-speed tracks the federal government wanted to pay for were supposed to open this summer. A factory in Milwaukee was supposed to be busy making railroad cars for the nation. Walker turned down the feds’ money, criticizing it as a waste of taxpayer money.
  • Public sector job cuts. In Walker’s first year in office, 15,500 jobs in state and local government were lost due to his cutbacks. In percentage terms, that was the second largest reduction in public sector jobs in the U.S. in 2011, according to the BLS.
  • Act 10 pay cuts. Public sector workers who kept their jobs lost about 8% of take-home pay. That’s nearly a billion dollars a year in spending taken out of the local economy.

Norman says that from an macroeconomics point of view, all three mechanisms above were job killers.

"You may like Walker’s ideology but you should also accept the fact that implementing it has come with a very heavy cost," he says.

Walker defenders may counter that with the state facing a $3.6 billion budget deficit in 2011, the governor had no choice other than raising taxes on upper-income earners.

But Norman says that's nonsense.

"It’s what Congress did for the nation, and that hasn’t harmed America’s economy," he says. "Wisconsin needed a stimulus. The governor fed us a sedative instead."

There may be hope on the horizon, however.

Wisconsin has improved dramatically in a monthly index designed to predict economic growth of individual states over the next six months.

Wisconsin placed 20th among the states in the newly released May ranking by the Federal Reserve Bank of Philadelphia. That is up from 40th in April — although experts caution about reading too much into the monthly changes.

Here is a link to the Milwaukee Journal Sentinel story on the Philly Fed index.

 

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