DC Dems should laugh at Moscow Mitch, and ignore the debt limit

The Dow Jones Industrial Average was down more than 900 points for some time today before recovering some of those losses and ending up down "only" 614. Some tried to blame this decline as a correction for a Bubbly market in 2021, or fears about the Chinese property market melting down. But I think it had a lot more to do with this.

McConnell reiterates to Dems: "They will not get Senate Republicans help for raising the debt limit." Says it "might inconvenience" Democrats' plans.

Dems will need 10 Rs to pass a CR with debt limit hike, but MM says: "We will not support legislation that raises the debt limit"

— Manu Raju (@mkraju) September 20, 2021

Hmm, you know who decides whether the US government can keep borrowing money and going into debt? THE PEOPLE WHO LEND TO US, generally through the financial markets. And given that they're still willing to give Uncle Sam money at a little over 1.3% for 10 years, it seems like they don't have a lot of concerns in lending money to us.

In addition, let's go to the US Constitution, and check out Article I, Section 8, which says that paying debt is a required duty of Congress.

The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;.

And then the 14th Amendment, passed after another group of Confederates tried to pervert laws and overthrow the American government, confimred that the US will pay its debts.

Section 4. The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

You know what words don't show up in the Constitution? "Cloture" or "filibuster". Those are just customs and rules of the antiquated Senate, and they can be changed or ignored at any time.

So why would we need to have 60 votes to raise our debt limit? Or to have a debt limit at all? These future expenses (many of which are required payments to other American people and American vendors ) have already been set aside. And given that there is no law saying those bills canNOT be paid, Biden and Treasury Secretary Yellen should laugh in Moscow Mitch's face, and keep paying the bills.

Who would stop them? NO ONE. Especially when it makes people remember that a main reason these debts exist and keep going up is because of the GOP Tax Scam of 2017, which a whole lot of these GOP Senators voted for.

GOP citing Biden's $3.5 trillion spending plan to oppose debt limit hike, but Dems have advanced ~$2.2 trillion in pay-fors (w/ many more on table). Total debt impact of D plan may be $1T or less

Nonpartisan estimates find 2017 GOP tax cuts added +$2 trillion to the debt https://t.co/tNhZyZboFw

— Jeff Stein (@JStein_WaPo) September 21, 2021

They voted to run up that debt, so they've lost the right to keep those debts from being paid.

But that's GOP cynicism for you. And it's been a pattern they've followed for 40 years. Radio host Thom Hartmann gave a great rundown of this sick strategy in his blog today, which goes over GOP economic advisor Jude Wanniski's "Two Santa Clauses" idea, first espoused in a Wall Street Journal column in 1976.

Refuse to raise the debt ceiling, threaten to shut down the government, and thus crash the stock market. It’s all part of the game-plan Republican’s have been running against Democrats since 1981.

Look at the Dow: their bomb is about to drop again… https://t.co/E356ax4QWq

— Thom Hartmann (@Thom_Hartmann) September 20, 2021

First, the Two Santas strategy dictates, when Republicans control the White House they must spend money like a drunken Santa and cut taxes to run up the US debt as far and as fast as possible.

This produces three results: it stimulates the economy thus making people think that the GOP can produce a good economy; it raises the debt dramatically; and it makes people think that Republicans are the “tax-cut Santa Clauses.”

Second, when a Democrat is in the White House, Republicans must scream about the national debt as loudly and frantically as possible, freaking out about how “our children will have to pay for it!” and “we have to cut spending to solve the crisis!” Shut down the government, crash the stock market, and damage US credibility around the world if necessary to stop Democrats from spending money.

This will force the Democrats in power to cut their own social safety net programs and even Social Security, thus shooting their welfare-of-the-American-people Santa Claus right in the face.

And, sure enough, here we are now with a Democrat in the White House. Following their Two Santas strategy, Republicans are again squealing about the national debt and refusing to raise the debt ceiling, imperiling Biden’s economic recovery as well as his Build Back Better plans.

