Thursday, June 26, 2014

Debunking more WisGOP job excuses

Sometimes the right-wing spin on Gov Walker's job failures is quite pathetic. And Tom Hefty of the Bradley Foundation-funded Wisconsin Policy Research Institute is the latest to come up with this type of weak sauce.

Hefty's first claims are that Wisconsin's wages are gaining, and therefore, the job situation isn't as bad as "37th in the nation and worst in Midwest for job growth" would indicate, and that the overall numbers are still good.
Wisconsin, we now know, ranked 12th highest in the country in average wage increases in 2013. Our wage increase was 1.2% while the national average wage increase was zero.

Rising wages are obviously good news for Wisconsin families. The Wisconsin unemployment rate is 5.7%, lower than the national average of 6.3%. At 68%, the Wisconsin work force participation rate — the percentage of Wisconsin citizens in the work force — is higher than the national average of 62.8%.

So, to sum up: Wages are rising. The unemployment rate is low. And a high percentage of Wisconsin residents have jobs. But still we have sluggish job growth.
The wage part is intriguing, as the QCEW tells us the state's average weekly wage increased $10 to $865. But what's not mentioned is that at the end of 2010, Wisconsin's weekly wage was already at $837, and has only grown 3.34% in the three years Scott Walker has been governor. When you realize the CPI has increased by 6.33% from the end of 2010 to the end of 2013, making for a inflation-adjusted LOSS of 2.8%. But it makes for a nice story if you narrow it down into one year, so we'll let Hefty have the wage increase stat- for now.

As for the low unemployment rate and high participation rate? I have mentioned numerous times, "Scott Walker, you didn't build that." Wisconsin was 1.4% below the U.S. unemployment rate when Walker took office in January 2011 (7.7% vs. 9.1% nationwide), so being 0.6% below the US now means the rest of the country is lowering unemployment faster than we are. Same goes for the participation rate, as the Wisconsin DWD notes that the state's participation rate was 69.0% in 2010, so it's actually DROPPED under Walker by 1.0%. That 68.0% is also below several other states in the hardworking upper Midwest and Great Plains.

Participation rates, May 2014
Neb 71.7%
N.D. 71.1%
Minn 70.5%
S.D. 70.0%
Wis. 68.0%
Ill. 65.1%
Mich 60.5%

So those "positive" stats aren't a big deal, and if anything makes Wisconsin look subpar, but Hefty doesn't stop there. Dane County had the 9th-largest increase in weekly wages among large counties in the U.S. for 2013, and Hefty tries to make a back-door "Act 10 wasn't so bad" justification by pointing out this out.
Dane County is worth noting for another reason as well. The numbers for wage growth would appear to refute those who blame Act 10 for Wisconsin’s economic performance. If Act 10 did indeed have a negative impact, it would logically appear most sharply in Dane County, the area with the greatest percentage of government jobs. Instead, Dane County wage growth has been extraordinarily high.

That’s good news, but that story conflicts with the Democrats’ campaign narrative.

Ninety miles to the east, meanwhile, there is yet another story — and a much more dismal one. Milwaukee County’s job growth last year was 0.5%, or 249th among 335 counties. Wages grew in Wisconsin. Average wages declined in Milwaukee by 0.2%.

Wisconsin as a whole, in other words, had a job growth rate half the national average, and Milwaukee had a job growth rate half the state average. As noted, wages in Wisconsin as a whole grew faster than the national average. In Milwaukee, they declined.
First, that line about Act 10 wages in Dane County is dishonest on its face, because Act 10 didn't change what people's WAGES were, but it did change their TAKE-HOME PAY, based on higher employee contributions for pensions and health insurance, and that's what's helped diminish Wisconsin's economy.

