Saturday, August 5, 2023

July jobs - More jobs, more people want to work, and more money being made by workers.

Another month, another decent US jobs report.

A couple of numbers that stand out to me in this report is that while job growth continues, it also continues to decelerate from the torrid pace of 2021. Which you would expect when we get below 4% unemployment, but it's also what the Federal Reserve bankers would want to see if they're still concerned about "overheating" and inflation.

Adding over 1 million private sector jobs in 6 months during a full-employment situation is still pretty good. And two sectors have been especially strong in recent reports. One is construction, which has added over 100,000 jobs in 2023 even as manufacturing hiring has flatlined in the wake of the Fed's interest rate hikes.

And another is health care, which added 64,000 jobs in July, has added over 300,000 jobs in 2023, and has added nearly 900,000 jobs since the end of 2021. This puts health care employment well above its pre-COVID levels.

And even better is that unemployment dropped in July for the "good reason" - more people continuing to enter the work force and finding jobs. In the last two months, the BLS says a total of 285,000 Americans have joined the work force (seasonally adjusted, the non-seasonal increase is 1.65 million), and a seasonally-adjusted 541,000 more Americans say they are working.

The rate of people entering the US work force is something we haven't seen in 23 years.

The '70s and '80s were also the peak of Baby Boomers becoming working age and/or rejoining the work force after having kids. No such case in America of the 2020s, but it does seem that those Boomers that left the work force are being replaced, which is a very good sign for future growth potential.

So moderate job growth, favorable work force numbers, and good wage growth that's beating inflation? Seems like a good idea to try to keep the good times rolling for the rest of 2023.
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Wednesday, August 2, 2023

First order of business for new Wis Supreme Court - new maps. And I'm here to help!

Wanted to follow up from the big court filing of this week. Well, the OTHER big court filing of the week.

The long-promised action is backed by Democrats and was filed by a coalition of law firms and voting rights advocacy groups. It comes the day after the Wisconsin Supreme Court flipped from a conservative to liberal majority, with the start of the term of a justice who said that the Republican maps were “rigged” and should be reviewed. “Despite the fact that our legislative branch is meant to be the most directly representative of the people, the gerrymandered maps have divided our communities, preventing fair representation,” said Jeff Mandell, board president of Law Forward, one of the groups that brought the lawsuit....

The latest challenge asks the Wisconsin Supreme Court to take the case directly, rather than have it work through lower courts, arguing that the state legislative maps are an unconstitutional gerrymander. Notably, the lawsuit does not challenge the congressional maps....

The petition filed with the Supreme Court argues that the current maps unconstitutionally retaliate against some voters based on their viewpoint and free speech; create non-contiguous districts that include scattered fragments of detached territory; treat some voters worse than others based on their political views and where they live; and violate the promise of a free government.
Had to be done, and it absolutely needs to go directly to the new Supreme Court. Time is short, and these maps must be fixed before Spring 2024, when candidates send out nominating petitions and file for the August primaries.

The fact that this suit came so fast isn't surprising, but this part of the suit was something I hadn't thought of.
The lawsuit asks that all 132 state lawmakers be up for election that year in newly drawn districts. In Senate districts that are midway through a four-year term in 2024, there would be a special election with the winner serving two years. Then the regular four-year cycle would resume again in 2026.
It makes sense, right? If the maps were illegitimate in 2022, then everyone elected to the Senate is illegitimate, and they can't be allowed to stay around any longer than necessary. EARN THAT SEAT.

Of course, if the maps are found to be illegal, the question then becomes "How do you fix it?" Well, I have Assembly and Senate maps RIGHT HERE, if Law Forward or anyone wants to submit them. It's basically what I did before, with a few improvements and tweaks since then.

All I did was try to keep communities together (the current maps split up a lot of cities for no reason beyond gerrymandering), set lines in logical, relatively compact ways, and tried to make sure a sufficient amount of districts in Milwaukee (along with one in Racine) were majority-minority.

