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
Compensation of CEOs at major U.S. firms continues to skyrocket, according to a new report by the Economic Policy Institute. To some extent that trend can probably be attributed to broad economic forces, but policy choices at the national and state level also contribute to the huge disparities in income and wealth.
The EPI report was interesting reading today – against the backdrop of Assembly GOP leaders announcing a plan for substantially reducing the prevailing wage law for public sector projects and releasing the details of a Bucks arena plan that will be a boon to the team’s very wealthy owners and players. Those two issue areas are great illustrations of how public policy decisions can exacerbate the widening income gap. And once the budget process resumes, we will learn whether legislative leaders plan to compound the problem by proceeding with a proposal to reduce taxes on very high income Wisconsinites by reducing or eliminating the alternative minimum tax – even as the budget makes cuts that will hurt low-income state residents. 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
State and local policymakers in many parts of the country are coming to the conclusion that too many workers get paid too little, and they are pushing for higher wage standards for workers. Yet in Wisconsin, lawmakers are moving in the opposite direction.
A Gallup poll conducted last week found strong public support for boosting the minimum wage (now $7.25/hr.) to $9.00 per hour. That change was supported by 76% of Americans, with only 22% opposed. Here are a few of the other highlights from the national survey of 1,040 adults:
- The support was solid across the political spectrum – with the backing of 58% of Republicans, 76% of Independents, and 91 % of Democrats.
- Support wasn’t quite as strong for indexing the minimum wage for inflation (after raising it to $9), yet that was endorsed by 68% of adults and opposed by 29%.
- Public support for an increase to $9.00 was up 5 percentage points since early March, when 71% were in favor and 27% against the proposal.
The national poll was conducted by Gallup last week at about the same time that 61% of New Jersey voters supported an amendment to that state’s constitution to raise the minimum wage $1 to $8.25 and index it for inflation (even as they reelected Governor Christie, who had opposed that measure). Read more
A new resource posted online today helps illustrate Wisconsin’s stagnant earnings for workers in general and a decline for lower wage workers. Governing.com posted an interactive database showing state-by-state figures for average and median real wages for each year from 2002 through 2012.
The user-friendly database graphically displays the trend lines in each state, including not only the wages for people at the 50th percentile (i.e., the median wages), but also the trends for people in the middle of the top half (the 75th percentile) and for the middle of the bottom half of earners (the 25th percentile). All of the figures are converted to 2012 dollars to adjust for inflation.
The national data show that mean wages have essentially been unchanged (+0.1%) over the last 5 years (2007 to 2012), when they are adjusted for inflation. Because much of the wage growth has been at the upper end, the trends are worse when one examines median wages, rather than the mean. Read more
A minimum wage bill, SB 4, was introduced in the Wisconsin Senate on January 31 by Senator Wirch and Rep. Mason. A total of 34 legislators have signed onto the bill. Unfortunately, none of the cosponsors are Republicans.
The minimum wage in Wisconsin has been $7.25 per hour for most workers since July 2009. Senate Bill 4 would increase it to $7.60 (except for minors and currently exempt categories of workers), and beginning in September 2014 would require the Dept. of Workforce Development to make annual adjustments for inflation. It would also allow local governments in Wisconsin to set higher minimum wages.
The minimum wage has already increased in about a dozen states this year, including 10 states where it rises annually with inflation. As an article in the USA Today reported, a total of 23 states have either increased it already this year or are considering bills or ballot measures to increases their minimum wage. Read more
A number of states have automatic minimum wage increases, thanks to formulas that automatically adjust it for inflation.
However, Wisconsin is not one of the 12 states where the minimum wage is increasing this year (automatically in 10 of those states), nor is it one of the 19 states that exceed the federal minimum. Our floor on wages remains right where it has been ($7.25 per hour) since the last federal increase took effect in July 2009.
New Data Show Many Wisconsinites Haven’t Benefited Yet from the Slow Economic Recovery
Two years into the nation’s slow recovery from the Great Recession, Wisconsin’s working families are finally beginning to experience some signs of an improving economy. But the new Census Bureau figures released today (from the American Community Survey) reveal that the gradual economic gains have not been evenly distributed and have yet to benefit many of Wisconsin’s most vulnerable households. For example:
- Median household income was $50,395 last year, almost 8% below the 2007 level ($54,737).
- Median income for Black households in the state was just $24,399 in 2011, less than half the $52,444 earned by White households.
- Wisconsin’s child poverty rate was 18.2% in 2011, which represents an improvement from 19.1% in 2010, yet that difference was not statistically significant, and the rate remains far above the 13.4% level in 2008.
- The Black child poverty rate (49% in 2011) was nearly four times the rate for White children in Wisconsin.
DWD Reports 6.7 Percent Wage Growth, Compared to First Quarter of 2011
There was a bit of good economic news in our state Friday. The Department of Workforce Development (DWD) issued a press release noting that, “Wisconsin wage earners received record 1st quarter wages of $27.6 billion, up 6.7 percent or $1.75 billion from the first quarter in 2011.” The new figures come from the state’s very comprehensive Unemployment Insurance system database.
I think the recent Wisconsin wage growth is cause for a little celebration, but before you pop the cork on the good champagne I’d urge you to consider a couple of factors. First, keep in mind that Wisconsin’s job and wage numbers have been so depressed for the past few years that a bit of progress in regaining lost ground (compared to the U.S. average) is a big jump from where we’ve been. That seems to help explain the new wage numbers. Read more