Building tomorrow's economy

CABLE -- The nature of the Northland's economy is changing as baby boomers retire from the labor market.

Addressing the mass exodus of workers and their accumulated experience will require a better solution than just slapping another person in the job. It's going to take a new focus -- a people focus -- experts said during the fifth annual Northwest Wisconsin Business Development Conference.

Ideas about economic development must change if Northern Wisconsin is going to thrive, said Jerry Hembd, associate professor with the University of Wisconsin-Superior and UW-Extension of Douglas County.

The focus of economic development during the last 50 years has been on attracting, retaining and expanding industry to create jobs. While that remains an important part of the equation, he said economic development in the future will have to consider how to attract, retain and expand the talents of people who will fill those jobs. After all, 75,000 people in Northeast Minnesota and northwestern Wisconsin are expected to exit the workforce in the next 10 years. Baby boomers have already started to leave the job market en masse, Hembd said.

Workforce development experts are hopeful an economic development model that focuses on the talent and creativity of people will help bridge the gap and fill the need in a changing economy.

"A simple way of looking at the creative economy model of development ... is it shifts the focus to 'how do we attract, retain and expand our pool of human talent and creativity,'" Hembd said. "Rather than a business and industry focus, it's a people focus."

Wisconsin's predicament

Wisconsin and the northern part of the state in particular are facing some serious challenges, said Terry Ludeman, former chief of the Office of Economic Advisors, Wisconsin Department of Workforce Development.

Among the challenges:

• Low wages: Median wages fall far short of the national average -- $39,000 -- coming in at about $34,000 annually, Ludeman said. That compares with about $41,000 in Minnesota and $40,500 in Illinois, he said. While Wisconsin has a higher than average labor participation rate among women, the state ranks 46th in wages earned by women. Ludeman said.

• Low productivity: Wisconsin ranks 45th in the nation when it comes to worker productivity. "It's no wonder our wage structure is terrible," he said. "We don't produce enough."

• Slow population growth: Wisconsin ranks 29th, considerably slower than the United States. "Minnesota -- that rural state next door -- they are going to pass us in the Census in 2010," Ludeman said.

• While Wisconsin ranks high in educational attainment, it ranks low in people who are highly educated. While Wisconsin ranks 19th in the number of engineering and science majors that graduate, it ranks 44th in the number of those majors working in Wisconsin's workforce, Ludeman said. Wisconsin led the losses in the Midwest with the loss of 52,000 college graduates, Ludeman said. Overall, the Midwest is gaining college graduates, and they're going to Minnesota, he said. While educational attainment has risen in Wisconsin, the majority of those who do hold advanced degrees are 44 or older.

"We don't get much from a college degree when a person is 75 years old," Ludeman said.
It's not all bad news.

"We are seeing a fairly fast increase in the number of jobs," Ludeman said. "Back in the 1980s period, we had 1,950,000 jobs statewide ... today we have 2,840,000 jobs. That's adding about 40,000 to 42,000 jobs per year to our job base that's likely to continue into the future because it's largely based on need of older people for services to be provided to them."

He estimates the vast majority of that annual increase -- about 30,000 jobs -- has been in health care.

While the national population average for baby boomers is 26 percent, Ludeman said that generation makes up about 31 percent of Wisconsin. That older population is going to have to be replaced year by year, he said. At the same time people are leaving the workforce, Ludeman said the number of young people to fill those jobs is declining.

"So here we are in the state talking about economic development as though workers didn't matter," Ludeman said. "Hello. It's what the economy's all about. When we talk about knowledgeable workers, when we talk about creative workers, that's what it's all about. It's about making sure that you, as a company, have all the people around you that can do all the things that need to be done. That's clever, trained, educated, etc., kinds of workers. And if we don't do something about it, we're going to be in trouble in this state. We already are, in my opinion."

Finding solutions

While the creative economy is typically an urban-centered notion, there also are rural implications, Hembd said.

"Historically, economic development organizations were in the business of creating more jobs, because they had people coming into the labor force" Hembd said. " ... As we reach a situation where the labor force may not be growing and in Northwest Wisconsin, when we may start to see a decline in the very near future, it's less creating jobs and bringing industry ... and making sure we have the people and talent that are going to be filling the jobs that are going to be opening up in the next five to ten years. It's a very different dynamic. It sort of puts people very front and center."

There is the industry side and the human side when you're talking about a creative economy, said Matt Kures, a GIS specialist with UW-Extension Center for Community and Economic Development. Education, technology, quality of communities and social capital are all considerations in building the economy of the future, he said.

"It kind of flips how we've done for economic development in the past on its ear," Kures said.

By the creative economy, Kures said it isn't just highly-educated workers or artists, but people who use creative thinking to accomplish their tasks in the workplace. Medical workers, managers, research and development, technology and a host of other fields rely on human creativity.

Wisconsin is slightly lower than average when it comes to people working in creative sector occupations, Kures said.

"It's not about states or communities; it's about regions," Kures said.

One of the keys to economic development in a creative economy is the creation of a thick labor market, Hembd said. He said to create that mass; Northern Wisconsin has to think on a regional level to create the kind of variety, diversity, authenticity and job opportunity that draws people to the communities.

"How do we nurture communities so that communities become places that young people, particularly young families, young women and creative young workers want to live?" Ludeman said. "People don't just go for money. They go for all the things a community can bring. We have an opportunity in Wisconsin to begin creating all those things that people want to be a part of that community." While individual communities in this part of the state may not be able to provide everything, working on a regional basis, he said smaller communities in northwestern Wisconsin can provide the amenities people are seeking.

"Let's start doing some of these things and finding ways to make communities creative, clever places for people to be ... we have to find a way to make ourselves attractive to people, particularly for young people to move in," Ludeman said.

Shelley Nelson can be reached at (715) 395-5022 or snelson@superiortelegram.com .