Dems should call the bluff of Moscow Mitch and the other economic terrorists in the GOP, and tell them the debt ceiling is nothing more than a theory, get a budget bill for 2022 passed with 50 votes (as part of a Constitutional requirement to fund the government and its services), and then work on the larger reconciliation bill.

Just because something is a custom, it doesn't mean it has to be followed or respected. And that's how Dems in DC should act about Moscow Mitch's antics, and the GOP's fiscal thoughts in general. And I'd appreciate it if they'd be very public with that rejection.

So who pays more and who might pay less as we pay for the Dems' big bill?

After a lot of foot-dragging and DC sausage-making, we're down to the last 2 weeks of the Federal Fiscal Year, and we're going to find out what type of infrastructure package(s) is/are going through soon enough. And we're finally starting to see how DC Dems would pay for the $350 billion a year in added services and investments, in the form of tax increases on the rich and corporate.

Here's a summary of those tax moves, courtesy of CNBC.

The House proposal would take huge steps to reverse the 2017 Republican tax cuts. It would hike the corporate rate to 26.5%, after the GOP slashed it to 21% from 35%.

Democrats would also restore the top individual rate to 39.6% after Republicans cut it to 37%.

That rate of 39.6% would kick in around $400,000 of income for single filers and $450,000 for joint filers, and jumps to 42.6% on all income past $5 million. There's also an increase in the long-term capital gains rate to 25%, which is still well below the tax a lot of Americans have to pay for actual work (and FICA taxes aren't taken out of cap gains), but it at least starts to narrow the gap a bit.

But that high corporate rate only hits for businesses that have large incomes. There's actually a tax break from the current 21% rate for corporations that have small profits, and many corporations would still have their rates remain at the lower levels under the GOP Tax Scam.

Under the House Democratic plan, the top corporate rate would apply to income above $5 million. The first $400,000 in income would be taxed at an 18% rate.

A 21% rate would apply to corporate income between $400,000 and $5 million.

Seems a bit friendly to me, but I'd imagine this would still be a net positive for revenue and increase competitiveness for small businesses.

A bigger revenue generator would likely come from adding tax enforcement agents to try to get more of the $1 trillion in taxes that aren't collected due to tax-avoidance schemes.

The plan would invest nearly $79 billion in IRS tax enforcement to increase revenue raised.

This would seem to be a no-brainer for anyone who's not a Koch-sucking sellout. Adding revenue agents has been extremely effective in Wisconsin, with a payback estimated at 38 to 1, and there are much bigger kahunas to nab/settle up with in the rest of the country (as well as international tax-dodgers).

We haven't seen a score on these tax proposals as of yet, and how much of the $350 billion a year in added spending is covered by those moves. We also haven't seen what's going to happen with the cap on deductions for State and Local taxes (SALT), a move in the 2017 GOP Tax Scam that hamered people in big cities in blue states, and is something that has been a target of change by many Dems that got elected from higher-income suburbs in those areas.

The SALT Cap stops write-offs at $10,000 for the combined total of state taxes (usually income taxes) and local taxes (often property taxes but some other ones, depending on where you live). And you can see that many Wisconsinites around the 2 largest metro areas were susceptible to the SALT Cap.

And it could prove to be a main sticking point in getting all of the Dems' bill finished, as Coastal Dems (especially) have threatened to hold up the whole thing until the SALT Cap is dealt with.

Last Friday, the House Ways and Means Committee unveiled its proposal for tax reform and it did not include a decision repealing the SALT caps. In response, committee chairman Richard Neal, D-Mass., and three other congressmen from New York and New Jersey shared a joint statement on Monday to make clear their commitment to pushing for SALT relief.

"With Speaker Pelosi, we continue to work among our colleagues and the Senate to undo the shortsighted capping of SALT by Republicans," they wrote. "We are committed to enacting a law that will include meaningful SALT relief that is so essential to our middle-class communities and we are working daily toward that goal.”...

In a sign of frustration from the party’s moderate wing, Rep. Tom Suozzi, D-N.Y., warned Monday that he was set to reject the spending bill if there was no SALT relief included, and he made his position clear to congressional leaders.

“I have been consistent for six months. No SALT, no deal,” Suozzi said in a statement.

