Bruce Murphy
Back in the News

Walker Approach To Jobs Growth Failing?

National story for Reuters contrasts Wisconsin's Douglas County with next door Minnesota county, which is doing much better.

By - Jun 8th, 2015 11:21 am
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Gov. Scott Walker. Photo from the State of Wisconsin.

Gov. Scott Walker. Photo from the State of Wisconsin.

The fact that Wisconsin is gaining jobs at a slower pace than the nation is by now well-documented. As a story last week by Reuters noted, “Private-sector employment grew by 6.4 percent in Wisconsin between January 2011 and March 2015, lagging the national pace of 10.7 percent, according to the U.S. Bureau of Labor Statistics.”

But Reuters reporter Andy Sullivan decided to go beyond the statistics and take an up-close look at just one part of the state, the city of Superior, in Douglas County, at the Northwest edge of the state, right across the border from its twin city of Duluth, Minnesota. The good news: “Walker has cut state taxes by $2 billion as his state has climbed out of recession. Unemployment in Superior now stands at 4.6 percent, down nearly by half since Walker took office. New businesses are opening downtown and the waterfront docks are humming.”

The bad news: “Ask local officials and business leaders, and they will say Walker’s policies have little to do with a turnaround that has moved in tandem with the national recovery,” Sullivan reports. “Tax cuts haven’t lured many businesses across the bridge from Duluth, Minnesota, they say, while the loss in revenue has prompted steep spending cuts to education, harbor maintenance and road construction…’We should put the $2 billion in roads or education,” said Superior Mayor Bruce Hagen, a self-described conservative.’”

Sullivan continues: “Walker has made no secret of his desire to lure businesses across the border from Minnesota, where Democratic Governor Mark Dayton has hiked taxes. Superior should be poised to benefit: the city of 27,000 has access to the same freeways and port facilities as Duluth, without the steep hills that make construction more expensive on the Minnesota side.

“The tax difference between the two cities is dramatic. Manufacturers will see their corporate tax rate drop to 0.4 percent in Wisconsin in coming years, compared to 9.8 percent in Minnesota. Wisconsin firms also pay less in unemployment insurance, workers’ compensation and sales tax, according to a comparison circulated by Walker’s economic-development agency.

“Yet Superior isn’t pulling ahead, according to U.S. Labor Department figures. Private sector-employment in Superior grew by 5.6 percent in Superior’s Douglas County between January 2011 and September 2014, the last month for which reliable figures are available. In Duluth’s St. Louis County, jobs grew by 9.8 percent during that period… Meanwhile, the number of businesses in Douglas County declined by 6 percent – double the rate in St. Louis County… There are plenty of vacant storefronts along Superior’s main street, where one bar advertises “BINGO EROTIC,” and space is also available in weedy plots near the waterfront…”

Dayton was first elected governor in 2010, the same time as Walker and has pursued the opposite course, as I’ve written: “While Walker lowered income taxes, delivering 60 percent of the tax cut to those making more than $100,000 a year, Dayton and the Minnesota legislature raised taxes by $2.1 billion,” targeting the top 1 percent of earners to pay 62 percent of the new taxes, almost the exact reverse of what Walker did.

Dayton invested 71 percent of the new revenue in funding for K-12 schools and higher education as well as all-day kindergarten and pre-school education. Walker’s budget included the seventh-sharpest decline in education funding in the nation. And Walker’s approach has left the state trailing Minnesota badly in job growth.

In fact, as Urban Milwaukee’s Data Wonk columnist Bruce Thompson has found, there is little evidence that the recommended conservative approach of cutting state taxes and spending promotes job growth. The comparison between Wisconsin and Minnesota is but one example of how the facts on the ground undercut the theories of Walker and conservative think tanks like the Wisconsin Policy Research Institute and the Cato Institute. Yet Republican presidential aspirant Walker will continue to tout this as the way he helped Wisconsin reduce its unemployment rate, while downplaying the fact that other states, including Minnesota, have done far better at promoting job growth.

In a related story, an analysis by the Wisconsin Center for Investigative Journalism found that the state’s jobs agency, the Wisconsin Economic Development Agency, is spending little money in northern counties like Douglas County and has generated very few jobs.

11 thoughts on “Back in the News: Walker Approach To Jobs Growth Failing?”

  1. PMD says:

    Makes some of the same points at this piece from November 2013.

    http://www.nytimes.com/2013/11/24/opinion/sunday/right-vs-left-in-the-midwest.html?_r=0

  2. Jake formerly of the LP says:

    It’s never been about adding jobs in the Age of Firzwalkerstan. It’s been about redistributing power and wealth to the rich, corporate and connected, and away from the vast majority of us. If you thought this tinkle-down BS was going to lead the masses to prosperity, you are a SUCKER

    Understand this, and the Walker strategy makes more sense. Any positive economic outcome is purely coincidental (and a result of the Obama Recovery, in this case.)

  3. JW says:

    The question mark in the headline of this article is not required.

  4. Will says:

    Cut taxes, shrink the gov’t machine (synonymous with unions). Got my vote. Walker ’16

  5. Labitikov says:

    Will,

    Private sector unions have around 6.6% of the workforce, public sector unions around 36%. Over half the states in the US don’t allow a “union shop.” We have the weakest labor law in the industrialized world even though we have the largest economy.

