When Gov. Scott Walker took office in 2011, Wisconsin's unemployment rate was 8 percent. Now, it’s at 3.2 percent, a fact the governor has celebrated.
But a report from from the Center on Wisconsin Strategy (COWS), a nonpartisan think-tank based at the University of Wisconsin-Madison, wants to remind Wisconsinites that the health of the economy can’t be encompassed in a single statistic.
“(The) unemployment rate, so often touted by the Governor, is just one indicator; other data helps draw a picture that is more nuanced and markedly less worthy of celebration,” it states.
For starters, that unemployment rate doesn’t apply to the African-American population in the state, the “The State of Working Wisconsin 2017: Facts & Figures” report, released Friday, said. Other areas of concern include a shrinking middle class, slow wage and private-sector job growth, and a decline in union representation.
“A lot of folks are focused on the low unemployment rate, which is of course good news,” said Laura Dresser, associate director of COWS, adding that it’s much better to be looking for work in the state now than it was in 2007. “We don’t see any of the other things moving in the right direction.”
The report points out that even that unemployment rate isn’t universally good news, as the unemployment rate for African-Americans is at 11 percent in Wisconsin, creating the third-worst racial disparity in the nation. At a national level, the unemployment rate for African-Americans is about double the white unemployment rate, but Wisconsin’s is almost tripled for African-Americans, according to 2015 data.
“For them (African-Americans), this is still a recession,” Dresser said. “That level of unemployment we call a recession. That’s a starkly different reality.”
Wisconsin also displays significant disparities between African-American and white populations in a number of other economic measures, the report showed. Data from 2015 showed that the poverty rate among African-American families (31 percent) is over five times the rate for white families (5.8 percent), making it the second worst poverty rate disparity in the nation.
Calling these disparities “a defining problem of the Wisconsin economy,” the report urged “strategies to close the racial gap in wages, outcomes, opportunity.”
The employment rate also varies by county. Dane and Iowa Counties reported low unemployment rate at 2.5 percent, while Menominee County suffered from 7.4 percent unemployment.
The report acknowledged that the state has shown positive job growth. But private-sector job growth has fallen short of Walker’s promise to add 250,000 jobs during his first term in office, and the report said Wisconsin ranks 34th in the nation in private sector job growth
For comparison, from December 2010 to December 2016, Wisconsin gained just under 180,000 private-sector jobs. Had it been gaining jobs at the national rate, it would have seen an increase of more than 300,000 jobs, the report said.
Putting those numbers in a Midwest context, the report points out that in the 1990s, Minnesota’s jobs lagged some 200,000 behind Wisconsin, but by the end of 2016, Minnesota had surpassed the Badger state.
“In the 21st century, and over the last six years, Wisconsin’s private sector job base has substantially and consistently underperformed,” the report said.
The report also addressed long-term wage stagnation. Since 1979, wages in Wisconsin have risen about 3 cents an hour, taking inflation into account. That means a full-time worker would earn about $1,800 more annually than they would in 1979.
Wisconsin is generally consistent with the national trends in wage growth; the US median wage in 2016 was $17.80 an hour, and Wisconsin’s was slightly better, at $17.96
COWS also drew attention to the fact that from 2000 to 2013, the percentage of families in the middle class decreased by 5.7 percent, the “largest decline posted by any state in the nation,” the report said.
A possible remedy to the declining middle class is strong union membership, the report said, referencing research by the Economic Policy Institute (EPI).
But since Act 10 was passed in 2011, severely limiting the bargaining power of unions, union coverage decreased from 14.1 percent to 9 percent of the workforce.
“As EPI’s recent report on unions shows, labor unions can help solve the very problems that Wisconsin faces,” it said. “With stronger unions, wages and equality can grow. Unfortunately, Wisconsin is moving rapidly in the wrong direction.”
The report concludes by saying “there is no evidence that any of the economic reforms of the last six years have changed the trajectory for the state,” excepting union coverage.
Dresser said all the problems outlined in the report are national problems that Wisconsin shares. But the policy changes under Walker were meant to add 250,000 private-sector jobs, grow the economy and move Wisconsin ahead of national averages, she said.
“We haven't moved ahead of anything,” she said.