Friday, September 20, 2019

Wisconsin work force, jobs, economy stagnating even more

A couple of reports out this week further illustrate that Wisconsin is acting like a state that has maxed out its economic abilities, in no small part because the state was unable to get people to want to come to Wisconsin during the Age of Fitzwalkerstan. And now it is leading to a legitimate concern as to where any future growth might be going.

The Wisconsin Policy Forum came out this week with an analysis that underscored the demographic problems that are hindering the state’s economy. In particular, the Policy Forum says there have been fewer working-age Wisconsinites as the 2010s have progressed.
After peaking in 2011 at 3.6 million, Wisconsin’s working-age population has receded by over 35,000 (or 1%) since, U.S. Census data show. In fact, the state’s working-age population has declined slightly in each of the last four consecutive years. (See Figure 1.) While relatively small, this string of losses re- verses a long-term growth trend and heightens concerns about the state’s future workforce.

Making matters worse, Wisconsin’s population of youth under the age of 18 —a key source of future workers—also has de- creased in recent years. The youth population has declined by over 45,000 since 2011, a 3.4% drop. That trend is likely to continue in the future as well; our past research has shown that the state’s birth rate is at its lowest point in at least a generation, and its fertility rate (births relative to population of women ages 15 to 44) also has declined over the past decade.

And this issue of a shrinking labor pool seems to have gotten worse since the end of 2017. While the state’s labor force finally grew by 2,600 in August (as shown in this week’s Wisconsin jobs report), it’s still down by more than 21,000 since the end of 2017.

Wisconsin labor force, Dec 2017-Aug 2019
Dec 2017 3,142,100
Dec 2018 3,125,600
Aug 2019 3,121,000

In fact, while the state’s unemployment rate has barely changed in that time (3.0% in Dec 2017, 3.1% in Aug 2019), the number of “employed” Wisconsinites has dropped by 24,600.

What’s also concerning is that the Policy Forum notes that many mid- and large-size Wisconsin counties are among the largest losers of working-age people. The only notable exceptions are the Madison and Appleton areas.
Notably, the statewide decline in working-age residents has affected most though not all counties. Among the state’s 23 most populous counties, 17 have seen their working-age populations shrink since 2011. (See Figure 2 on page 2). The working-age population in Wood County (where Wisconsin Rapids and Marshfield are located) has declined by the largest percentage (-5.9%) during that period, followed by Manitowoc County (-4.6%). Milwaukee County has lost the largest number of working-age residents (-8,846).

On the other end of the spectrum, Dane County has increased its working-age population by the largest number (>15,000) and percentage (4.7%) since 2011, a trend likely influenced by UW-Madison’s attraction and retention of students from both within and outside the state. Dane County also has shown strong and steady growth in its population of youth under 18, which will help to ensure a healthy labor force well into the future.

Another exception is Outagamie County, where Appleton is located, which has seen its working-age population grow by 2.9%. St. Croix and Kenosha counties also have seen modest increases in their working-age populations, but both counties border neighboring states and many of the jobs held by their residents are located in the Twin Cities and Chicago metro areas.

This is also reflected in the fact that the state’s “growth” in the 2010s to be heavily concentrated in a handful of areas. And it reiterates that the state’s low unemployment rate hasn’t been a function of jadding jobs as much as it is a reflection of an aging state with a stagnant population.

In addition to the falling work force, Wisconsin’s job creation has stalled out over the last 2 years. The “gold standard” Quarterly Census of Employment and Wages told us that 2016 had Wisconsin's the worst growth in the 2010s, until 2018 was even slower.

It’s deteriorating further in 2019, according to the monthly reports that we have seen so far.

Change in jobs, 2019 Wisconsin
All jobs
Dec 2018-Apr 2019 -4,200
Apr 2019-Aug 2019 -2,200
TOTAL CHANGE 2019 -6,400

Private jobs
Dec 2018-Apr 2019 -2,000
Apr 2019-Aug 2019 -3,900

It’s clear that we need to improve the attractiveness of this state to stop the declines in the state's working-age population. Giving everything away to corporations, defunding public education, and paying substandard wages isn’t anything that encourages talented individuals to locate themselves and their families in the state.

The growth of Dane County gives a guide for the rest of the state - invest in quality of life, technology, openness and education makes a place more attractive. And no county is more diametrically different than the regressive economic model that the Fitzwalkerstanis designed. So unless we want Wisconsin to lag and stagnate in the 2020s like it has in the 2010s, then we need to change course, and fast. s s

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