This has led to pushback from other Dems in Congress, although one prominent member seems to have moved off of her previous position of saying any type of removal of the SALT Cap was a disgrace.

I am open to taking a look at SALT and addressing concerns for families put under the squeeze in high cost of living areas.

But a full 100% SALT repeal means major tax breaks for extremely high-net worth individuals and billionaires. Why do that? 🙅🏽‍♀️

— Alexandria Ocasio-Cortez (@AOC) September 17, 2021

AOC's main point about regressiveness is true - if the SALT Cap was removed entirely, it would give a sizable break to the upper-middle class and upper classes. The Tax Foundation came out with this chart showing the effects under the Biden/Dem plans, which notes that while the richest Americans would still pay more taxes, the hike would be a lot less with a full repeal of SALT.

It seems to me that an easy solution is to raise the cap to $20,000 for married couples filing jointly, but keep everything else the same. That's the real problem with the way the SALT Cap works today - dual-earning couples have the same $10,000 cap as a single person, which doesn't match up with most of the rest of the tax code.

And in a time when people are paying higher property taxes with rising property values, more homeowning couples are getting hit by the SALT Cap and seeing no change or tax increases under the Tax Scam (raises hand). And it's a discouragement from having other buy/keep houses, since there's no incentive to write-off property taxes or home mortgage interest for a lot of people, and the housing market might need all the support it can soon enough.

Lots of moving parts, and they need to come together in the next 2 weeks or so. Keep your eyes and ears open, as the positive effects of the new servides and supports are a big econmomic boost by themselves, but if some "centrist" sellouts are concerned about the price tag, then these tax provisions can go along way toward limiting the increases in deficit and debt.

After months of gains, Wisconsin thrown for sizable job loss in August

We knew there had been a drop in job growth in the country in August, but I don't think many of us thought we would see what we saw in the Wisconsin jobs report that came out on Thursday.

Place of Residence Data: Wisconsin's labor force participation rate in August was 66.5, 4.8 percentage points higher than the national rate of 61.7 percent. Wisconsin's unemployment rate in August was 3.9 percent, while the national unemployment rate was 5.2 percent in the same month.
Place of Work Data: Wisconsin lost 8,200 private-sector and 10,400 total non-farm jobs in August 2021.

10,400 jobs lost? UGH!

It was especially surprising coming after several months of job gains in the state, including 16,500 jobs added in July. Which almost makes me wonder if both reports exaggerated ups and down in a time when there were small gains over both of those months.

In digging into the report, the losses were heavily concentrated in health care/social assistance (-6,500) and manufacturing (-2,700), but there were also notable declines in real estate (-1,000) and professional/business services (-1,500). Interestingly, one sector that did see decent job growth in August was one that we keep seeing stories about short staffing - leisure and hospitality (+2,900). Although that sector still has a ways to go before we get back to pre-COVID levels.

August's number was also a surprising loss because there had not been a notable increase in the state's unemployment claims of any sort in late July and August. Claims were also lower than the levels we were seeing in months like May and June, when Wisconsin was gaining jobs.

You'll also see that the drop in unemployment claims has continued after August, but the shortages in labor remain, so the WMC-style argument that "unemployment benefits are making people stay at home" doesn't hold water. And mediocre Wisconsin business owners that try that tired meme quickly fail once their claims and their business are given even a tiny bit of investigation.

A DeForest restaurant that received nearly a half-million dollars in relief funding closed Monday with the owner leaving a note on the door blaming Evers and Biden. But the owner said Thurs the real reason was because the lease was up. https://t.co/HbTECVz9e4 via @samarakalk

— Molly Beck (@MollyBeck) September 16, 2021

That said, I can believe that this guy may not have been able to find workers at wages he was used to. But it's not Dem policies that are causing more Wisconsinites to leave jobs for a variety of reasons, or why they have yet to be replaced. Heck, we haven't had a raise in the minimum wage despite the fact that almost all entry-level job openings are (publicly) asking for $12-$15 an hour.

