Thursday, May 17, 2012

Governor Walker's Misplaced Exuberance on Job Creation

Yesterday the Governor began touting some new job numbers in a campaign ad:

You can find the DWD's press release on these new numbers here.   The essence of the press release by Secretary Newson was that the Bureau of Labor Statistics monthly job data based on the Current Employment Survey (CES) is badly flawed in reflecting Wisconsin's actual job growth under the Governor's "Open for Business" policies.   The secretary doesn't attempt to explain how the CES job survey can be comparatively more flawed for Wisconsin's job picture than the other 49 states, all of which have outperformed Wisconsin in job creation according to the CES data.  (In addition, only two states, Alaska and Montana, have shown worse overall economic growth over the past year than the Badger state according to the Philly Fed's data.)  Let's put the "comparatively flawed" issue aside for the moment and focus on whether the more detailed data that the Bureau of Labor Statistics compiles, the Quarterly Census of Employment and Wages (QCEW) data is really something for the Governor to be crowing about.  In his words: " [The Democrats] are desperate because the biggest issue they thought they had against us suddenly isn't there."

Unfortunately for the Governor, the new data he is citing really doesn't help him to establish that his fiscal policies are pro-growth.  Let's go through this by the numbers, the new QCES numbers he is now citing.

First, let's accept as true that the state's preliminary QCES numbers show job growth of some 23,000 jobs from December 2010 through December 2011.  (We won't have these preliminary numbers from the fourth quarter of 2011 audited by the Feds before the recall election on June 5.)  The most obvious question to ask is how this will translate over the next three years into a gain of 250,000 private sector jobs for the state in the governor's first term of office?  He will have to grow the economy by over 75,000 jobs a year over the next three years to hit the mark on his job creation promise.  You can go back into the historical data of the QCES and see that isn't going to happen.

Now let's look at how the 23,000 new jobs on the QCEW reports under Walker's tenure compare to the new jobs created on Governor Doyle's watch using the same QCEW data.  The short answer is that they don't compare very well.   From December 2009 to December 2010, the last full year under Governor Doyle, the state increased its employment by 33,600 new jobs.  This was an increase in employment of 1.3%, and that result outpaced all the other Midwestern states except Michigan.  So Walker's performance in the same twelve month period in 2011 lead to 10,000 fewer jobs than in Doyle's final full calendar year.   Comparing Wisconsin to the other six Midwestern states is not possible for December 2010 to December 2011, as Wisconsin chose to report the unaudited QCEW data early, and the data from the other Midwestern States is still unreported.  But if we look at the Third Quarter data for September 2010 to September 2011, it shows that Wisconsin didn't outperform a single Midwestern state in job creation.  We tied Iowa Ohio, and all other Midwestern states did better than we did.  You recall how Governor Quinn's policies in Illinois were going to send job creators flowing from Illinois to Wisconsin?  Well, Illinois created 53,000 more jobs than Wisconsin in that twelve month period, while raising taxes and protecting schools from the kind of massive cuts the governor imposed here.  Minnesota, which has fewer people than Wisconsin, created almost twice as many jobs as Wisconsin in the same period.

The QCEW data is as its name indicates, a quarterly report.  If we look at the last three quarters before the fourth quarter ending in December 2010, Wisconsin was consistently outpacing most of its Midwestern neighbors (Minnesota, Iowa, Illinois, Michigan, Indiana and Ohio) in percentage change in jobs.  In the twelve months ending September 2010, only Michigan and Indiana outperformed the Badger state.  In the twelve months ending June 2010, again only Michigan and Indiana outpaced Wisconsin.   In the twelve months ending March 2010, only Indiana, Iowa and Minnesota did better in job creation than Wisconsin.  In the quarter previous to that, only Minnesota and Iowa did better than Wisconsin.  So under Governor Doyle we regularly ranked among the highest of the Midwestern states in job creation using the QCEW data.  Again, under Governor Walker, we ranked dead last.

So the data the Governor is touting really doesn't make him look like a job creator compared to his predecessor and compared to the other Governors in the Midwest, including his good friend, Governor Quinn.

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