Minnesota releases updated revenue and spending projections in early December of each year, and the new figures released today are very positive – a net gain in the Minnesota budget balance of about $1 billion. Let’s hope that Wisconsin can come close to matching that when our new tax and spending estimates are released in late January or February.
As we noted in a blog post about two weeks ago, many people across the country are watching Minnesota and Wisconsin carefully because of the very different directions that the two states have gone in fiscal and health care policy over the last couple of years. Because of the many demographic similarities between the two states, the divergent choices by policymakers set up an interesting experiment. In that context, today’s budget news from our neighbor to the west could be an early point in their favor, but we won’t have any basis of comparison in Wisconsin for another month or two. Read more
November was Native American Heritage Month, but for most of the month all we have heard about was the mascot issue and casinos. The national stories about the “code-talkers” during World War II were a welcome exception to the dearth of positive stories about American Indians during the first half of the month, though those stories drew attention to just a very brief glimpse of Indian history and contributions.
In addition to wishing that the media would shed more light on Native Americans’ contributions to American history and culture, I would like to hear more about the economic challenges facing American Indians, particularly those living in “Indian country.” The following graphic, prepared by my colleague Tamarine Cornelius, shows that the unemployment rate for Native Americans in Wisconsin is almost twice the rate for non-Hispanic whites, and the poverty rate is more than two and a half times as high for Native Americans (25.3% vs. Read more
Yesterday’s competition between the Green Bay Packers and the Minnesota Vikings ended in a rare tie game. That game is finished, but there is another competition that is still going on between Wisconsin and Minnesota, one that involves job creation and economic growth, rather than touchdowns and field goals.
Wisconsin and Minnesota are similar states in many ways, but we are taking very different approaches to growing our state economies. Policymakers in Wisconsin have focused on cutting taxes, especially for corporations and the wealthiest, sharply reducing state spending on K-12 education and the university system, and limiting tax credits and other services that give a boost to struggling families. In contrast, policymakers in Minnesota have targeted the state’s highest earners for an increase in income taxes, kept education spending on an even keel during the recession, and expanded Medicaid.
The different approaches to economic development amount to a type of experiment, one that policymakers from other states will be watching with a close eye. Read more
Next year is the 50th anniversary of the “war on poverty,” and we can expect a lot of debate and posturing then about that ambitious undertaking. Expect some legislators to use the opportunity to urge that policymakers renew their commitment to fight poverty and reinvigorate some of the elements of that agenda, while others will take that opportunity to declare the war on poverty a failure and a mistake.
Rep. Paul Ryan is preparing to play a role in next year’s debate by offering his own views about a very different type of war on poverty, which may also be a war on the current spectrum of anti-poverty programs. An article in the Washington Post this morning reports on his endeavor:
“Paul Ryan is ready to move beyond last year’s failed presidential campaign and the budget committee chairmanship that has defined him to embark on an ambitious new project: Steering Republicans away from the angry, nativist inclinations of the tea party movement and toward the more inclusive vision of his mentor, the late Jack Kemp. Read more
The State of Working Wisconsin: Update 2013
A Labor Day tradition is that the Center on Wisconsin Strategy (COWS) either rewrites or updates their comprehensive biennial report called the State of Working Wisconsin, which provides a thorough examination of Wisconsin job numbers, wages, poverty, and job quality. This year COWS released a five-page update that you can find here.
The short report explains that the gradual rebound in jobs following the Great Recession has been much slower than previous recoveries, and Wisconsin’s job growth is well behind the weak national recovery. COWS’ analysis found that “Wisconsin would have 33,000 more jobs today if we’d only kept on pace with the national recovery” (which would add one-third more to the increase of 99,000 jobs since the Wisconsin economy began to recover in Feb. 2010). They note that although employment growth began to accelerate in the rest of the Midwest in 2012, Wisconsin’s recovery “seems stuck in a lower gear.”
The COWS report examines job trends in Wisconsin by sector to determine where the “missing jobs” are. Read more
“Moderate” Growth Anticipated by DOR Would Yield 137,000 Jobs During Walker’s Four-year Term
Wisconsin can expect “moderate” economic growth over the next several years, according to an “Economic Outlook” report issued today by the Department of Revenue (DOR). The new report, which includes estimates for a wide range of economic indicators until 2016, projects that Wisconsin will gain about 137,000 private sector jobs during the four years after Scott Walker was elected Governor (which would be about 55% of the 250,000 jobs that the Governor promised). That represents a projected increase of 5.9% over four years, compared to an expected 6.8% increase in employment at the national level.
Some of the other noteworthy findings or projections include the following:
- Personal income growth in Wisconsin is expected to slow to 1.9% for 2013, before accelerating to 4.6% in 2014 and 4.4% in each of the following two years (not adjusted for inflation).
Grover Norquist Neglects the Facts in Exhorting North Carolina to Follow Wisconsin Path
In a recent article, political commentator and conservative strategist Grover Norquist urged North Carolina lawmakers to make their state the “new Wisconsin.” He uses or misuses one piece of economic data to suggest that Wisconsin’s economy is thriving, while ignoring ample evidence that indicates otherwise. That argument shows the same sort of inattentiveness to or disregard of economic facts that led many conservatives to advocate that the U.S. should emulate the fiscal austerity policies being practiced in the European Union.
The one piece of economic evidence cited by Norquist and the article’s coauthor, Patrick Gleason, is that over the past two years, since Governor Walker signed the last biennial budget bill, “the state’s unemployment rate has dropped from 7.6 percent to 7 percent — below the national average.” It’s true that Wisconsin’s unemployment rate is below average – but that’s nothing new and can’t be traced back to a particular policy agenda. Read more
Wisconsin’s Ranking for Future Economic Growth Jumps, But Predicted Growth Still Lags the National Average
Wisconsin’s ranking jumped up several spots on an index designed to predict states’ future economic growth. However, that index predicted Wisconsin’s growth would still lag the national average.
Every month, the Federal Reserve Bank of Philadelphia issues a report that relies on several economic indicators to give a picture of how each state’s economy is likely to fare in the next several months. Wisconsin has been faring relatively poorly in this index, which is constructed using employment and wage figures, the unemployment rate, construction levels, and other indicators. As this Milwaukee Journal Sentinel article noted about this index, “From March 2012 through this past April, Wisconsin has been stuck in the bottom half of the states, and usually has ranked 37th or lower.”
In the most recent report, Wisconsin’s economic outlook ranking jumped to 20th among the states. Wisconsin’s ranking garnered some attention – including this press release from the Governor – because our ranking was much improved over the previous month, when Wisconsin ranked 40th for predicted economic growth. Read more
A careful analysis of the four most prominent “business climate” ratings of state tax systems finds them to be “deeply flawed and of no value to informing state policy.” A report published today by Good Jobs First (“Grading Places: What Do the Business Climate Rankings Really Tell Us?”) concludes that business climate studies are actually “politicized grab-bags of data” that contradict each other wildly.
The “Grading Places” report is authored by Dr. Peter Fisher, an economist who has written extensively on economic development. According to Dr. Fisher:
“When we scrutinized the business climate methodologies, we found profound and elementary errors. We found effects presented as causes. We found factors that have no empirically proven relationship to economic growth. And we found scores that ignore major differences among state tax systems.”
You can find the complete report and the executive summary here.
Jon Peacock Read more
Like many other governors, Scott Walker is frequently talking up the state economy and trying to take credit for any recent bit of positive economic news. That’s perfectly understandable. It’s also becoming increasingly difficult.