On Friday, we got another chance to see how Wisconsin was shaping up against the rest of the country with the state-by-state job report from the Bureau of Labor Statistics. And it had the strange dichotomy of Wisconsin allegedly having the 2nd lowest unemployment rate in the Midwest at 3.4% (only Iowa was lower, at 3.1%), but also one of the lowest rates of job growth in the region (also oddly, Iowa was even worse than us).
Private sector job growth, March 2016-March 2017
Job growth that ranks 5th out of 7 states in your area and lagging well behind the national average isn’t the sign of a thriving state to me, no matter what the unemployment rate might say.
And we especially look bad compared to our neighbors on the other side of the St. Croix. Maybe it's because the 1-year anniversary of the death of one of the greatest Minnesotans is this week and I've been listening to Minnesota Public Radio a lot this weekend, but I do want to focus in on that....after you enjoy 9 minutes of genius from the Purple One.
Minnesota gained another 5,300 jobs last month in the private sector as well as overall while Wisconsin only gained 500 in the private sector and lost 2,700 overall, and UW’s Menzie Chinn notes that after a slight lull in 2015, Minnesota has resumed the ass-kicking they have given us throughout the Walker era.
Minnesota has added 20,000 more private sector jobs than Wisconsin in the last 12 months, and nearly 40,000 more since March 2011, when Act 10 was jammed through the Wisconsin Legislature.
But how has Wisconsin’s unemployment nose-dived in the last few months to become even lower than Minnesota’s for the first time in several years (3.4% in Wisconsin, 3.8% in Minnesota)? The answer points to 2 reasons.
1. The household “employed/unemployed” survey looks at where people live , while the “jobs number” looks at where people work. St. Croix County (located right across the river from the Twin Cities) was estimated to have nearly 19,000 residents who worked in Minnesota when the number was last measured in the 2009-2013 time period, and St. Croix has continued to grow in the meantime, adding another 3,684 people since 2010. And it’s not just St. Croix, as Pierce County had nearly 9,600 people commuting to Minnesota, and Polk County had over 4,300 that survey.
Wisconsin also exports workers in the Superior-Duluth area, with over 7,300 residents of Douglas County working on the Duluth side, vs less than 3,500 coming across from Minnesota into Wisconsin. The only place that came close to reversing those large Wis-to-Minn numbers were the 4,500 people from Minnesota who come into La Crosse vs. 1,000 heading the other way.
Likewise, over 21,000 Kenosha County residents commuted to Illinois for work, and another 4,500 people from Rock County also headed across the border (more than the people from the Rockford area that worked in Wisconsin). There’s no reason to think that trend has changed any, even with the many WEDC handouts that seem to go around the state line to encourage Illinois people to locate in lower-wage Wisconsin. This means Wisconsin has more people “employed”, but the “job” is in a different state.
2. People may be moving out of Wisconsin (or not moving in), and it’s not being reflected in the totals. Take a look at the difference in the two states when it comes to population growth and especially net migration.
Population growth, 2014-2016
Net migration per 1,000 residents
This would ordinarily reflect in the growth of the labor force being smaller in Wisconsin, which lowers the unemployment rate even when the job growth figures are low. And comparing the states over the last 6 years, this largely holds up.
Change in labor force Mar 2011- Mar 2017
Granted, both Wisconsin and Minnesota have gained sizable amount of people to their work force over the first 3 months of 2017 (Wis +22,200, Minn +15,000), but that also underscores just how much further behind Wisconsin was until that time. That huge change in Wisconsin's labor force after 6 years of stagnation makes the figures in that survey all the more suspicious (particularly since it hasn't translated into higher income tax revenues), and I want to see how that Wisconsin labor force and "employed" number adjusts in later years.
And outside of that outlying unemployment figure, Wisconsin still badly trails Minnesota when it comes to both jobs and wages, which leads me to this observation. If the Packers were 5-11 and the Vikings were 10-6, we wouldn't be saying "Well, the Bears were 3-13, so the Packers are doing OK." We'd be saying "FIRE THE COACH" because being way behind Minnesota would be unacceptable. So why do we accept this type of underperformance from our state and our governor?