Hefty makes some crack about how Madison as the "government center" of Wisconsin now has higher average wages than the "commercial center" of Milwaukee. But this ignores that most of the wage gains in Dane County are in the private sector. Average weekly wages in Dane County's state government jobs only went up 2.4% in 2013, while average weekly private sector wages went up by 6.0% in 2013, so the state government jobs didn't raising wages as much as the private sector jobs did. And let's not forget that Dane County has boomed precisely because it promotes a high-services, liberal approach that presents a high quality of life that attracts talent from other places, so maybe being a "government center" isn't such a bad thing, as opposed to "privatized to death" Milwaukee. Dane County government has defied Act 10 by actively negotiating and extending agreements with their public employees, with a new agreeement just announced this week for 2016.

So I really wouldn't call our strong economy here in Madtown as some kind of proof that Act 10 is "working." But Mr,. Hefty could thank us for carrying the load while much of the rest of the state declines under his boy Scotty. As for Milwaukee's bad rankings? It isn't just them. Why didn't Hefty mention stagnant or declining wages in other counties in Southeastern Wisconsin? Couldn't be because they vote Republican and back this Bradley BS, could it?

Changes in average private sector weekly wage, 2013
Waukesha Co. -1.3%
Walworth Co. -1.0%
Washington Co. +0.6%

But then again, when did WPRI (aka We Promote Republican Idiocy) ever want to admit their suburban base may be faring as bad or worse than "those Dem voters" in Milwaukee?

Oh, and speaking of wages, why didn't WPRI mention this stat in the latest QCEW report.

Average weekly manufacturing wage, Midwest, Q4 2013
Ill $1,308
Mich $1,277
Minn $1,169
Ohio $1,129
Iowa $1,116
Ind. $1,088
Wis. $1,086

I don't ever want to hear the words "Wisconsin skills gap" again, unless it is followed by "Wisconsin wage gap."

I know Tom Hefty needs a paycheck from these guys and has to try to spin away the failures of Scott Walker and 3 years of lagging job growth, but the arguments that guys like him are trying to sell fall apart with even a few minutes of research.

C'mon righties, can't you do better? Oh wait, I think I know that answer.

1 comment:

  1. You can get historical LFPR's here, showing how between January 2011 and May 2014 the states you listed changed:

    LFPRs, January 2011 vs May 2014
    Ill. 66.2% -> 65.1%
    Mich 60.6% -> 60.5%
    Minn 71.8% -> 70.5%
    Neb 71.5% -> 71.7%
    N.D. 72.1% -> 71.1%
    S.D. 71.6% -> 70.0%
    Wis. 69.0% -> 68.0%

    During the same period nationwide the LFPR moved 64.2% -> 62.8%.

    I've said before and I'll say again: LFPR is IMHO more a psychological measure than an economic one. People who lose their jobs as a recession starts stick around looking for new ones for a while, so the unemployment rate spikes as jobs are lost. They slowly but eventually give up looking, leading to unemployment rates ticking downwards even if job creation rates are poor.

    More relevant to economic performance is the employment-population ratio, i.e. your chances as an individual to find yourself with employment, all else being equal.

    Employment-Population ratios, January 2011 vs May 2014:
    Ill. 60.0% -> 60.2%
    Mich 53.9% -> 56.0%
    Minn 66.8% -> 67.2%
    Neb 68.3% -> 69.1%
    N.D. 69.6% -> 69.2%
    S.D. 68.0% -> 67.3%
    Wis. 63.7% -> 64.1%

    National: 58.4% -> 58.9%.

    You might also want to divide the cost of living index (rebased to 1) into those manufacturing wages to get a purchasing power parity equivalent, since the raw numbers make Wisconsin manufacturing wages look like it's a much closer race for the least financial attractiveness to a trained manufacturing worker than it actually is:

    Average weekly manufacturing wage, Midwest, Q4 2013, PPP:
    Ill $1,370
    Mich $1,360
    Iowa $1,206
    Ohio $1,200
    Ind. $1,200
    Minn $1,148
    Wis. $1,099

    I'd like to know what their emigration rate is like.

    n.b. Your inflation link is broken: I'm not sure if you intended to use the national urban CPI or the Midwest urban CPI for that.