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
The term “border wars” has taken on a new meaning for many states and cities across the United States that 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
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
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
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
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.
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.
Early investments in children can help overcome the effects of poverty and income inequality that reduce opportunity for many Americans. But too many parents, particularly low-income ones, are forced to choose between their jobs and making the kinds of investments in children that can last a lifetime.
Workplace flexibility and access to paid leave are basic workplace benefits that help keep parents in the workforce while allowing them to be responsive to the needs of their families. But as this op-ed piece in the New York Times points out, few low-income workers have access to those basic workplace benefits. The lack of these benefits undercuts economic mobility, making it harder for the children of today’s low-income workers to achieve their full potential.
Only 15% of the lowest-paid workers have access to paid time off in case of illness, or to care for a sick family member, compared to nearly 8 out of 10 of the highest paid workers. Read more
Wisconsin Unemployment Rate Drops to 5.9%
New employment data for Wisconsin was released today by state and federal officials, and the news is pretty positive, at least at first blush, but a closer examination of the new and updated figures reveals some bad news as well.
One very positive part of the new data is that the state appears to have gained 6,900 jobs in March, including 6,500 in the private sector. These figures are from the Bureau of Labor Statistics’ preliminary, seasonally-adjusted estimates for March. Compared to the BLS survey data from March 2013, Wisconsin has gained 38,400 total (nonfarm) jobs over the past 12 months, including 29,900 in the private sector. (To put that into context, Wisconsin would need to add an average of 62,500 private sector jobs per year to hit the Governor’s pledge of 250,000 new jobs during his first term.)
Although those preliminary March numbers and an encouraging drop in the state’s unemployment rate to 5.9% are noted very prominently in the Department of Workforce Development (DWD) press release, the bad news has to be ferreted out of the tables on pages 2 and 3 of that release. Read more
While Bills Advance in Minnesota and Elsewhere, Four Red States Are Poised for Minimum Wage Referenda
Republican opposition might bottle up the national minimum wage increase being pushed by the President, but the strong public support for a higher minimum wage is forcing action at the state level. Many blue states are approving substantial increases in the minimum hourly wage, and voters are putting increases on the ballot in a number of red states.
Today Minnesota became the latest state to pass a significant minimum wage increase. Within the last 24 hours, both houses approved a bill that would raise the minimum wage in the Gopher State to $8.00 per hour in August, and then in two more steps to $9.50 per hour in 2016. The increased wage would apply to businesses with more than half a million dollars in annual gross sales.
Beginning in 2017, the MN minimum wage would rise automatically with inflation, up to 2.5% a year. Read more