State’s lagging economy has role in fall elections
A new report reinforces evidence that Wisconsin has lagged economically behind most Midwestern states, an issue that is certain to be a key topic in the 2014 elections.
In 2013, Wisconsin recorded a 1.7 percent increase in real gross domestic product, according to the U.S. Bureau of Economic Analysis. Among neighboring states, only Illinois with a 0.9 percent increase fared worse. Iowa was up 2.9 percent; Minnesota increased 2.8 percent; Indiana gained 2.1 percent; Michigan added 2 percent; and Ohio was up 1.8 percent.
Surrogates for the Walker administration usually are annoyed by reports or data that Wisconsin has lagged behind in recent years.
Earlier this year a University of Wisconsin-Oshkosh professor released a study that said Wisconsin has created between 32,000 and 56,000 fewer jobs since the start of 2009 than would be expected from the state’s historical job relationship with neighboring states.
Professor Kevin McGee used data collected by the U.S. Bureau of Labor, which contacts 98 percent of employers in the country to provide quarterly data. McGee used several separate models to which Wisconsin job growth would have been predicted. The average was about 45,000 less jobs for Wisconsin.
“It has been clear for some time that Wisconsin was underperforming in job growth, relative to our neighbors,” said McGee, adding that what was unclear was the size of the difference. The hardest-hit area is the service sector, he said.
“Wisconsin’s underperformance in creating private, service-sector jobs is widespread, including jobs in retail, financial and business services, and leisure and hospitality employment,” according to McGee’s report.
“It has impacted Main Street across the board,” McGee’s report said.
With a gubernatorial election less than five months away, conservatives aren’t accepting any dismal picture. They alternately contend that McGee’s math “does not add up” and if there is bad news, the blame should go to the protests in the State Capitol against changes in public-employee labor law.
Brett Healy, president of the conservative MacIver Institute, spelled out those approaches in an interview with the Marshfield News Herald.
“While the report focuses on the number of jobs created recently, and if we lag other states, this is an incomplete look at the economic situation here in Wisconsin,” Healy said.
“What is the one thing that separates Wisconsin from every other state in the nation over the past three years?” he asked. “No other state has gone through the political turmoil and instability caused by the protests and perpetual recall season that Wisconsin experienced.”
McGee said the policy shifts at the start of the Walker administration “created a lot of consumer uncertainty, and a lot of uncertainty in families across the state.” In turn, that hurt job growth and consumer spending.
“The resulting job underperformance refuses to go away,” according to McGee.
Healy said Gov. Scott Walker has done what other states do with tax credits to help businesses expand. Not mentioned were the snafus early in the Walker administration in moving job creation efforts from an agency of state government to a new Wisconsin Economic Development Corporation. The new organization lost track of some loans and that helped lead to high-level personnel changes.
Randy Cray, chief economist for the Central Wisconsin Economic Research Bureau at UW-Stevens Point, said McGee’s report reflected anecdotal evidence that the economy has been sluggish.
“My impression of the performance in the state is Wisconsin is seemingly performing less well in the recent time period and that is exactly what McGee’s study is saying,” he told the Marshfield newspaper.
“What’s causing that sluggish activity is the $64,000 question,” Cray added.
Matt Pommer, a retired reporter for The Capital Times, writes a column distributed by the Wisconsin Newspaper Association.