The State of Working Wisconsin 2015

Monday, September 7, 2015 at 9:00 AM by

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

Categories: Blog, economy, income, jobs, poverty | Comments Off

The “Cheaper to Keep Them” Argument Uses Flawed Assumptions

Monday, July 6, 2015 at 8:03 PM by

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

Categories: 2015-17 biennial budget, Blog, economy | Comments Off

Tax Cuts Haven’t Boosted Wisconsin Economy

Tuesday, June 16, 2015 at 11:39 AM by

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

Categories: Blog, economy, JOBS & THE ECONOMY, STATE TAXES | Comments Off

“Right to Work” Bill Would Suppress Wisconsin’s Already Anemic Wages

Monday, February 23, 2015 at 7:32 PM by

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

Categories: Blog, economy, income, jobs, JOBS & THE ECONOMY | Comments Off

Wisconsin’s Slow Economic Recovery Leaves Many Behind

Thursday, September 18, 2014 at 3:22 PM by

Wisconsin’s gradual economic recovery still hasn’t substantially expanded economic opportunity for working people and families. Median incomes are still well below their pre-recession level, and our state’s elevated poverty levels have yet to begin declining.

Categories: Blog, economy, EITC, poverty | Comments Off

Standard and Poor’s Says Inequality Suppresses Economic Growth and State Revenue

Monday, September 15, 2014 at 6:22 PM by

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

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. 


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

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.

Categories: Blog, economy, jobs, JOBS & THE ECONOMY, STATE TAXES, taxes | Comments Off

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.

Constitutional Convention Could Cripple Federal Capacity to Combat Recession

Sunday, February 2, 2014 at 5:06 PM by

A balanced budget amendment in the U.S. Constitution would result in much longer and deeper recessions and would cause unnecessary job losses. When the economy goes into a dive and people are without jobs, the need for food stamps, health insurance and unemployment insurance rise sharply. Since tax revenue typically falls as the need for those programs rises, a balanced budget would require cuts to these safety net programs and other areas of spending at the worst possible time.

Categories: Blog, economy, FEDERAL BUDGET & TAXES, federal issues | Comments Off