Tax Cuts Aren’t Delivering Job Growth, in Wisconsin or Elsewhere

Thursday, July 17, 2014 at 9:27 AM by

Wisconsin isn’t the only state that has made deep tax cuts on the premise of boosting the economy, only to find out that the promised job growth has not materialized. Kansas and North Carolina also passed large tax cuts and have experienced disappointing job growth. As a result of the tax cuts, these states have fewer resources to support investments in public schools, higher education, and a healthy workforce – investments that have a proven track record for creating jobs.

In Wisconsin, lawmakers have passed a series of tax cuts that total nearly $2 billion over four years. Governor Walker and some legislators have said that these tax cuts will make Wisconsin a more attractive place to do business, but job growth in Wisconsin since the tax cuts took effect has been slower than the national average. Unlike the U.S., Wisconsin has not yet gained enough jobs to replace the ones wiped out by the recession. Read more

Border Wars in Job Piracy: Will Wisconsin Take the Opportunity to Cease Fire?

Monday, July 14, 2014 at 3:47 PM by

The term “border wars” has taken on a new meaning for many states and cities across the United States thatpc5dpEMcB have been engaged in the practice of job piracy.  However, a number of areas in the country are shifting away from this practice of luring jobs over state borders after recognizing that it is inefficient and does little to fuel job growth. Wisconsin policymakers should learn from the experiences in those states and localities and from the remedial actions they are taking.

On July 9th Good Jobs First released a new report exploring the issue of job piracy, also called job poaching, which wastefully exhausts economic development subsidies without incentivizing new job creation.  The report, “Ending Job Piracy, Building Regional Prosperity,” provides examples of failing models of job piracy, including the border war that has been raging between Missouri and Kansas. 

Missouri legislators have gradually come to the realization that job piracy is a zero sum game that is wastefully exhausting the economic development resources of both states.   Read more

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Job Growth in Wisconsin Still Slow, Despite Numerous Tax Breaks

Thursday, June 19, 2014 at 12:14 PM by

Wisconsin continues to perform poorly in private sector job growth, according to new employment figures released today.

The number of private sector jobs in Wisconsin grew by 1.2% in 2013, compared to 2.1% nationally. The new jobs figures come from the Quarter Census of Employment and Wages, which this Milwaukee Journal Sentinel article calls “the most credible and comprehensive” figures available.

Wisconsin job growth has been slower than that in neighboring states, according to the Journal Sentinel:

“In the first three years of Walker’s term, the data show that Wisconsin ranked 35th of 50 states in the rate of private-sector job growth. That puts it behind the nearby states of Michigan (sixth of 50), which is bouncing back from a searing downturn in the auto industry; Indiana (15); Minnesota (20); Ohio (25); Iowa (28), and Illinois (33).”

State lawmakers have passed dozens of tax cuts since 2011, but that hasn’t spurred job growth. Read more

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GDP Numbers Confirm Wisconsin’s Lagging Growth

Monday, June 16, 2014 at 7:18 PM by

Wisconsin’s economic growth has lagged behind that of most other states, according to the Bureau of Economic Analysis. The new report issued last week provides inflation-adjusted statistics on gross domestic product (GDP) in every state for each of the years from 2010 through 2013.

The following graph illustrates that Wisconsin’s GDP growth of 4.5% over the last three years has been well below the national average of 6.1%.  Wisconsin has also lagged behind the other states in upper Midwest, except for Illinois. 

GDP-growth2

The second bar graph compares the annual growth since 2010 in Minnesota, Wisconsin, and for the U.S. as a whole.  Some conservatives have argued that Wisconsin’s economy would grow more rapidly because our state has been cutting taxes and practicing austerity during a period when Minnesota raised taxes. The graph illustrates that Minnesota’s growth has been stronger for each of the last three years.GDP-growth4

If  Wisconsin’s economy had grown at the same rate as the national average over the three years since 2010, our state GDP would have been about $4 billion higher at the end of 2013.   Read more

Still Waiting: Unlike U.S., Wisconsin Has not Returned to Pre-recession Job Levels

Thursday, June 12, 2014 at 11:06 AM by

Still-waitingFinally.

After more than six years from the start of the Great Recession, the U.S. at long last has more jobs than it did before the recession. For Wisconsin though, that achievement is likely to be a few months in the future.

As of April 2014, there are still 27,700 fewer jobs in Wisconsin than there were in January 2008, according to the Bureau of Labor Statistics. At the current rate of job growth, it means that Wisconsin won’t achieve pre-recession job levels until sometime this fall.

Once Wisconsin returns to pre-recession employment levels, additional jobs will need to be added to make up for the population growth that occurred during the recession. Wisconsin still needs to add more than 100,000 additional jobs just to keep up with growth in the working age population, according to the Center on Wisconsin Strategy.

Employment in Wisconsin may be nearing pre-recession levels, but the type of jobs has changed. Read more

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Minimum Wage Measures Advance in Neighboring States

Thursday, May 29, 2014 at 3:28 PM by

A Few Cracks Begin to Show in GOP Opposition

In late April, shortly before a scheduled U.S. Senate vote on the matter, former Minnesota Gov. Tim Pawlenty (R) said Republicans should support increasing the minimum wage. Mitt Romney and former Pennsylvania GOP Sen. Rick Santorum have made similar comments – which seem to reflect a growing unease among some Republicans in opposing such a politically popular policy choice.

Republicans in Michigan may have been influenced by that sort of advice this week, when the GOP-controlled legislature approved a bill raising that state’s minimum wage to $9.25 per hour by 2018 (from the current level of $7.40). Once it reaches $9.25, the minimum will generally be adjusted annually for inflation, provided the unemployment rate is below 8.5%.

Political pragmatism seems to have played a significant role in the passage of the Michigan bill, which their GOP governor quickly signed, because its enactment is expected to weaken support for a November ballot initiative that would raise their minimum wage even more — to $10.10 an hour, with adjustments every year for inflation, and with a significant improvement to the lower minimum wage for tipped employees.   Read more

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The True Cost of Cheap Eats: Fast Food Workers in Wisconsin Strike

Thursday, May 15, 2014 at 2:55 PM by

Fast food workers in Wisconsin are part of a national strike to rally for higher wages. Strikes took place in Milwaukee, Madison, Wausau, and other Wisconsin cities. Workers are advocating for a wage floor of $15 an hour.

Downgrade of Kansas Bond Rating Offers another Warning to Wisconsin

Wednesday, May 7, 2014 at 1:07 PM by

A bond rating agency has downgraded its rating of Kansas’ creditworthiness, citing revenue reductions from tax cuts and slow economic growth, among other factors. There is no indication that a downgrade for Wisconsin is in the works, but the downgrade of Kansas’ creditworthiness should give pause to Wisconsin lawmakers. Tax cuts haven’t done much to create jobs, in either Kansas or Wisconsin, and have led to unintended negative consequences.

Tax Breaks Abound in Wisconsin, but Job Growth Remains Slow

Friday, May 2, 2014 at 1:05 PM by

Wisconsin lawmakers have cut taxes 43 times since 2011, reducing revenue by $1.9 billion over that period and limiting investments in Wisconsin’s schools, workforce, and transportation networks. Despite – or because of – the substantial tax cuts, private sector job growth in Wisconsin has been slower than the national average.