Tuesday, July 28, 2015

"Low" Wisconsin unemployment ain't because of job growth

I was heading home from work today with my wife, who likes to listen to MSNBC on the satellite radio sometimes. By coincidence, she landed on the Ed Show just as he was wrapping up a segment comparing Wisconsin's economic outcomes with Dem-led Minnesota's (as I've mentioned many times here, Fitzwalkerstan has been getting its economic ass kicked by our neighbors to the West). On the show to stick up for Walker/GOP "governance" was a Koch whore Heritage Foundation hack named Genevieve Wood, and one of her claims was "Scott Walker can't be doing all bad, unemployment is 4.6% in Wisconsin!"

This is where I remind you that Wisconsin's low unemployment rate has little to do with Walker's economic policies succeeding....unless you count driving down the work force by 40,000 in the last 5 months as "success." This exodus from the work force is the difference between Wisconsin's unemployment rate being the reported 4.6% instead of 5.9%, which it would have been with the same amount of jobs today, and the same work force in January.

Making this adjustment drove me to expand on that thought when the state-by-state unemployment figures were released last week by the Bureau of Labor Statistics. I knew that Wisconsin's work force had risen in the later half of 2014, so I wanted to see if this recent dropoff of 40,000 workers was a sort of reversion to the mean. I also wanted to see if Wisconsin's changes were unusual compared to the rest of the Midwest, which has generally had lower population growth than the rest of the nation over the last couple of decades because of deindustrialization....and because it gets really cold here in the Winter. So I took the most recent labor force figures from the June 2015 report, and compared them with the numbers from June 2014 for the Midwest, and here's what I found.

Change in labor force, June 2015 vs. June 2014
Minn +1.91%
Ind. +0.52%
Ohio +0.33%
Iowa +0.05%
Mich -0.14%
Wis. -0.32%
Ill. -0.41%

So Wisconsin has indeed lost some of its work force in the last 12 months (9,800 in total), and that puts them at 6th out of 7 in the Midwest. And contrast that with Minnesota, which grew its work force by the most of any Midwestern state, likely getting some of that increased work force from Wisconsin.

Which then made me wonder what the unemployment rate would have done if the labor force numbers remained the same, so I decided to crunch those numbers. You crunch those numbers, and here's what comes up. Yes, I know that the number of jobs would change because of the changes in population and income, but just go with it for a moment.

What I'm doing is comparing the reported June 2015 unemployment rate, and then using the total "employment" numbers for June 2015 (based on the household survey) and then using the June 2014 labor force figures to impute a second unemployment rate. We also can separate these two factors into why the reported unemployment rate has changed in the last year

Reported unemployment rate, June 2015
Iowa 3.7% (-0.7% vs June 2014)
Minn 3.9% (0.0% vs June 2014)
Wis. 4.6% (-0.8% vs June 2014)
Ind. 4.9% (-1.0% vs June 2014)
Ohio 5.2% (-0.4% vs June 2014)
Mich 5.5% (-1.6% vs June 2014)
Ill. 5.9% (-1.0% vs June 2014)

Imputed unemployment, June 2015 using June 2014 labor force
Minn 2.7% (-1.2% employment change, +1.2% labor force change)
Iowa 3.7% (-0.7% employment, 0.0% labor force)
Ind. 4.4% (-1.5% employment, +0.5% labor force)
Ohio 4.85% (-0.75% employment, +0.35% labor force)
Wis. 4.92% (-0.48% employment, -0.32% labor force)
Mich 5.6% (-1.5% employment, -0.1% labor force)
Ill. 6.3% (-0.6% employment, -0.4% labor force)

Changes the perspective of that "low' Wisconsin unemployment rate that Ms. Wood tried to pass over on the "Ed Show", doesn't it? Wisconsin goes from 3rd to 5th if you keep the labor force the same (and even has a higher unemployment rate than CALIFORNIA by the same metric), and is DEAD LAST in the Midwest for lowering unemployment through actual job growth. And look at how Minnesota's rate plummets to one of the lowest in the nation for the same reason.

This shows how population and work force changes play a major role in a state's economy, because that state's ability to grow gets constricted if it can't attract talent to come to its state and work. And that's what we've gotten from 4 1/2 years of financial mismanagement and mistreatment of workers in the Age of Fitzwalkerstan. And with the UW System and public education being defunded further with this new budget that started July 1, you tell me what's going to happen to reverse this trend of a stagnant Wisconsin work force under Scott Walker, and increase our state's chances of success?

1 comment:

  1. I have tracked down some information regarding the number of WIsconsinites working in MN from http://www.twincities.com/politics/ci_27621310/minnesota-wisconsin-working-revive-reciprocity
    "Because 56,000 Wisconsinites work in Minnesota and 24,000 Minnesotans work in the Badger State...
    More than half the Wisconsin border crossers live in the three counties closest to the Twin Cities -- St. Croix, Pierce and Polk."
    I haven't found any trend information but I assume that with the growth of the Twin Cities that it must be attracting more Wisconsin residents over the last several years.