The result was this Assembly map.

Compare that to the current GOP gerrymander.

I think a good baseline to use for 2024 is Tony Evers' 3.5% win in 2022, especially given now-Justice Janet's 10 point win in April, and the general mess that is the Wisconsin GOP and MAGA Trash these days. And if you use 2022's Governor election outcomes, GOP candidate Tim Michels would have still won a majority of districts, but only 55 of 99, which is a 9-seat difference from the 64-35 GOP majority that exists today. And over 20 races end up being close, where the total vote margin is within 10 points.

The Senate map tells a similar story. These districts are more noticeably different, because of how 3 Assembly seats get folded into one Senate seat. This time I'll give you the GOP gerrymander first.

And now check out my map, which changes where some Assembly districts get folded into, particularly around Green Bay and in breaking up the gerrymander around Racine and Kenosha, where 2 safe seats split between urban and rural become 2 competitive seats that largely stay within county lines.

Under this map, Evers would only have won 14 of 33 districts while winning the state by 3.5%. But that's a whole lot more representative than the 2-1 supermajority that GOPs have in the Senate today. And if all 33 Senate districts are up for election in 2024, it is possible for the upper chamber to flip if Democrats win by 6-7%.

And that's all we ask for with these maps. Just make it so that there are enough competitive districts that if a party wins convincingly statewide, they are able to have control of the Legislature, and that more candidates have to listen to everyday Wisconsinites instead of the fraction of a fraction of a fraction that votes in party primaries.

So if Law Forward or some other organization wants to help the new Supreme Court majority get these maps into place, they can save valuable time by not having to draw it themselves. And I (and so many others that have already drawn maps over the last 3 years) are glad to be part of that help!
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Monday, July 31, 2023

GDP bumping along, boosted by Biden/Dem incentives for construction

Also wanted to discuss the other big new report from late last week, which also showed how the US economy continued to grow through the Spring and early Summer.

And a big reason behind the surprising growth was a jump in "non-residential fixed investment", which includes new business buildings and transportation equipment such as vehicles and airplanes. That made up for a moderating in consumer spending, and reflects the big increase in the construction of manufacturing facilities in recent months.

UW-Madison's Menzie Chinn is among several economists noting that Biden/Dem policies passed in 2022 coincide with this increase in 2023, but it doesn't seem like coincidence.

These numbers show the inflation-adjusted change in billions of dollars, and note the green bar's jump in the last quarter. That goes along with numbers we saw earlier this month, which said that the value of manufacturing construction had gone up by 77% between May 2022 and May 2023. Which helped to keep the sector afloat as the larger sector of private residential construction dropped by 11.6% in the same time period.

So we have solid but not booming economic growth, and economic policies that encourage investment in America. Basically everything that a sensible country should look like, with inflation moderating in the first half of the year as well. Seems like we'd want to continue in this direction, wouldn't we?
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Saturday, July 29, 2023

Incomes up, spending up, and inflation flattening. Keep this ROLLIN'!

Lots of good economic news all around this week, punctuated by what was in the income and spending report that was released on Friday.

The income and spending numbers are good on their own, but the financial media centered on the inflation figures in that report, because they wanted hints on what might happen with future monetary policy. And they found nothing but good signs on that front.
Annual U.S. inflation rose at its slowest pace in more than two years in June, with underlying price pressures receding, a trend that, if sustained, could push the Federal Reserve closer to ending its fastest interest rate hiking cycle since the 1980s.

The improving inflation environment was reinforced by other data on Friday showing labor costs posted their smallest increase in two years in the second quarter as wage growth cooled. It mirrored reports this month showing the economy shifting into disinflation mode, with consumer prices moderating sharply in June and producer inflation muted.....

The personal consumption expenditures (PCE) price index increased 0.2% last month after edging up 0.1% in May, the Commerce Department said. Food prices dipped 0.1% while the cost of energy products increased 0.6%. In the 12 months through June, the PCE price index advanced 3.0%. That was the smallest annual gain since March 2021 and followed a 3.8% rise in May.

