Wednesday, September 5, 2012

Wisconsin in 47th Place in Economic Development since Walker Inauguration

 Governor Walker at the Republican National Convention in Tampa, Florida last Tuesday Night.

Governor Walker had a key prime-time role speaking last Tuesday night at the GOP national convention. The Huffington Post reported that he received a one-minute standing ovation when he walked into the Tampa Bay Times Forum.  This was predictable, given that he took on the public sector unions that Republicans love to hate and not only neutered them in our state, but survived the recall election spawned by his anti-union efforts.  He is well deserving of his celebrity status in the national GOP party, and especially with its Tea Party component, for these two reasons alone.   Here are two sections of his speech:
On June 5th, voters in Wisconsin were asked to choose between going backwards to the days of double-digit tax increases, billion dollar budget deficits and record job losses or moving forward with reforms that lowered the tax burden, balanced the budget and helped small businesses create more jobs.
Like many places across the country, Wisconsin lost more than 100,000 jobs from 2008 to 2010. Unemployment during that time topped out at over 9%. But because of our reforms, Wisconsin has added thousands of new jobs and our unemployment rate is down from when I first took office.
What is more questionable is whether the governor's rock star status is deserved among the citizens back home in Dairyland.  I have previously posted about the lack of any evidence or data supporting a conclusion that Governor Walker's reforms have spurred economic growth in our state.  The Bureau of Labor Statistics' Standards'  monthly Current Employment Statistics ("CES") data for July 31, 2012 was released in the middle of August by DWD, and it shows that Wisconsin has lost 17,800 private sector jobs since the governor assumed office.

While the Governor and his Labor Secretaries (three since January 2011) started out hyping his administration's job creation based on the CES data, once those numbers started trending poorly, the Walker Administration quickly shifted to impugning them.

In a recent press release, the Governor clearly seems to have finally settled on the BLS's Quarterly Census of Employment and Wages (QCEW) reports as the new gold standard for assessing his performance in meeting the promise he made to create 250,000 new private sector jobs in his first four-year term.  But here is what a careful mining of the current QCEW data shows:
o  In the last full year of the Doyle Administration, ending December 31, 2010, Wisconsin ranked 8th in the nation in private job creation, an excellent ranking.

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 during Governor Walker's first year in office.

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 Philadelphia Fed released its Coincident Index for July 2012 on August 21.  I have previously posted on the purpose and data of the Philly Fed's Coincident Index here and here.  Since January, 2011, the month of Governor Walker's inauguration, here are the five worst performing states in terms of economic growth as measured by the Philadelphia Fed Bank's Coincident Index.

What the coincident index data means is that over the 19 months since the Walker inauguration, Wisconsin's economy has grown by one-third of one percent, at the same time that the U.S. coincident index has risen by 4%, or twelve times faster. Here is how Wisconsin matches up in terms of economic growth with our sister states in the Midwest over the same nineteen-month time frame:

This isn't a red state versus blue state deal.  Ohio and Indiana are states with GOP governors and legislatures.  Ohio's economy has grown at a rate over twenty times our rate of growth since Governor Walker entered office.  Indiana has grown at a rate fifteen times our rate.  Illinois has had a rate of growth of its economy eight times ours. Economic growth in Wisconsin has been stuck in neutral since January 1, 2011.  That is a story that wasn't addressed by anyone last week in Tampa. 


  1. Well, I tried linking to this post in the comments on Paul Krugman's blog, I see there hasn't exactly been a ton of commenters! Hopefully you got a traffic uptick though, folks need to see this kind of objective evidence.

    1. Lupus, I did get a pretty amazing uptick on Friday. Thanks for linking to me. Drives home the reality that there are whales (Krugman) and plankton (Grimmer) in the blogosphere ocean.