Wisconsin job engine running at half speed

Governor Walker

Governor Scott Walker of Wisconson

Wisconsin will hit Gov. Walker’s first term target of 250,000 added jobs, but it will take two terms to do it.

The goal required 62,500 jobs per year, but the state has been growing at roughly 1% or 30,000 jobs per year. That compares to average growth of about double that across the country.

So the state is lagging, and it is lagging because its two major metro areas are lagging. Over the last 12 months, the four-county Milwaukee metro area actually lost about 1000 jobs, ranking at the bottom for 50 metro areas. And, the metro Madison area only grew by .7%, or 3000 new jobs, despite the presence of a flagship university campus and the home of state government.

The rest of the state is generally doing better.

The slow job growth means that even though the Wisconsin unemployment rate has dipped to 4%, state leaders have more work to do on job creation. They can’t declare victory.

Gov. Walker and his GOP allies have taken big steps to improve the business climate, including a big tax break for the legacy economic bases of manufacturing and agri-business, a right-to-work law and major deregulation. That and the resurgence of the national economy have helped Wisconsin to regain moderate growth.

But what to do next? The best bet might be to bet on the economic regions of the state. They are closer to the action than the experts in the capitol. The last two governors have run tight ships, with most of the shots being called by a tight circle of staffers. Cabinets and top legislative leaders have been supportive. But, with the exception of right-to-work, the major parts of the political agenda have come out the governors’ offices, sometimes as a surprise like Act 10.

In contrast, the eighteen counties in northeastern Wisconsin have organized themselves in NEW North to get all their educational institutions into alignment on workforce training needs. Led by UW – Oshkosh and UW – Green Bay, they have pulled the technical colleges and K-12 districts into a K-20 compact to cooperate with industries to make sure their training is just where the open jobs are.

Reorganizing the University of Wisconsin System, along regional lines would accelerate that positive approach. There is great support on both sides of the aisle to put more resources into training, a rare of bipartisanship, but a Madison-centric system is not the way to go.

There is a head of steam from Speaker Robin Vos and President-elect Donald Trump to increase investments in road upgrading. That could be a stimulus in the short and long term, if their programs don’t escalate government debt at both levels.

A no-brainer for revving up the economy is to get even more serious about high-growth startups. Entrepreneurs generate most net new jobs. Almost all our great employers started in the state. Conclusion: we need more startups.

Thanks in part to a 25% tax credit for investing in high growth ventures, and to a more robust support ecosystem to encourage entrepreneurs, early stage funding has doubled in recent years. Nonetheless, there is still a dearth of capital for launching and expanding startup companies. The foundations in the state could play a much larger role in this space. So could angel investors, though they are already stepping up in greater numbers.

Fixing health care costs could put several thousand dollars in every home in Wisconsin. Private payers are already driving down bloated health care costs. The state could lead the way by doing the same with its 65,000 employees.

This is a partial list of ways to stimulate job creation and increase the state’s prosperity. Our leaders need to look at good-paying jobs as “a public good,” as one former Wisconsin economist put it, meaning it benefits the whole state in many ways, not just the jobholder.

One civic leader reminded us recently that without good jobs, no other social programs in education, health or public safety work well.

The state lacks a comprehensive economic development program. None has been done since the four economic summits of 2000-2003, led by the University of Wisconsin, and the Be Bold task force of 2010, led by major stakeholders in the state.

With the state running at half speed on job creation, and the Republicans in complete control of out statehouse, maybe it’s their turn to come up with one.

This entry was posted in Economic development that works. Bookmark the permalink.
  • Kenmeister

    If restrictions and regulations were eased, maybe it would be easier to expand job growth. Geez.

    KL

    • Jerry

      I’m afraid all the easement of regulations and restrictions is not going to grow jobs . Tax cuts do not grow jobs and this has been proven over and over again. Demand creates jobs. People without discretionary money beyond what they need for the basics of living cannot increase demand because they have no extra money with which to consume. Businesses are not going to expand if you give them a tax cut or decrease their regulations because if there is not an increased demand for their product and the future holds no promise of increasing demand it is simply better let their capital work for them in the financial sector.