Excluding the volatile food and energy components, the PCE price index gained 0.2% after rising 0.3% in the prior month. That lowered the year-on-year increase in the so-called core PCE price index to 4.1%, the smallest advance since September 2021. The annual core PCE price index climbed 4.6% in May.

Economists polled by Reuters had forecast the core PCE price index would gain 0.2% and rise 4.2% on a year-on-year basis. They calculated that the "super core" increased 4.1% on a year-on-year basis after rising 4.7% in May. This measure of services less housing is being closely monitored by policymakers to gauge progress in the inflation fight.
Seems like a good situation to me. And while growth in the employment cost index declined in Q2 2023, wages and salaries were still up 1.0% for those 3 months, and increased 1.7% more than inflation over the last 12 months, clawing back half the losses suffered as inflation peaked in mid-2022.

Also note that this is just wages, salaries. It leaves out the stimulus checks and all the other COVID-related aids in 2020 and 2021 that added to Americans' checkbooks and allowed them to pay off some of their debts.

So with inflation down to a 3-4% annual rate, wage growth exceeding it, consumer spending staying strong but not frenzied, and unemployment staying low, what's the problem? Seems like Bidenomics is working on almost all fronts, but the Fed for some reason wants to blunt this by keeping interest rates at levels that predate 9/11.

Hopefully the Fed makes a long-overdue realization, and at the very least stops hiking for the rest of this year (in reality, they should be moving rates at least back toward the 4% PCE inflation level). US consumers and real job creators (aka NOT corporations) have foiled the Fed's plan for a recession so far in 2023, and it'll likely take some kind of outside shock to cause any sort of significant decline for the rest of the year.

Works for me.

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Sunday, July 23, 2023

Wis Policy Forum reminds us that there are big tax cuts in Wis budget, and more funds to play with

Republicans have spent the last 3 weeks complaining about vetoes by Governor Evers that they claimed would ultimately raise taxes. Which is why this headline from last week give me a grin.

Wisconsin taxpayers are set to receive over $1 billion in state and local tax relief over the next two years from the latest state budget, according to a new report from the Wisconsin Policy Forum. The report, released early Thursday morning, found the $99 billion two-year state budget signed into law by Gov. Tony Evers earlier this month delivered historic aid increases to local governments and raised state spending by the highest rate this century while simultaneously cutting state and local taxes and preserving much of the state's rainy day reserves. "State officials used an unprecedented nearly $7 billion surplus to do in the 2023-25 budget what once would have seemed impossible: combine the largest increase in funding for public services in three decades with a relatively substantial package of tax cuts," researchers wrote in the report.
Oh! You mean WisGOPs aren't really telling the full story here? OK, Wisconsin Policy Forum. Tell me more, starting with the biggest source of tax relief in the budget.
Under the budget, funding for the school levy credit would rise by $255 million, or 27.1%, in year one and an additional $80 million, or 6.7%, in year two for a total increase in funding of $590 million over the two years. The year one percentage increase is the largest rise in the credit in a single year since 1997. Despite the credit’s name, it is used to lower property tax levies and does not provide additional funding for schools….

In his budget bill, Evers proposed increasing the amount that schools can raise from general state aid and the property tax by $350 per pupil in 2024, and then again by $650 in 2025, tying increases to inflation in the years following. Both would have been the largest increases seen since per-pupil revenue limits were instituted. However, the Joint Finance Committee lowered those amounts to $325 increases in both years – less than Evers sought but still the largest since the limits were put in place. As of this past school year, the state counted about 800,000 pupils for the purpose of revenue limits; an additional $325 would therefore equate to about $260 million each year between the two largest sources of school funding.

