Tuesday, March 21, 2023

Wisconsin layoffs rising in early 2023, but also lots of hiring and job openings.

What's this from Wisconsin Public Radio? "Wisconsin layoff notices up"? And "possible economic slowdown"?
Over the first two and a half months of 2023, the Wisconsin Department of Workforce Development has seen an increase in layoff notices compared to the same period last year.

So far, 1,963 workers have been affected this year. That’s more than half of the 3,821 total employees affected by layoffs in all of 2022.

But the most recent unemployment data shows Wisconsin’s unemployment rate remained low at 2.9 percent in January — better than the 3.4 percent national rate that month — according to state Department of Workforce Development, or DWD.
That seems like a big deal, and it’s within 10% of the total number of people involved in layoff notices for all of 2021. The rate of layoffs in 2023 is more in line with what we saw in the pre-pandemic year of 2019, when more than 8,500 workers were affected (granted, over ¼ of 2019’s layoffs came from Wisconsin-based Shopko, which went belly-up that year and closed all of its department stores).

However, I also see some caveats with the 2023 layoff numbers. Nearly 1/5 of the losses are duet to Marshfield Clinic transitioning 377 workers to its Family Health Center spinoff, which starts on April 1 with no net jobs lost in the process. That’s not to say that Marshfield Clinic is doing fine, as it recently announced that 222 of its workers will lose their jobs in May across several locations in the state.

Similarly, even though Yellow Corp. is closing their freight terminal on the South Side of Milwaukee, the company says it plans to move most (if not all) of those 189 jobs to its other facility in nearby Oak Creek. So while that’s an annoying disruption, it shouldn’t cause much economic damage to workers or the state in general.

But that doesn’t mean there’s nothing to worry about. In addition to the Marshfield Clinic reductions, Hutchinson Technology in Eau Claire says it will lay off more than half of their 425 employees in the coming weeks and months, and triple-digit losses at Briggs and Stratton in Wauwatosa, Hubbell Gas Utility Solutions, and Biery Cheese in Plover are going to hit in March and April.

Of course, if job openings remain high and hiring stays strong in Wisconsin, the higher number of layoffs won’t be as much of a harm. And we know that as of January, Wisconsin’s job market was going very well. The recent state-level JOLTS report says that Wisconsin started off 2023 with the highest level of job openings (as % of total jobs) in the Midwest, and the second-highest rate of hires.

Given that our main jobs issue in Wisconsin has been a lack of available workers to fill the many needs employers have, any added layoffs later in 2023 would simply balance out the labor market, and might keep things moving without too much disruption.

But let’s check back on the WARN reports in a few weeks, and see if the higher interest rates of 2023 start to bite more. Or if the pressures that were feared at the start of the year turned out to be another false alarm, much like we’ve seen for the incredible continued growth of the job market for the last year in both the US as a whole, and Wisconsin in particular.

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