Usually in labor shortages, pay gets raised. In Wisconsin? Not so much

With all of the complaints from businesses about a “worker shortage” in Wisconsin and with layoffs on the decline, you’d think that would mean that wages are jumping in our state. Well, a new analysis from the Milwaukee Business Times says…not so much.

Private sector hourly wages in Wisconsin grew an average of 2.4% year-over-year in June, July and August, the 42nd fastest pace in the country, according to data from the U.S. Bureau of Labor Statistics.

The average hourly wage in August was $28.12, up from $27.36 in August 2020, an increase of 2.8% increase. July saw a 2.6% year-over-year increase and June’s increase was 1.8%.....

Wisconsin’s wage growth was also slower than its neighboring states, including Michigan, up 5.3%, Illinois, up 5%, Indiana, up 4.4%, Minnesota, up 3.8%, and Iowa, up 3.7%.

And before you give the WMC talking point of “People don’t want to work”, the Biz Times notes that the same report showed Wisconsin with the third-highest increase in labor force participation for 2021, up to 66.5% in August from 65.5% in January, all of which were months that the $300/week add-on for unemployment benefits was in effect.

So it’s pretty clear that more Wisconsinites wanted to work, and some were able to get back to jobs in the bars, restaurants, and lodging sectors as the weather warmed and more Wisconsinites got vaccinated.

The Biz Times adds that this sector was one of the few where Sconnies got paid significantly more this Summer.

Wisconsin did see stronger wage growth in the leisure and hospitality sector, which has been among the areas struggling to hire amidst the COVID-19 pandemic. In August, the average hourly leisure and hospitality wage in Wisconsin was $16.63, up $1.74 or 11.7% from August 2020. July saw a 9.8% year-over-year increase and June’s increase was 7.7%. The 9.7% average increase over the summer months ranked 22nd in the country. Many of Wisconsin’s neighboring states saw similar increases, including 10% averages in Iowa and Indiana, 9.9% in Illinois and 9.3% in Michigan. Minnesota was an outlier with a 3.6% average increase….

But unlike some service sectors, Wisconsin manufacturers did not keep up with the rest of the Midwest in raising pay for their workers this Summer.

Conversely, in manufacturing, another sector where employers have lamented the difficulty of hiring, the average hourly wage for production workers is flat to slightly down in Wisconsin. In August, the average hourly production wage was up 19 cents from the prior year to $22.18, a 0.9% increase. However, in July the average wage was down 0.5% and it dropped 0.6% in June. For the three-month period, the average change was a 0.1% decrease that ranks 41st in the country.

Similar to the overall wage picture, neighboring states outpaced Wisconsin for production worker wage growth. Indiana was the closest with an average increase of 2.2%, followed by Illinois at 2.5%. Michigan and Minnesota were in the middle-of-the-pack nationally at 4.2% and 4.5% respectively while Iowa ranked fourth in the country with an average increase of 9.2% year-over-year.

And it’s not like manufacturers in the state were paying that much to begin with, as the most recent Quarterly Census on Employment and Wages (QCEW) reminds us.

Average weekly manufacturing wage, March 2021
Ill. $1,592
Minn $1,389
Ind. $1,372
Mich $1,354
Ohio $1,249
Wis. $1,190
Iowa $1,180

So explain to me why we are keeping Wisconsin manufacturers’ income taxes near zero when they are not using much of that extra pocket change to pay workers a better wage?

This lack of wage growth also jibes with figures out of the Bureau of Economic Analysis today, which also shows that Wisconsin earnings growth lagged the Midwest this Summer. That report also shows that the Walker years were even worse for Wisconsin incomes than we thought, as 2018’s income growth in the state was revised down by -0.7%, which meant that 2019’s levels were lower, even wtih growth levels being revised higher for both 2019 and 2020.

These updated income numbers reiterate what a failure Walker/WisGOP domination of this state was from 2011 to 2019. Not only did we trail the country for income growth on both overall and per capita bases, we trailed most of the Midwest as well. (These numbers do not account for inflation)

(side note – interesting that the worst numbers of this group belong to the two states that voted twice for Obama and then twice for Trump).

So why would we want to continue on this path, with the gerrymandered WisGOP Legislature blocking any ability of Governor Evers to implement large-scale changes that the people want (and small ones like replacing GOP donors who Chair the DNR Board after the GOP’s term is up)? And why would we ever want to bring back a Republican as Governor to not only bring back any of the failed Walker policies that have been blunted since 2019, but to put those regressive giveaways on steroids?

Bad business leaders and their WisGOPuppets have held this state back for a decade, and I’m tired of it. There is a better way, and if this state is ever going to be somewhere that pays an appropriate wage and provides a good quality of life to the majority of the good people that work in it, we gotta get these mediocrities out of this place at every level.