Wednesday, March 25, 2015

The real damage in Wisconsin- bad wage growth

A lot of attention has been given to Wisconsin's lousy "40th place in the U.S." jobs record that came out as part of last week's release of the Quarterly Census on Employment and Wages (QCEW). And rightfully so, as Scott Walker was elected in 2010 on a promise to improve the state's economy, and is trying to avoid this fact as he talks up his record to out-of-staters as he campaigns for president. But the other element to that report might deserve even more attention, as Wisconsin was even worse when it came to wage growth (42nd in the nation), with average wages barely keeping pace with inflation, and Wisconsin's middle class being hollowed out. And Walker's recent signing of (right-to) work-for-less legislation will only make this trend of lagging Wisconsin wages even worse.

Here are four statistics form the QCEW that illustrate Wisconsin's awful record on wage levels, and its lack of wage growth.

Average private sector weekly wage, Sept 2014
Ill. $982
Minn $971
Mich $881
Ohio $846
Wis. $809
Ind. $797
Iowa $783

Change in avg. weekly private sector wage, Sept 2013-Sept 2014
Iowa +3.87%
Ohio +3.30%
Ill. +3.15%
Minn +2.75%
Mich +2.44%
Ind. +1.79%
Wis. +1.76%

Sure doesn't look like skyrocketing wages were a problem in Wisconsin, were they? Sure makes you wonder if that was a reason why the Legislature and Walker slammed through work-for-less in the rushed manner that they did. Or maybe it was Walker's desperate attempt to curry the favor of the oligarchs at the 21 Club in NYC, since he and the Legislature changed course on work-for-less right after Scotty hung out with them on one of his campaign trips.

This is especially true when you look at Wisconsin manufacturing, which already paid some of the lowest wages in the Midwest, and those wages weren't going up by very much. In fact, these lists might help explain the fictional Wisconsin "wage gap" that greedy business owners constantly harp about, because the problems these places have in finding workers are really a reflection of the better wages that are paid Wisconsin's neighbors in Illinois and Minnesota attracting talent.

Average weekly wage, manufacturing, Sept 2014
Ill. $1,189
Minn $1,167
Mich $1,157
Ind. $1,050
Ohio $1,048
Wis. $994
Iowa $986

Change in avg. weekly manufacturing wage, Sept 2013-Sept 2014
Ill. +4.76%
Ohio +2.85%
Iowa +1.97%
Ind. +1.94%
Minn +1.92%
Wis. +1.84%
Mich +0.35%

Hmm, how's that "work-for-less" thing working out for Michiganders that work in manufacturing? Oh wait, it's working EXACTLY how the greedheads want it to.

Now combine the weak wage growth with the numerous about of corporate tax cuts that have been handed out by Walker and the Wisconsin GOP over the last four years- tax cuts that are leading to higher-than-expected rent-seeking, and exploding budget deficits. Combine that with the weak wage growth, and it tells you that Wisconsin workers were already being ripped off, with the gains from their productivity being redirected to their bosses, even before work-for-less passed.

The result is the speeding up of a bad trend of increasing inequality in Wisconsin since the start of the Bush years, resulting in the Pew Charitable Trusts releasing information this week showing that Wisconsin has lost more people out of its middle class than any state in the nation since 2000. This "middle-class" figure is defined as households that make between 2/3 and 2 times the median household income, and as you can see, despite real median household income dropping, we still saw this large exodus out of the middle class.

Median household income, Wisconsin, 2013 dollars
2000 $60,344
2013 $51,467

% of households with "middle-class" income
2000 54.6%
2013 48.9%

So explain to me how this trend of stagnant wages and higher inequality is going to be reversed by doubling down on the same anti-worker, trickle-down BS that landed us in the mess we stand in today in Wisconsin? Someone should ask that of our fair Governor as he galavants around the country, since he still, you know, pulls a paycheck from us.

1 comment:

  1. Jake,

    Sorry to post off-topic but I have a fine visualization tool at the Pew Charitable Trusts that illustrates what I have been saying about Wisconsin's tax collections:

    Wisconsin's tax collections had struggled out of the 2008 recession until the 2nd qtr of 2014 when collections fell dramatically and again in 3rd qtr 2014 which saw them sink below the collection rate of 2008. We are now in the process of sinking to the levels of Kansas, Ohio and Michigan which, earlier than Wisconsin, enacted tax laws changes to cut their tax revenues and are now mired 10% below their pre-recession peaks. The delayed effect of the M&A credit will probably continue to push the state in that direction.