Labor Shortage Stalls Wisconsin’s Economic Growth, Report Says
Wisconsin also has lower productivity than surrounding states.
Help Wanted. Photo by Andreas Klinke Johannsen (CC BY-SA 2.0)
Wisconsin’s labor shortage is a major barrier to growing the state’s economy, and worker productivity also lags behind neighboring states, a new report finds.
Wisconsin has had more job openings than people on unemployment since 2021. On average, the state had 93,099 more monthly job openings than job seekers from January 2021 through February 2025, according to a report released this week by the University of Wisconsin-Extension.
State data shows the gulf between openings and people on unemployment has been narrowing for more than a year. In April, there were roughly 26,590 more openings than job seekers.
But the trend of more jobs than seekers, coupled with low unemployment and declining labor force participation, means there just aren’t enough people looking for jobs to meet the demand for work, the report says.
In 1969, there were 2.2 people for every job. But in 2023, there were only 1.5 people for every job, the report notes. That means the economy is generating more jobs than people to fill them.
“A lot of Wisconsin businesses have been struggling with finding employees, and they have been for a number of years, going back to before COVID,” said Steven Deller, a professor of agricultural and applied economics at UW-Madison and one of the report’s authors.
From late 2000 to mid-2014, Wisconsin had around 74,000 job openings per month, the report says. After 2014, the average monthly openings nearly doubled to more than 150,000. In the years heading into the pandemic and then coming out of the pandemic, the number of openings exceeded the number of job seekers.
But economic uncertainty around federal trade policy means that trend may not be as pronounced in today’s labor market. The report notes many businesses are in “wait and see” mode, neither hiring nor laying off workers.
A May economic forecast from the Wisconsin Department of Revenue projects that employment in manufacturing and construction will contract in 2025. A recent survey of 208 employers from Wisconsin Manufacturers & Commerce, the state’s largest business lobbyist, found the share of businesses struggling to hire fell to its lowest point since 2014 at 52 percent.
“Many businesses are delaying decisions and investments, including hiring, while a slow economy has more people looking for work,” WMC President Kurt Bauer said in a statement earlier this month.
While the labor market may not be quite as tight in 2025 as in recent years, businesses traditionally try to boost the productivity of their workforce in response to labor shortages.
The UW-Extension report used the state’s real gross domestic product, which is the total value of goods produced and services, as well as employment measures to calculate labor productivity, also called GDP per worker.
It found Wisconsin’s GDP per worker has generally lagged behind Illinois, Iowa, Michigan and Minnesota since the mid-2010s — and the average output per worker in the Badger State fell between 2021 and 2023.
This graphic compares the average gross domestic product per job, a measure of worker productivity, in Wisconsin to the average nationally and to its neighboring states. Photo courtesy of UW-Extension
To some degree, Deller said Wisconsin’s lag in productivity can be attributed to having a large rural population and a lot of small towns. Businesses in rural areas tend to be smaller with less capital to spend on technology, the report noted.
Nationally, non-metropolitan areas accounted for about 9.3 percent of GDP in 2023, according to the report. In Wisconsin, non-metro areas accounted for 19 percent of GDP that year.
“It’s not surprising that Wisconsin’s labor productivity is lower than Illinois, or maybe even Michigan and Minnesota, because Wisconsin tends to be a more rural state,” Deller said. “We don’t have a Chicago. We don’t have a Twin Cities.”
Dane, Waukesha and Milwaukee counties had the highest rates of GDP per worker in Wisconsin, but all three were below the national average, according to the report.
This graphic shows a county by county comparison of the gross domestic product per job, a measure of worker productivity, in Wisconsin. Darker-colored counties indicate higher levels of productivity and lighter-colored counties indicate lower productivity. Graphic courtesy of UW-Extension
Another possible factor is the mix of industries in Wisconsin, Deller said. Some industries, like education, retail, health care and food service, are relatively labor-intensive with limited opportunities to use automation or technology to boost productivity, the report notes.
For example, “tourism is really important to a lot of Wisconsin, but by the nature of the industry, you don’t see a high level of labor productivity,” Deller said.
To address those issues, the report says the state could invest in workforce development and technical education, as well as support high-productivity industries like manufacturing and information technology.
Wisconsin could also look to boost labor force participation by addressing barriers that prevent workers from participating in the economy, such as child care or transportation, the report says. Boosting the number of people moving into Wisconsin could also increase the state’s pool of workers.
“It’s probably difficult to have expansion on your mind when you can’t fill current jobs,” said McKenzie Boyce, one of the report’s authors and a researcher with the UW–Madison College of Agricultural & Life Sciences. “Even if you could fill all current jobs, where are you going to get your next worker from? (That) is where things like child care, migration and education and training come into play.”
Wisconsin’s labor shortage is a barrier to economic growth, report says was originally published by Wisconsin Public Radio.
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