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Only Governor Without College Degree Gets Record-Low Unemployment Rate for His State

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Observers of Wisconsin’s sizzling economy see its success rooted in sound fiscal management by the legislature and governor, but they also point out a few concerns underlying the state’s record-low 2.9 percent jobless rate.

Numbers released by the federal Bureau of Labor Statistics this month showed Wisconsin’s unemployment rate for February ranked sixth in the nation. And the percentage of state residents who are working or want to work stands at 68.6 – the fifth highest such rate in the country, the latest statistics indicate.

BLS state comparisons also show that the uptick in Wisconsin manufacturing jobs from December to February outpaced nearly every other state in the nation.

“The record-low unemployment rate is a crystal-clear sign that the policies of Gov. [Scott] Walker and the conservative legislature are working to improve the lives of Wisconsinites,” Chris Rochester, spokesman for the John K. MacIver Institute for Public Policy in Madison, told Watchdog.org in an email. “Those policies have created a friendly environment for businesses to relocate and grow in Wisconsin, as evidenced by our state jumping from the bottom 10 to the top 10 states to do business in Chief Executive magazine’s rankings during Walker’s tenure.”

Wisconsin now has what amounts to a labor shortage, according to Rochester. The need for additional workers to keep the state’s economy humming makes a strong case for Walker’s welfare-to-work reforms, he said.

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“While the left offers cheap shots and platitudes about raising the minimum wage, conservative reformers have a track record of positive results,” Rochester said.

Scott Manley, senior vice president of government relations for Wisconsin Manufacturers and Commerce, said the record low unemployment has a downside: the state’s labor pool is no longer big enough to match the number of job openings. But Manley remains bullish about the state economy’s future.

“I think most businesses view these numbers as very good news because they’re great economic indicators to us,” he told Watchdog.org.

A recent survey of WMC members found that 80 percent have difficulty hiring new employees, Manley said.

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“This is the biggest challenge employers are seeing in this economy,” he said.

That tends to be good news for workers, according to Manley, because competition for jobs is putting upward pressure on wages in the state. A plurality of WMC members predict that wage growth would be higher than 3 percent this year in Wisconsin, he said.

One historical concern is that an annual out-migration of residents has kept population growth low. But last year’s announcement that the Taiwan-based electronics giant Foxconn will build a major factory in southeast Wisconsin offers a big reason for the state’s college graduates to stay put, according to Manley.

“The good news is we’re making progress on the out-migration issue,” he said, noting that Foxconn would bring additional opportunities to the state.

The company is projected to add 13,000 new high-paying jobs and $10 billion in capital investment, according to the governor’s office.

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“This will ultimately become a magnet for workers from other states, in the same way the Dakotas became a magnet for talent when shale oil was developed,” Manley said.

Wisconsin has a great story to tell, including a low cost of living, a respected K-12 education system, relatively low housing costs and a world-class university system, he said.

But state residents also face relatively high state and local tax burdens, including the ninth highest personal income tax rate in the nation, according to Manley.

The governor’s welfare reforms will have a positive effect on the tens of thousands of able-bodied adults who are not in the labor force, he said.

“The governor’s reforms will force a number of those folks to get back in the job game,” Manley said.

The latest job statistics show that almost everyone is involved in the labor market, according to Dale Knapp, research director for the Wisconsin Policy Forum, so there’s little slack left.

“It’s good news for the state in terms of almost everybody’s working that wants to work,” Knapp told Watchdog.org.

One concern historically is that the northern part of the state has not shared in the progress that has occurred in other regions of Wisconsin, he said. Young people who graduate from college in the north tend to migrate to the more prosperous southern parts of the state or to other states, according to Knapp.

“Since the recession, much of the north has not participated as much as the south in the economic growth,” he said.

Wisconsin is also sailing into some policy crosswinds, Knapp said, noting that recent federal income tax cuts and the passage of a stop-gap spending bill in Congress will likely stimulate the state’s economy.

“At the same time, you have the imposition of tariffs … which are never good” and threaten to slow growth, he said.

This story originally appeared on the Watchdog.org website.

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