When considering the combined impact of these increases in the per-pupil revenue limit and the additional general aid increase of $137.9 million in the first year of the budget and $362.8 million in the second, by themselves these two changes would likely mean some increase in authority to raise property taxes in year one of the budget and a potential decrease in year two. However, separate legislation (2023 Wisconsin Act 11) also raised the “low revenue limit ceiling” – the confusingly named minimum revenue amount for school districts – from $10,000 to $11,000. That would increase the revenue limit authority for districts collectively by roughly $350 million in each year. However, not all of this amount would be in addition to the $325 per-pupil revenue limit increases and so the total increase would be less than the two added together.
Combine that with the big increases in state funding being sent to local communities and other changes from the shared revenue bill [which became Wisconsin Act 12], and homeowners shouldn't see much of a difference in their property tax bill at all over the next 2 years.
The Legislature left in place the existing state caps on local property taxes, effectively limiting the increase in operating levies for municipalities, counties, and technical colleges to the growth in net new construction. As noted earlier, the legislation also increases shared revenue and local transportation aids and provides new sales tax authority to Milwaukee and Milwaukee County. All of these provisions could help to slow the growth of local property tax levies.

The budget and Act 12 also eliminated the personal property tax, estimated to lower total statewide levies on December 2024 bills by $173.8 million. The budget also provides GPR funding to increase the state lottery credit by $31.7 million over the two years, which is also used to lower the net statewide property tax levy.
And with Governor Evers' veto of income tax cuts, the Policy Forum reminds us that this leaves plenty of funds available for further tax cuts or initiatives. And those can be asked for some time during this current budget, or in the next one that Governor Evers will submit to a (ungerrymandered?) Legislature in 18 months.
...Under the final version of the budget with Evers’ vetoes, the general fund balance would drop from an estimated $6.88 billion on June 30 of 2023 to a projected $4.07 billion on that same date in 2025 (see Figure 2).

The state would still retain roughly $1.8 billion in its rainy day fund, leaving it with nearly $5.9 billion in total reserves. That would amount to 25.5% of spending (or net appropriations) for fiscal year 2025, which would be well above the levels typically seen in both Wisconsin and among state governments on average over the past two decades.

I'll also add that those bank accounts earn interest at the Fed's jacked-up rates until they get used or depleted in some other way. But I would recommend that Governor Evers demand for more in the coming months, such as renewing calls for working-class and middle-class income tax relief (which were in his original budget, and then removed by Republicans) and offering more financial support for child care and other needed community services, to make sure large amounts of Wisconsinites aren't left behind.

These are things that the people want and need, and we have the fiscal ability to do it. If Republicans don't want to get on board with this, and keep trying to give everything away to ultra-rich donors that take much more than they contribute, then let the WisGOPs explain it to the voters in 2024. New, fairer maps are coming in a state where Dems have been consistently winning statewide, and arguing in favor of the Walker-imposed status quo that has failed a lot of Sconnies doesn't seem like a WisGOP winner to me.

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Saturday, July 22, 2023

How Dane County and other educated areas are the Death Star against Wisconsin going MAGA

I saw this article on social media, and it immediately piqued my attention.

Then I noticed the in-depth article begins DATELINE MADISON, WISCONSIN, and talks about how Dane County led the way in Janet Protasiewicz's landslide victory in April's Wisconsin Supreme Court race.

No place was more energized to vote than Dane County, the state’s second-most populous county after Milwaukee. It’s long been a progressive stronghold thanks to the double influence of Madison, the state capital, and the University of Wisconsin, but this was something else. Turnout in Dane was higher than anywhere else in the state. And the Democratic margin of victory that delivered control of the nonpartisan court to liberals was even more lopsided than usual — and bigger than in any of the state’s other 71 counties.

The margin was so big that it changed the state’s electoral formula. Under the state’s traditional political math, Milwaukee and Dane — Wisconsin’s two Democratic strongholds — are counterbalanced by the populous Republican suburbs surrounding Milwaukee. The rest of the state typically delivers the decisive margin in statewide races. The Supreme Court results blew up that model. Dane County alone is now so dominant that it overwhelms the Milwaukee suburbs (which have begun trending leftward anyway). In effect, Dane has become a Republican-killing Death Star.