I think the COVID World and its disruptions have changed the game, less in the sense of businesses closing, but more because a lot of people aren't willing to put themselves at risk with certain jobs - at least not at the low pay that they accepted before. Something different has happened in 2021 as we first came out of the COVID Winter, and then COVID resurged and in-person school resumed later in the Summer. And it especially was odd in August.

Maybe Wisconsin's job loss is a statistical blip that gets reversed with gains in September, or maybe labor market conditions are drastically changing as school begins and weather cools. If it's the latter, we may need to resume a "relief/support" mode of economic policy, instead of thinking things are going to work themselves out and staying away from active measures and aid.

COVID keeps coming back in Wisconsin, but if you're vaxxed, it won't hit you as bad

A couple of recent updates of COVID figures from the Wisconsin Department of Health Services gave some illuminating information about where we stand today.

The first is negative, as COVID cases have jumped back up in the last week after a two-week plateau. More than 3,400 new cases were reported on each of the last 2 days, putting the 7-day average over 2,000 for the first time since Joe Biden took office as president, and coming 10 days before we broke through 2,000 new cases last September.

The DHS’s breakdown of cases by age generally lags by a couple of weeks. But even with that incomplete total, you can see that much of the recent increase is driven by children under 18 catching COVID (as shown in blue), which coincides with the start of the school year.

By contrast, another bit of COVID information from DHS gave me a lot of comfort, which was the monthly release comparing COVID outcomes between vaccinated and unvaccinated Wisconsinites. DHS gave their full “age-adjusted” figures for August, describing the age adjustment in this way.

Age adjustment, or age standardization, is used in epidemiology to allow populations to be compared directly when the age distribution of who most commonly gets the disease, or seriously sick from the disease, is skewed. Almost all diseases or health outcomes occur at different rates in different age groups, and that is true of COVID-19. Older populations are, in general, more likely to experience severe illness and death due to COVID-19.

In the case of the COVID-19 vaccine, older populations were eligible to receive the vaccine before younger populations. As such, they represent a larger proportion of the fully vaccinated population. On the other hand, younger populations represent a larger proportion of the not fully vaccinated group. In order to more fairly compare rates of hospitalization and death among fully vaccinated and not fully vaccinated groups, we do an age adjustment so that the overall rates are based on the same population proportions. This is similar to calculating a rate per 100,000 in order to compare rates across populations of different sizes.

Those age-adjusted figures show significant disparities in what happens to people afflicted with COVID-19, depending on whether or not they are vaccinated.

We’ve updated our COVID-19 Illness After Vaccination data to reflect #COVID19 case, hospitalization, and death rates among people who are fully vaccinated and not fully vaccinated for August 2021. See the data and get more information: https://t.co/fCpD0Wcr9q pic.twitter.com/GJXLxtjERF

— WIDeptHealthServices (@DHSWI) September 15, 2021

But the overall figures (even with DHS’ attempts to adjust for age) are selling short how much better the outcomes are for vaccinated Wisconsinites. Here’s a look at the rate of hospitalization among the various age groups.

As you can see, for Wisconsinites under the age of 65, the unvaccinated are between 11 and 15 times more likely to end up in the hospital with COVID-19, no matter the age group. The death disparity is even more stark, given that DHS says zero vaccinated Wisconisnites under 55 have died of COVID.

Being in the 45-54 age bracket myself, those figures make it seem like I don’t have all that much to worry about if I should get COVID. It still wouldn’t be good – I know a couple of people that have had breakthrough cases, and they describe it as kind of severe cold or case of the flu that lingers for several days – but it does seem that I don’t need to worry as much about how bad things will get if I get hit with the virus.

It’s also worth noting that I live in Dane County, which has the highest vaccination rate in the state (81.7% of adult residents are fully vaccinated), and the second-lowest rate of infection in the state, as shown by DHS’s 14-day summary figures that came out on Wednesday. Dane County’s levels of new cases are more than 40% below the state as a whole, and that figure came over the same 2 weeks that 2 rural counties reached “extremely high” rates exceeding 1 per 100 people.

Given that the UW-Madison campus is more than 90% vaccinated, it’s possible we will not see the spike in cases here that we saw last September. And that, along with the much safer outcomes among those who are vaccinated make me think that I don’t need to live in as worry about what might happen should I get the virus.

