Poverty Remains Well above Pre-recession Level, and Extreme Disparities Continue
In many respects, the national and Wisconsin data released today by the Census Bureau is much better than I dared hope for, but that doesn’t mean I’ll be popping any champagne corks today. A closer analysis of the data reveals that most Wisconsinites are still making less than they did before the Great Recession, and our state continues to have extreme economic disparities based on race. Read more
The latest annual State of Working Wisconsin report has some positive findings about recent trends for Wisconsin workers; however, it also shines a light on some ongoing challenges, and it concludes that Wisconsinites “all need stronger policy to support broadly shared prosperity.”
COWS (formerly known as the Center on Wisconsin Strategy) issues this report every Labor Day weekend. Because it’s an illuminating report, and Labor Day is an important holiday, I want to share the major findings – while minimizing my own labor this weekend. In that spirit, I am passing along several excerpts from the COWS press release.
On the plus side of the ledger, the report describes the positive effects in Wisconsin of the national economy’s gradual rebound from the Great Recession:
“The state has more jobs than ever before, unemployment rates have fallen to pre-recession levels, and workers that want full-time work are having an easier time finding it.
National attention has turned to Wisconsin because our presidential primary on April 5th is the only one in the next week. It’s also a significant primary because the percentage turnout is likely to be higher than in any other state since the New Hampshire primary.
For reporters and others who are trying to understand some of the demographic, economic and political context for the April 5th election, we’ve pulled together a variety of facts about Wisconsin and how it compares to other states. Here are a few highlights from that data: Read more
A new report issued in conjunction with the Labor Day weekend by COWS provides a thorough examination of Wisconsin job numbers, wages, poverty, and job quality, and it provides a sobering assessment of how working people in Wisconsin are doing:
“Wisconsin faces slow growth, extreme racial disparity in unemployment, long-term stagnation in wages, and one-fourth of workers struggling in poverty-wage jobs.”
The new COWS report – The State of Working Wisconsin 2015 – illustrates that as the national economy has gradually rebounded following the Great Recession, Wisconsin’s job growth has lagged behind. COWS’ analysis concludes that “if Wisconsin had enjoyed the same rate of job growth as the rest of the nation across the course of the recovery, the state would have 90,000 more jobs today.” The national growth rate from January 2011 through June of this year was 60% faster than the job growth Wisconsin experienced during that time.. Read more
The Governor’s Math Uses the Wrong Numbers and Wrong Question
As the legislature nears a vote this week on using taxpayer dollars to help build a new Bucks arena, the Governor’s primary argument for subsidizing the Bucks continues to be the contention that it’s “cheaper to keep them.” That isn’t exactly an uplifting slogan, but it seems to be the strongest argument the Governor can muster. With that in mind, let’s review the arguments about the cost-effectiveness of public subsidies for the proposed arena.
There have been a number of excellent columns, blog posts and other commentaries about the arena issue. Among those, my favorite is a critique of the “cheaper to keep them” argument by Republican Representative Dean Knudson.
In a guest column he wrote in mid-June, Knudson skewers each of the three major points that the Governor and others have made to support the argument that the proposed public subsidies will be less expensive than the costs to be incurred if the Bucks leave Milwaukee: Read more
Wisconsin lawmakers on the legislature’s budget committee will probably meet this week to make decisions about a proposed income tax cut for high earners and other changes to Wisconsin’s tax system, among other issues. They should keep in mind that new evidence shows that no state that passed large income tax cuts in recent years has seen its economy grow faster than the national average. Read more
Though researchers disagree on the effects of “right to work” legislation on the number of jobs, what is quite clear is that such laws suppress wages. Now that legislative leaders have suddenly put a so-called “right to work” (RTW) bill on a very fast track, I hope legislators will take a careful look at a couple of recent studies that examine the economic effects and warn against following the path of the states that have approved RTW laws.
A recent report by Dr. Abdur Chowdhury, who teaches economics at Marquette, reached the following conclusion about the effects on Wisconsin income and state taxes:
“The potential net loss in direct income to Wisconsin workers and their families due to a RTW legislation is between $3.89 and $4.82 billion annually. Using a conservative estimate of an impact multiplier of 1.5, the total direct and induced loss of a RTW legislation is estimated between $5.84 and $7.23 billion annually. Read more
Concerns about increases in income inequality were voiced from a surprising perspective today, when Standard and Poor’s (the bond rating agency) issued a lengthy report titled “Income Inequality Weighs On State Tax Revenues.” The report concludes that “disparity is contributing to weaker tax revenue growth by weakening the rate of overall economic expansion.”
The authors offer this explanation for the correlation between income disparities and economic growth:
“…rising income inequality is a macroeconomic factor that acts as a drag on growth. There is evidence, although not conclusive at this point, that the higher savings rates of those with high incomes causes aggregate consumer spending to suffer. And since one person’s spending is another person’s income, the result is slower overall personal income growth despite continued strong income gains at the top.”
An article in today’s Washington Post sums up the findings in clearer terms:
“Even as income has accelerated for the affluent, it has barely kept pace with inflation for most other people. Read more
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.
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.
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