Breaking with Tradition in Wisconsin: Jobs
Over the next week, the Wisconsin Budget Project will be highlighting a different piece each day from our larger publication Breaking with Tradition: How Wisconsin Lawmakers Have Shortchanged a Legacy of Investment in the State’s Future. You can access the full report on our website.
Governor Walker’s administration has placed a high priority on job creation, but job growth in Wisconsin has been slower than the national average and neighboring states.
Governor Walker pledged to create 250,000 new private-sector jobs in his first term. As of May 2014, Wisconsin was only 40% of the way to that goal. At that point, there were seven months left in his four-year term.7
Private sector employment in Wisconsin increased 4.0% between December 2010 and December 2013, based on the most reliable jobs figures available. Over this same period, the U.S. averaged private sector job growth of 6.6%. If Wisconsin added jobs at the same pace over this period as the national average, we would have an additional 57,000 private sector jobs in Wisconsin as of December 2013.
During this same period, Wisconsin has had the slowest job growth of our neighboring states. Illinois, Iowa, Minnesota, and Michigan all added private sector jobs at a faster pace than Wisconsin did between December 2010 and December 2013.8
As of the spring of 2014, the U.S. has more jobs than it did before the recession. For Wisconsin, that achievement has not yet occurred. Some neighboring states, such as Minnesota, have already returned to or exceeded pre-recession employment levels.
Investments in strong schools, safe communities, and a healthy workforce can help spur the economy, and the Legislature’s decision to reduce these investments has likely contributed to Wisconsin’s lackluster job growth.
No action on minimum wage
Policymakers took no action to raise Wisconsin’s minimum wage, which has remained stuck at $7.25 since 2009.
Several neighboring states have either raised their minimum wage or taken steps towards raising the wage. The Republican-controlled Legislature in Michigan approved an increase in the wage, and in Minnesota it is scheduled to increase to $9.50 by 2016. In Illinois, residents can vote on whether the minimum wage should be raised, after lawmakers there voted to put the question on an advisory referendum.9
Raising the minimum wage to $10.10 an hour would give a raise to one out of every five Wisconsin workers and would benefit 234,000 children in Wisconsin, all of whom have a parent who would get a raise. Nearly 8 out of 10 Wisconsin workers who would benefit are age 20 or older.10
Three-quarters of Wisconsinites support increasing the minimum wage, according to recent polls.11
New obstacles to qualify for unemployment benefits
Over the last four years, while our job creation numbers lagged the nation and the region, state lawmakers have made unemployment benefits more difficult to obtain.
Expanded the reasons for which jobless workers could be denied unemployment benefits;
Increased the job search requirements for people who are out of work; and
Required that workers be unemployed at least a week before receiving unemployment benefits. Since most jobless workers find a job before reaching the end of their benefits, this measure has the effect of reducing the duration of unemployment benefits for most people. In total, it reduced unemployment benefits for job seekers by about $50 million a year.12
You can access the rest of the report here.
7“Latest Numbers Show Little Progress on the Unlikely-to-be-Met Job Goal,” Milwaukee Journal Sentinel, June 20, 2014.
8Analysis of figures from the Quarterly Census of Employment and Wages.
9“Minimum Wage Measures Increase in Neighboring States,” Wisconsin Budget Project, May 29, 2014.
10“Raising the Federal Minimum Wage to $10.10 Would Lift Wages for Millions and Provide a Modest Economic Boost,” Economic Policy Institute, December 19, 2013.
11“UWM Survey: Voters Support Raising Wisconsin Minimum Wage. The Question is, How Much?” Milwaukee Business Journal, June 12, 2014.
12“Comparative Summary of Budget Recommendations,” Legislative Fiscal Bureau, August, 2011.