The outcomes on getting vaccinated is much like how driving sober and with a seat belt on makes me less likely to get into a car crash, and more likely to survive any crash that does happen. Seems like a generally good plan, and I have a little more confidence in being able to go out and do what I want to do, in the times and places I want to do them. But I’ll keep masking up indoors and still dining/drinking outdoors for the most part (for now), because who wants to be a potential carrier for the unvaccinated young and the more-susceptible old?

Confirmed - COVID relief programs kept millions of Americans from going under in 2020

While there was a wealth of information that came out from today's annual Income and Poverty report from the Census, this stat blew me away.

Absolutely incredible: Census says poverty rate **fell** in 2020 ***during one of the worst labor market shocks in US history***, due to the combo of stimulus checks/federal relief that reached millions both in and outside the workforce. Reflects limits of jobs to reduce poverty. https://t.co/rgOKZo50qi

— Jeff Stein (@JStein_WaPo) September 14, 2021

That's despite a drop in median household income of more than $2,000, and the largest job losses since the Great Depression. So how did that happen? Let's go into the Supplemental Poverty Measure, and go over the difference between the supplemental figure and the “official” poverty measure.

Income used for estimating the official poverty measure includes cash benefits from the government (e.g., Social Security, unemployment insurance benefits, public assistance benefits, and workers’ compensation benefits), but does not take into account taxes or noncash benefits aimed at improving the economic situation of the population. The SPM incorporates all of these elements, adding cash benefits, noncash transfers, and stimulus payments, while subtracting necessary expenses such as taxes, medical expenses, and expenses related to work. An important contribution of the SPM is that it allows us to gauge the potential magnitude of the effect of tax credits and transfers in alleviating poverty. We can also examine the effects of nondiscretionary expenses such as work and medical expenses.

What’s remarkable is that the Supplemental Poverty Measure has traditionally said poverty is worse than the official measure, due to the high cost of living in many places and other expenses. That flipped big-time with the huge boost in assistance after COVID broke out and millions were thrown out of work.

The Census Bureau quanitifes the effect that the social programs and costly expenses have on either putting people out of or into poverty, and it is quite illuminating.

Figure 8 shows the effect that various additions and subtractions had on the number of people who would have been considered poor in 2020, holding all else the same and assuming no behavioral changes. Additions and subtractions are shown for the total population and for three age groups. Additions shown in the figure include cash benefits, also included in the official measure, as well as noncash benefits included only in the SPM. This allows us to examine the effects of government transfers on poverty estimates. Since child support paid is subtracted from income, we also examine the effect of child support received on alleviating poverty. Child support payments received are counted as income in both the official measure and the SPM (but child support paid is only deducted in the SPM).

Social Security is a typical support that keeps millions afloat, but look at how the next four items helped to keep Americans out of poverty in 2020. All of those items were part of COVID relief packages, from stimulus checks, to expanded unemployment benefits, to the Child Tax Credit and other breaks, and in the Feds covering more of the cost of SNAP and school lunches.

Locally, Wisconsin was one of 30 states to have a significantly lower Supplemental Poverty Rate (6.9%) vs its “official” poverty rate (8.3%) – affecting 88,000 state residents (imagine if we had expanded Medicaid on top of it!). While we lost jobs and had shutdowns like everyone else, it does seem like the state survived 2020 better than many others, and fortunately we have a Governor who believes in using COVID relief funds for actual services and subsidies to hammered industries, along with continuing expanded unemployment benefits. That seems to be doing a better job at allaying poverty than trying to score points with Trump trash and allowing this pandemic to continue, while banning measures that may mitigate the spread of COVID (Hey there, Confederacy!)

The lower SPM also shows the danger that comes with allowing the COVID relief measures to fade away with no additional supports to replace them, as so many Americans remain close to the edge, with the country still 5.3 million jobs below our pre-COVID peak. Fortunately, the Dems' infrastructure plan in DC would expand services such as child care and long-term care that try to remove barriers to work and keeps from driving people into poverty, while keeping the child tax credit that was crucial for so many Americans in the tough times of 2020.