“This is a really big deal,” said Mark Graul, a Republican strategist who ran George W. Bush’s 2004 reelection campaign in Wisconsin. “What Democrats are doing in Dane County is truly making it impossible for Republicans to win a statewide race.”
Protasiewicz won nearly 82% of the vote in Dane County in April, and Dane County accounted for more than 13% of the state's total votes in that Supreme Court election. As someone who worked an on-campus polling site that day, I couldn't help but notice that not only were a sizable number of students registering that day (meaning they likely had not registered and voted in November's midterms), but that around 3/4 were female. The chance to flip the court and reverse Wisconsin's 1849 abortion law had to be a main driver.

Coming up in 2024 is a presidential election, and in prez elections, Dane County has become a lot more Democratic since 2000, even though the margins statewide aren't much different. Democrats did 30 points better in Dane County than the rest of Wisconsin in all 3 elections between 2000 and 2008, but the difference compared to the rest of the state was a consistent one. That difference widened a bit in 2012, and broke apart after Donald Trump became a candidate to where the "Dane vs statewide" gap ended up closer to 50 points in 2020.

But it's not only Dem percentages that have been growing in Dane County - it's the total margins themselves. Because as the Politico article notes, these college communities are growing much faster than the rest of their swing states. They define these "college counties" as such:
The American Communities Project, which has developed a typology of counties, designates 171 independent cities and counties as “college towns.” In a combined social science/journalism effort based at the Michigan State University School of Journalism, the ACP uses three dozen different demographic and economic variables in its analysis such as population density, employment, bachelor’s degrees, household income, percent enrolled in college, rate of religious adherence and racial and ethnic composition.
Nationwide, Republicans have gone from slight victories (!) in these counties in the George W. Bush elections to losing them by more than one million votes in 2020. With total votes going up by nearly 50% in the last 20 years.

Turns out that people with options want to live in highly-educated places with high qualities of life, and businesses like to set up in communities that have those type of highly-educated workers (who knew?). And they care about issues and elections.

And while Madison and Dane County are the largest example of how this trend in college counties helps Dems in Wisconsin, it's not the only one. Eau Claire and La Crosse are Dem strongholds as well (Protasiewicz got 64% of the vote in both of those counties), Portage County (Stevens Point) gave soon-to-be Justice Janet 58% of the vote, and Protasiewicz won Republican-leaning Winnebago County by more than 8% after Evers lost it by less than 1% in November.

You also see a similar blue trend happening in Milwaukee suburbs that have a lot of college-educated individuals and future college students. Even though it was a July special election with smaller turnout, GOPs had to be alarmed with this result from Tuesday.

Census data tells us that nearly 46% of the 24th Assembly District's adult population has a bachelor's degree or higher, well above the Wisconsin rate of 31.5% with bachelor's degree or higher. The 24th also has more than 13,000 children under 18, whose parents are seeing the anti-education future that WisGOPs constantly spout, and increasing numbers aren't buying it.

You'd think Republicans would notice this and try to remove that motivator in time for the 2024 elections, but Legislative GOPs refuse to put forward any bill to restore Roe v. Wade rules in the state. Instead they are wasting time trying to push through anti-trans bills under the guise of "protecting girls' sports" - WHICH IS NOT A THING IN ALMOST ALL PARTS OF WISCONSIN.

And when the Assembly GOP Leader (who controls the campaign funds for other Assembly GOPs, and doesn't allow other legislation to get to the Assembly floor) isn't trying to revive unpopular tax cuts for the super-rich, Dweeby Napoleon continues to push this cultural BS.

The Politico article ends with this brutal bit of honesty from the recent Wisconsin GOP Convention, where a resolution to try to force college students to vote in their home districts got tabled. And it was because the dwindling number of Dane and Milwaukee County Republicans told other GOPs that they were getting their asses kicked.