    At what time does your scapegoating of labor end? 0%?

    Have you heard of freedom of association?

    Have you noticed that your program of debt financed tax cuts to the wealthy does not work nationally, in the states?

    Lincoln had some words about labor.

    Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if Labor had not first existed. Labor is superior to capital, and deserves much the higher consideration.—Abraham Lincoln

  6. John G. says:

    I’ve noticed that some of the usual suspects avoid posting on these articles..

  7. Tony Muhammad says:

    Gov Walker Administration continues to wizard Wisconsin workforce true unemployment data. Of course most realize unemployment data can be deceptively / correctly presented to favor either political party intentions.

    I thought I would give it a try comparing WI civilian labor force data at http://www.bls.gov/eag/eag.wi.htm#eag_wi.f.1, with 2010 national census data collected about our state of WI.

    Obviously Walker uses the same data complied by the Bureau of Labor Statistics which rates WI unemployment rate at 4.4.

    I used WI workforce working age population between 15 to 64 estimated from the 2010 Census. A total 3,533,000. Subtract by the April 2015 employment figure of 2,959,200 which (=) reveals 587,024 WI civilians unemployed in April 2015.

    My figures reveal a 6% unemployment rate compared to the reported 4.4 by the Walker Administration by way of the Bureau of Labor Statistics.

    But who am I, to challenge the Federal Bureau of Labor Statistics math utilization and manipulating basic math formulas to report employment and unemployment figures.

    My figures might better serve WDP, but I guess they are not willing to rock the National boat of under reporting American citizens truly unemployed like the WRP or GOP

    Data collection compiling numbers and figures to tell a story or perspective have sidebar notations (*). Informing researchers that figures / number totals are seasonally adjusted. Or I like to say, use these numbers at your own discretion.

    What’s my point…

    You might say Walker wizard job creation numbers is acceptable because both political parties depend on a bag of tricks handed out at Federal Bureau of Labor Statistics.

    I do remember Repub Mitt Romney was laugh at during his 2012 presidential campaign reporting actual national unemployment rate of 19% compared to both parties supporting the rate of 8.3%. Mitt figures came from the same data collection of other presidential hopefuls but Mitt chose to tell the other story everyone else was denying.

  8. PMD says:

    Whatever the state unemployment rate, that isn’t the only measure when it comes to the health of a state’s economy right? For starters, private sector job growth has been weak and below the national average and the state was recently ranked dead last for startups.

  9. jake says:

    All that Walker supports care about is punishment of liberals, minorities, women, gays, etc…those easily manipulated tools like Will could care less about results. They only care about masturbating to ideological warfare against anything left of their right.

  10. David says:

    PMD…. in addition the state dead last in new start ups.

  11. Andy Umbo says:

    I had to leave Wisconsin to get hired because I’m over 55…there’s something about Wisconsin, the place in general seems more “abusive” to older workers than a lot of other places I’ve lived. I haven’t figured out what it is, but I always felt, or let’s say I was made to feel by people I was interviewing with, that if I didn’t stay in the same job for 35 years, hence be able to early retire at 55 or so, then I was an obvious idiot or something. Amazing that a lot of other areas of the country are trying to hire back older workers now…

    I was no fan of Walker’s, wouldn’t vote for him, but I’ll say in cities like Milwaukee, the “brain drain” started way back in the 70’s. Whatever was going on to key the best and the brightest to move out, was starting back then. And it’s basically accelerated since then. 65% of my college graduation class in the 70’s, left within 18 months of graduation because there weren’t avenues of employment. Interestingly enough, even the biggest dunderhead in the class did better for himself on the coast than some of the best and brightest that stayed in Milwaukee! A warning stat if I ever saw one! Milwaukee did not have full employment for the baby-boom generation either!

    Be careful about what you wish for, tho, I’m living in Indianapolis now (and planning to leave as soon as I can), and it’s republican business friendly environment is a disaster for the average worker. They have a lot of businesses moving here because of the low business taxes and government welfare for corporations, but it’s all the ware-housing or bottom level components of those businesses. Their intellectual assets still remain on the coasts! They pay people 8 dollars an hour, an unlivable income. Making a business friendly environment from a tax stand-point doesn’t mean companies are going to abandon their home towns to your city, it means they’re going to move the work they don’t care about to your town rather than abuse their own. There are tons of bad problems in Indianapolis with burglary, lack of policing, lack of fire department value, no consumer protection laws that make it hard to stabilize your rent with a minimal paying job; all able to be placed on the republican altar of low taxes, too much to really get into here.

    The question Wisconsinites should be asking themselves is, if it’s such a great state, and in many ways it is, from culture to just the look of the cities (let me tell you, many parts of Indianapolis looks like West Virginia coal shacks), then what’s keeping jobs from happening? Is it really just corporate taxes and tax breaks? Because it seems like many corporations in Wisconsin get so many deals from the gov., that they’re not paying all that much anyway (and I believe the tax burden flipped from majority business to majority citizen during the Thompson administration). Or is it the personality of the people? The attitude of the worker? What? These are the questions you should be asking for you try and just cut taxes on everything. Because let me tell you, if you end up like Indy, you’ll have no cops, no firemen, no protection from big business and landlords screwing you, no mass transportation for your elderly and poor, no nothing…

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