Poverty in the US declined during the pandemic because out imperfect political system sort of worked. What this graph shows is that the level of poverty in the US is a choice and that the social safety net works if given a chance. pic.twitter.com/5oeTT86lvA

— Don Moynihan (@donmoyn) September 14, 2021

I also don't think it was a coincidence that these measures were put in place when a Republican president and Republican Senate were trying to stay in power in 2020. Even GOPs know that helping the poor, providing a robust safety net, and giving checks to most Americans helps the economy even in the worst of times. Which tells you that their crocodile tears about deficits and debt in 2021 has everything to do with trying to hurt Dems' chances in 2022, and nothing to do with any kind of real beliefs.

Food prices are having a big-time rise, but Wisconsin dairy farmers may be getting left behind

If you've gone to the grocery store and/or out to eat, prices for meat and other food certainly seems to have been on the rise at the store in recent months, and it’s also costing more for companies to buy those meat products further up the production line. We saw that reiterated in the Producer Price Index report that came out on Friday, which continued a rise in overall prices that businesses have to pay, and food was a main reason why.

…The index for final demand goods moved up 1.0 percent in August after increasing 0.6 percent in July. In August, half of the broad-based advance can be attributed to a 2.9-percent rise in prices for final demand foods. The indexes for final demand goods less foods and energy and for final demand energy also moved higher, 0.6 percent and 0.4 percent, respectively.

Product detail: About a quarter of the August advance in prices for final demand goods can be attributed to an 8.5-percent rise in the index for meats. Prices for residential natural gas, industrial chemicals, processed young chickens, motor vehicles, and steel mill products also moved higher. In contrast, the index for iron and steel scrap decreased 3.7 percent. Prices for diesel fuel and for natural, processed, and imitation cheese also moved lower.

The prices paid to food producers are now up 12.7% in the last year, and for the last step before going to stores, restaurants and final sale places, food prices are now up 24.9% compared to August 2020.

The Biden Admininstration thinks this rise in prices isn't entirely market-driven, and is planning to increase oversight of the major meat producers in the country. The Administration claims those businesses are cornering the market, and are using that power to raise prices as a result.

As part of a set of initiatives, the administration will funnel $1.4 billion in COVID-19 pandemic stimulus money to small meat producers and workers, administration aides said in the blog post. They also promised action to "crack down on illegal price fixing."

Four companies slaughtered about 85% of U.S. grain-fattened cattle that are made into steaks, beef roasts and other cuts of meat for consumers in 2018, according to the most recent data from the U.S. Department of Agriculture (USDA).

Biden Administration officials note that large meat producers were bailed out by CARES and other federal assistance in 2020, and have been helped by the higher demand that has come from those COVID relief measures. But now those same companies are able to get increasingly higher prices for their products, at the (literal) expense to many other Americans.

Price increases in beef, pork and poultry have driven half of the increased prices Americans have paid for food they eat at home since December, the White House said. The administration sees those companies collecting too much profit after the stimulus helped prop up demand for their products.

"We've helped sustain this market, and it's frustrating to see these companies turn around and raise prices," Bharat Ramamurti, deputy director of the White House's National Economic Council, said in an interview. "What we see here smacks of pandemic profiteering and that is the behavior the administration finds concerning."

It's clear that someone’s making a lot of money in the markets for the raw materials, but it’s definitely a costly situation for those at the end of that processing line. These price increases are widespread across a lot of key types of food. And the recent increases are just the latest bump up in a sizable rise over the last year.

But there’s one group of food producers that aren’t paying or getting better prices these days, and it’s a group that’s especially relevant to Wisconsin.

And overall milk prices have given back the gains they had in the 2nd half of 2020, and current futures have milk prices going lower through September.

Which means we may well need targeted relief for dairy farmers at the same time that the Biden Administration is going after meat producers for having their prices go up by so much.

We’ll see tomorrow how much of these added costs at the producer level are being taken out of the wallets of consumers when they buy this food, with the release of the Consumer Price Index numbers. And given the jump in producer prices for food, that CPI number may well continue on the rise for at least a few months, that may not necessarily be a bad thing on its own, as wages and associated demand have been going up, as annoying as some of the higher prices may be.

