Wednesday, August 22, 2012

Scott Walker's Shell Game on Job Creation

 Governor Walker has manipulated federal employment data sets to try to excuse what can only be described as a very poor performance in job creation.  With every month he is falling farther behind the power curve on his 250,000 new private sector job promise.  At some point you would assume that Wisconsin Manufacturers and Commerce members who have been such ardent supporters of the governor would ask themselves if they saddled the wrong horse.  Many of these WMC members probably agree with the contention of the Romney-Ryan campaign that the slow pace of job creation nationally is reason enough to bounce President Obama out of office.  Why then shouldn't the same rationale for regime change be applied to Governor Walker in 2014, if he falls far short on meeting his job creation commitment to our state?  

To understand the manipulation of job numbers by the governor, you have to go back to March of last year, shortly after the governor was inaugurated, and follow a series of DWD press release starting on March 16, 2011.  Here is a summary of the press releases:




The governor started out in the middle of last year preening over the results found in the BLS's monthly CES employment reports.  When that data demonstrated that Wisconsin had actually lost private sector jobs in the first year of his administration, he shifted to promoting the BLS's Quarterly Census of Employment and Wages (QCEW) as the more reliable measure of his job creation performance.   But the problem for the governor is that his new preferred measure of job performance shows a result every bit as as bad as the old data.

The QCEW for the fourth quarter of 2010, the three month period ending December 31, 2010 (and the month before the governor was inaugurated) showed that Wisconsin private sector employment stood at 2,270,985.   The QCEW number at the end of December 2009 had stood at 2,237,327.  Thus, in Governor Doyle's last year in office, the state added over 33,600 jobs.   By contrast, at the end of December 2011, following Governor Walker's first year on the job, the QCEW private jobs number was 2,298,796, a net gain of less than 28,000 jobs, or 5,600 less than the Doyle Administration had created in its last year.  If you factor in the 8,300 good paying public sector jobs (federal, state and local) lost over Governor Walker's first twelve months, the stagnancy of the state's job creation efforts is even more dramatic.  (Doyle had shown a net gain of 2 government employees his last year.)

And now we have the employment data from the QCEW for April 30, 2012, which was released by the DWD on August 16th.   As of April 30, 2012, Wisconsin had 2,251,697 private sector employees, or 19,000 fewer private sector employees than at the end of December 2010, just days before the governor took office.  If we are now to use the QCEW data to judge the governor's job creation promise, he has less than 33 months to create 269,000 private sector jobs.

The CES data for July 31, 2012 was also released in the middle of this month by DWD, and here is what it showed:  Wisconsin has lost 17,800 private sector jobs since the governor assumed office.  That is a number that compares pretty accurately with the QCEW job loss number.

There is much more data to mine from the QCEW, and none of it is flattering for the governor.  The QCEW data available from BLS has a very handy map and tables application for you to quickly spin your way through the job numbers and average weekly wage data for all the states.  You can access it here.  Among the data you will find are the following:

o  As of the end of December 2010, the last year of the Doyle Administration, Wisconsin ranked 8th in private job creation.

o  As of December 31, 2011, only nine states had worst job creation percentage-wise over the prior twelve months than Wisconsin. We ranked 41st in private job creation under Governor Walker.

o  As of December 2010, the average weekly wage for Wisconsin's private sector employees was $835, which represented a 3.9% increase over December 2009.  Only 15 states had a higher percentage increase in private weekly wages over the year than did Wisconsin.

o  As of December 2011, the average weekly wage for Wisconsin's private sector employees was $818, an annualized decrease of average private sector wages of $884.   The drop of $17 in weekly wages for the average worker ranked Wisconsin 34th in the nation in term of preserving weekly wages over 2011.

o  Over the course of 2011, here are the new private sector jobs created by Wisconsin and its Midwestern neighbors:

         Michigan     -    105,244    -    3.3% increase

         Minnesota    -      58,681    -    2.7% increase

         Indiana         -      56,557    -    2.4% increase

         Ohio             -      88,226    -    2.1% increase

         Illinois          -      68,982    -    1.4% increase

         Iowa             -      16,633    -    1.4% increase

         Wisconsin    -      27,811    -    1.2% increase.

The other Midwestern states had not publicly released their QCEW data for December 31, 2012, when the Wisconsin DWD jumped the gun and did so just before the recall election in early June.  The DWD did this to bolster the administration's meme that the governor's policies were working to create new private sector jobs.   The administration had to have known that it was going to be free to tout its performance without there being any basis to compare the Wisconsin QCEW data to that of these other neighboring states.  Now we know that Wisconsin in fact ranked dead last of the Midwestern states in job creation as of the end of last year. 

I will end with a note to Governor Walker which, of course, I realize he will never see:

Dear Governor:   You may be right that the QCEW is a more reliable measure for your private job creation promise.  Just tell us the exact data set against which you intend to measure your new private job creation promise.  Don't flop between data sets as you have in the last eighteen months.  Issue a bar graph each month showing us how you are doing on the 250,000 new jobs based on the data set you chose.  Have the courage to take a "forceful" position.  That's what you recently told Governor Romney to do to have a chance at being elected.  You should follow your own advice.  Forcefully tell us the metric you want to use and stick to it. 


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