  • Jerry

    Under Walker and friends Wisconsin has become a low wage, low opportunity minimal wage mecca. Big box retailers such as Walmart and Menards are now the leading employers. Early in the Walker administration we were told that good paying jobs were available but no one to fill them. The Walker response was to cut funding to tech schools and education K-COLLEGE! The mantra was sent forth with Act 10 that unions were evil and that wages should be held down across all industries and the legislature jumped in with both feet to pass bills countering wage growth in Wisconsin. The private sector quickly noted this and soon workers were left with jobs that no longer offered living wages. When workers see their take home pay fall their consumerism disappears when they are living pay check to pay check and barely keeping their heads above water This is the great experiment in conservative governing that Vos told us would be in play in Wisconsin. We have seen the results; slow economic growth, job creation mostly in low paying jobs, take home pay reduced for a substantial portion of the population via Act 10 and employers refusing to train workers if openings exist rather demanding that the state take this responsibility, while more people leave the state than enter. If any of these supposed “GOOD” paying jobs did exist in Wisconsin under Walker’s regime skilled people would have flocked across the state line to fill them. The bottom line is that Walker and friends sold and stole the U W System down the river and in so doing handcuffed the state’s greatest asset for technology based startups in fields such as green energy and biomed based industries. The Walker administration using its “divide and conquer” mentality has pitted worker against worker and created such a negative economic, educational and environmental climate that industries would need to look long and hard before choosing to locate here. Any entrepreneur is going to take into account the economic and educational climate before committing and most would also want strong environmental policies in place. We are now matching Kansas as a state in which revenues can’t keep pace with needs and people are simply not earning enough to be able to consume in a manner that would foster economic growth. Sad but there appears to be little light shining through the end of the tunnel as a certain political experiment is blocking progress.

    • Mark

      Well said Jerry. I live in Marinette but derive my income in the construction business outside of Marinette, mainly in northeastern Illinois. My children, born and raised in Marinette settled after school, in more progressive cities, Minneapolis and San Diego for a more prosperous living income. I asked my daughter, “what would bring you back to Marinette”? She would love to return to Marinette, but with three young children the prospect of going from a little over 100k (one earner income) to maybe a 60k tops, (possibly two earner income) in Marinette is no option. I don’t blame them.

      You can beat the drum for more qualified workers in the technical fields, but paying them 30k a year with no benefits or ridiculous participating benefits is a joke. People at any economic level seeking a decent job can figure that out. Walkers solution with the backing of his Republican supporters will bite us at some time. Other states are starting to figure it out. Follow Seattle and see how the city council makes sure their constituents are taken into consideration so they have the chance of making a decent living wage.

      I think John’s promotion of start up’s is a great solution for investment. Start up’s depend on their employees more than traditional employers with larger work forces, so ther’s incentive to treat and respect workers. Not just treat them as “animals” to gain more wealth for fewer individuals.

      Thanks again for standing up for the truth Jerry.

      • JohnTorinus

        Startups all need sharp young people and generally pay them well. We Need to set a goal for many more high growth startups — say 200 per year across the state.

  • Dave

    Let’s see. The areas that voted R are doing OK amd the areas that voted D not so good.
    Am I on to something?

  • colin scanes

    Metropolitan areas are the economic engines globally. Madison and Milwaukee should be the economic engines from Wisconsin. With their being successful in this, Wisconsin will continue to have poor growth. Four thoughts why employment in Madison and Milwaukee are not growing:
    1. The State is not investigating in universities (top researchers are leaving and taking their research grants with them). Research expenditures create jobs directly and indirectly at a rate of 30 per million $.
    2. The State and UW System are doing things the way they have in the past (inertia is widespread).
    3. Having recently moved to Des Moines with its high growth, it is easy to see lack of effective leadership in Wisconsin at State, county and city levels.
    4. Political (and perhaps also racial) polarization leads the easy response – “it’s the Dems or Reps fault”. It is much harder to address problems/develop thoughtful solutions.