One Year Later: Big Changes to Job Creation

Tuesday, July 10, 2012 at 5:56 PM by

Big Change #4: Spending Cuts Have Slowed Wisconsin’s Economy

When Wisconsin’s two-year budget passed last summer, proponents predicted that the deep spending cuts included in the budget would jump-start Wisconsin’s economy and spur private sector job creation.

That hasn’t happened.

Instead, private sector job growth in Wisconsin has been slow, public sector job loss has dragged down the economy, and Wisconsin has lagged other states in job creation. Wisconsin lost more than 20,000 jobs in the second half of 2011 after the budget passed, according to the Quarter Census of Employment and Wages. (Jobs figures for 2012 from this source are not yet available.) For 2011 overall, Wisconsin ranked 41st in job growth among the states.

The budget likely played some role in causing this slow growth, by inhibiting job growth in both the public and private sectors. How much of a role is hard to know, given that national economic trends also affect job creation in Wisconsin. But the job loss caused by the budget could be significant. The Institute for Wisconsin’s Future estimated that the budget repair bill (Act 10) and Wisconsin’s two-year budget threw 18,000 Wisconsin residents out of work in the private sector alone. When local governments and public employees have less money to spend at local businesses, as they did after the budget passed, those businesses may have a hard time creating jobs.

The budget isn’t to blame for all of Wisconsin’s job creation woes. But the budget’s approach of rolling back investments in Wisconsin’s schools and communities has proven to be an ineffective approach to job creation.

Looking ahead to the next budget, we urge lawmakers to work together and with the public to develop effective, bipartisan strategies that will promote job growth and Wisconsin’s long-term prosperity. We need solutions that are based on solid evidence, such as proven success elsewhere, and measures that are implemented should be transparent and accountable.

A good place to start in improving accountability would be to improve the state’s spotty record on monitoring reports from recipients of grants and loans for economic development. In addition, the state needs to demand results for the money it is spending and should recover state funds from businesses that don’t deliver what they’ve promised.

Tamarine Cornelius and Jon Peacock

One Response to “One Year Later: Big Changes to Job Creation”

  1. Anonymous says:

    How much does the recall efforts and the siege on the Capitol played on this? What business will invest or relocate not knowing which way Wisconsin will lean? I suspect that this next year will compare favorably in growth with other states. 9% increase in new companies this last year!