After months of gains, Wisconsin thrown for sizable job loss in August

We knew there had been a drop in job growth in the country in August, but I don't think many of us thought we would see what we saw in the Wisconsin jobs report that came out on Thursday.

Place of Residence Data: Wisconsin's labor force participation rate in August was 66.5, 4.8 percentage points higher than the national rate of 61.7 percent. Wisconsin's unemployment rate in August was 3.9 percent, while the national unemployment rate was 5.2 percent in the same month.
Place of Work Data: Wisconsin lost 8,200 private-sector and 10,400 total non-farm jobs in August 2021.

10,400 jobs lost? UGH!

It was especially surprising coming after several months of job gains in the state, including 16,500 jobs added in July. Which almost makes me wonder if both reports exaggerated ups and down in a time when there were small gains over both of those months.

In digging into the report, the losses were heavily concentrated in health care/social assistance (-6,500) and manufacturing (-2,700), but there were also notable declines in real estate (-1,000) and professional/business services (-1,500). Interestingly, one sector that did see decent job growth in August was one that we keep seeing stories about short staffing - leisure and hospitality (+2,900). Although that sector still has a ways to go before we get back to pre-COVID levels.

August's number was also a surprising loss because there had not been a notable increase in the state's unemployment claims of any sort in late July and August. Claims were also lower than the levels we were seeing in months like May and June, when Wisconsin was gaining jobs.

You'll also see that the drop in unemployment claims has continued after August, but the shortages in labor remain, so the WMC-style argument that "unemployment benefits are making people stay at home" doesn't hold water. And mediocre Wisconsin business owners that try that tired meme quickly fail once their claims and their business are given even a tiny bit of investigation.

A DeForest restaurant that received nearly a half-million dollars in relief funding closed Monday with the owner leaving a note on the door blaming Evers and Biden. But the owner said Thurs the real reason was because the lease was up. https://t.co/HbTECVz9e4 via @samarakalk

— Molly Beck (@MollyBeck) September 16, 2021

That said, I can believe that this guy may not have been able to find workers at wages he was used to. But it's not Dem policies that are causing more Wisconsinites to leave jobs for a variety of reasons, or why they have yet to be replaced. Heck, we haven't had a raise in the minimum wage despite the fact that almost all entry-level job openings are (publicly) asking for $12-$15 an hour.

I think the COVID World and its disruptions have changed the game, less in the sense of businesses closing, but more because a lot of people aren't willing to put themselves at risk with certain jobs - at least not at the low pay that they accepted before. Something different has happened in 2021 as we first came out of the COVID Winter, and then COVID resurged and in-person school resumed later in the Summer. And it especially was odd in August.

Maybe Wisconsin's job loss is a statistical blip that gets reversed with gains in September, or maybe labor market conditions are drastically changing as school begins and weather cools. If it's the latter, we may need to resume a "relief/support" mode of economic policy, instead of thinking things are going to work themselves out and staying away from active measures and aid.