But if consumers drastically change habits in the coming weeks in the face of the higher prices, some of these producers (small and large) might get thrown for losses....or at least have their large profits limited. Which may not be so bad for the consumers' pocketbooks, but might ripple into the job market unless handled correctly.

QCEW figures show we still had a lot of service jobs to fill after COVID Winter

As Summer winds down and we continue to add jobs, we can think that everything is relatively back to normal in Wisconsin’s job market. But a recent report should remind us that things are not normal, and that we are still dealing with a quite different market than the one we had at the start of 2020, with a sizable amount of jobs in some areas yet to come back.

The “gold standard” Quarterly Census on Employment and Wages (QCEW) had its full data set for Q1 2021 released on Sept. 1, going over the 12 months between March 2020 and March 2021. That’s a key endpoint, as this was when COVID-19 vaccine was starting to be widespread, and cases were falling after a brutal winter. It also marked 1 year after COVID-19 started to hit the economy, and it gives a good indication on how far we had to go at that time.

Nationwide, there were clear differences in job change between states that were more likely to have COVID restrictions in March 2021, and many southern/rural states that didn’t have so many restrictions at the time.

Now, whether that’s a sign the southern/rural states were winning or losing in their economic strategy during the COVID era? I’ll leave that up to you, but I don't think those places are winning in any fashion these days.

You can see that Wisconsin wasn’t as far back as most the other Midwestern states (only Iowa and Indiana had smaller losses by March), and that the US in total was in a bigger jobs hole than we were.

Change in all jobs, QCEW Mar 2020-Mar 2021
US -6,609,296 (-4.5%)
Wis. -106,280 (-3.7%)

In the 4 months measured since then, the (seasonally adjusted) jobs totals have the US gaining 2,764,000 jobs, so a little more than 40% of the gap that existed in March 2021. Wisconsin’s rate of add-back has been slightly less, with 35,800 jobs added (just over 1/3 of the losses), but given that we weren’t as far down, that’s to be expected.

That means we still have quite a ways to go to return to that March 2020 level of employment, and some industries have longer to go than others. Dig into the QCEW Wisconsin figures, and it reminds you of how uneven the job losses were.

And there were major differences within Wisconsin counties as well. 7 of 72 counties actually added jobs over those 12 months, but 10 counties were still down 5% or more in March. And both ends of the spectrum were widely dispersed throughout the state.

Those huge losses in Leisure and Hospitality were even larger in the state’s most-populated metro areas, with the 2 most-populated counties losing more than 1/4 of their jobs in that sector.

While sports fans and hotel guests have returned to places like Milwaukee, Madison and Green Bay, that doesn’t mean everyone is back, or that a lot of businesses that were shut down in March 2021 have come back and/or been replaced. Just like me, I’m sure you can name quite a few places in your community that were casualties of the pandemic, even with aid coming from state and federal sources to try to keep them afloat.

The last jobs to gain back are going to likely be the most difficult. From a demographic side, there are a whole lot of excess deaths complicating the situation (both in lowering the number of potential workers, and in the amount of demand that would be out there to encourage hiring). And like we’ve consistently seen over the last 30 years, once a business lays off workers, they aren’t as quick to hire them back, or get the workers to come back. Even as business comes back.

However, a key difference in late 2021 is that many workers aren’t willing to put themselves back in those lower-paying service jobs and other positions that deal with the public (and therefore increase exposure to COVID), at least at the same rates of pay they were given before. And that also helps explain how we can have these shortages of staff despite a big job hole, because while demand may be back to pre-COVID levels in a lot of sectors, it’s not the same world that we had at the start of 2020.

Now throw in the COVID spike that hit in August and the issues that Wisconsin schools have had in filling teaching and school bus driver positions, and you have a lot of variables that are changing the job market and typical September operations.

Lots to ride out here, and I’d be a fool to try to predict what it means for what kind of job growth we might have for last 4 months of 2021, and in which sectors.