“Why on Earth would we send a message to the students that we don’t want them to vote our way?” Milwaukee County GOP Chair Hilario Deleon told his fellow party activists. “Do not give the Democrats ammunition, give them competition.”
Shhhh, don't tell the MAGAts. Let them keep living in their Bubble of BS and anti-education resentment, and let them keep losing by bigger and bigger margins in Wisconsin.

Here's the link to that article again. Read it, it's a good one.
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Friday, July 21, 2023

Wisconsin returns to record-high job levels in June

After a down report in May, Wisconsin’s job market bounced back in June, and hit a new record high.
The Department of Workforce Development (DWD) today released the U.S. Bureau of Labor Statistics (BLS) job totals for the month of June 2023, which showed Wisconsin's total nonfarm jobs reached a record high of 3,006,900. This is 52,900 more jobs than a year ago and an increase of 6,900 over the previous month.

Preliminary employment estimates for June 2023 showed Wisconsin's seasonally adjusted unemployment rate was 2.5%. The total labor force grew by 14,000 and employment increased by 10,700 over the month of June. Additionally, the state's total labor force participation rate increased to 65.3%.

Nationwide for the month of June, the U.S. unemployment rate was 3.6%, 1.1 percentage points above Wisconsin's rate, and the national labor force participation rate of 62.6% was 2.7 percentage points below the state rate.
Both of those items are pretty darned good, and it means that despite May's setback, Wisconsin has continued to be in the same moderate and relatively steady amount of job growth that we've had for most of the last 2 years. And that the state has gained over 260,000 jobs since Joe Biden took office 2 1/2 years ago.

(260,000 new jobs? Insert Scott Walker joke here).

There’s another part to the report that isn’t mentioned – May’s “largest in the nation” losses were revised down from 6,400 to 1,900. Some of that was fewer losses in manufacturing, and much of the rest was the erasure of losses in private education and health services. So even better than we thought.

Likewise, I want to give some warning to the 6,100 increase in leisure and hospitality jobs for June, because there are a lot of seasonal jobs that happen in that industry, and even with adjustments for that fact, that sector in particular may not be a sign of a longer-term trend when we look at June in isolation. And sure enough, leisure and hospitality lost 2,200 jobs on a seasonally-adjusted basis in May.

Given the sizable revisions to May and the reversals in June, I think the early reporting date for the May jobs report skews the numbers a bit, especially in areas like Wisconsin that have a lot of seasonal changes in employment between mid-May and mid-June.

With that in mind, let’s look at the net change from April to June, to take some of these calendar-related distortions out of the equation, and get a better idea of how things are really doing.

Seasonally-adjusted change in jobs, Apr – Jun 2023, Wisconsin
Accomodation + Food Service +600
Arts, Entertainment, and Rec +3,300
Prof./Bus Services +1,900
Construction -300
Health Care/Social Assist. -500
Manufacturing -2,900

While the manufacturing and construction losses are a concern, I’ll add that more people are working in those industries than they were in April – those industries just hadn’t added as many Summer jobs as normal.

Change in jobs, Apr-Jun 2023, Wisconsin Manufacturing
Seasonally-adjusted -2,900
Not seasonally-adjusted +2,900

Construction
Seasonally-adjusted -300
Not seasonally-adjusted +10,700

So let’s see if those “losses” in construction and manufacturing are merely a byproduct of a state that can’t find enough people to fill the needed positions as the weather warms, and that those sectors “gain” in August and September as there are fewer of those seasonal workers to lay off.

The increase in labor force and employment is a great sign, and the odd (seasonally-adjusted) decline in Wisconsin’s labor force from 2022 has now reversed. In fact, this month's Wisconsin labor force of 3,113,700 is a new post-pandemic high, and that's badly needed in a state’s that has a major economic concern over whether we can continue to get people to come here and stay here.

If more people wanting to work, finding jobs and the state getting record-high job levels translate into a 0.1% increase in unemployment each month this Summer, I think that’s an OK trade. And we need to continue and expand the high-employment situation we have in Wisconsin as long as we can.
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