From Free Fall to Free Markets: How Wisconsin Turned Itself Around

"....Governor Scott Walker and the state legislature embarked on an ambitious and bold agenda to bring free market reforms to every corner of the state. ...

New state borrowing has been reduced to the lowest levels in 20 years. Property taxes have been reduced to the lowest levels since 1946, and taxes have been cut by more than $2 billion.

Most importantly, these reforms aren’t just making a difference for lawmakers required to balance the budget. They’re also making a difference in the lives of everyday Wisconsinites and the hard-working families who, for years, had struggled to make ends meet.

Take for example our state’s unemployment rate which, at 4.6 percent, is at a six-year low and almost a full point lower than the national average. Employment is at an all-time high and Wisconsin has literally never had more jobs than it has today.

In 2014, Wisconsin businesses exported more goods than ever before — more than $23.4 billion worth, no doubt helped by the many new businesses flooding into the state.

Families are earning more too. Wisconsin’s median family income is up more than six percent since 2011 to $55,258 a year, rising almost twice as fast as the rest of the country.

The turnaround has been so great that Wisconsin is now ranked the fourth best state in the nation for finding a job — after North Dakota, Texas, and Nebraska. And, if Wisconsin, once weighed down by onerous regulations and costly mandates, can now count itself among the likes of these stunning examples of economic freedom, then clearly the state is doing something right.

April 23, 2015 [Forbes] As The Fed Prepares To Tighten, Which States Have Already Reached Full Employment? ~~Wisconsin among the first states to reach full-employment in the Midwest along with energy-focused states~~

"....The Midwestern economy can generally be divided into states with a significant energy presence that have benefitted from the innovation of horizontal drilling and those that have not and are more focused on manufacturing.

States that have benefitted from the technological advance have arguably seen their natural rates of unemployment fall. For example, the unemployment rates during March of South Dakota (3.5%), North Dakota (3.1%), and Minnesota (3.7%) are well below the national average of 5.5%.

The manufacturing focused states in the Midwest however tell a very different story of a mixed economic recovery. For instance, the unemployment rates of Illinois (6.0%), Indiana (5.8%) and Michigan (5.6%) remain above the national average of 5.5%. Arguably these states have a fair amount of slack in their respective labor markets, especially when considering the decline in their respective labor force participation rates since the Great Recession.

One outlier in the manufacturing branch of the Midwestern economy is Wisconsin that has not only an unemployment of 4.6% (well below the national unemployment rate of 5.5%), but also a labor force participation rate of 68.4% well above the national rate of 62.7%.

An important analytical caveat is when a states like Wisconsin approach or attain full-employment, job growth will likely slow to be more in line with population growth. It’s important to note that the U.S. economy needs to add 80,000 jobs per month according to a paper by Chicago Fed economists Dan Aaronson and Scott Brave simply to keep up with population growth and maintain the same employment rate as the previous month. Some reports have confused this principle in attempting to misuse data to direct political attacks toward Wisconsin Governor Scott Walker, using 12-month job growth as the only metric in measuring the state’s economy, ignoring the unemployment gap (relative to full-employment) and labor force participation, two of the most popular metrics preferred by economists when assessing the state of the labor market.

May 3, 2015 [WSJ] A Closer Look at Scott Walker’s Record on Jobs "Wisconsin ranks 40th in the nation for job growth, or so says a recent Bureau of Labor Statistics report. Many in the media and political circles pounced on the release as evidence that the policies of Republican Gov. Scott Walker, a potential presidential candidate, have left the Badger State trailing much of the nation.

But the report failed to give sufficient context to Wisconsin’s job growth. The BLS, along with other reports touting similar results, ranked states based on how much private employment increased over a year.

Why might Wisconsin’s employment increase seem modest? One reason could be that more Wisconsinites than people in many other states already had jobs, which they did. Another wrinkle comes from factors like the energy boom in the upper plains states. In states like Wisconsin not so blessed with shale, job growth can seem comparatively slow.

Let’s look at Wisconsin’s employment growth since Mr. Walker took office. Since February 2011, Wisconsin’s employable population has grown by about 100,000 people, but the number of people employed increased by about 135,000. That means employment outpaced population growth significantly..........

To hear it from some other sources, Scott Walker has been a “disaster” for Wisconsin, with “crumbling” roadway infrastructure to “failure” of schools everywhere in the state.

This is largely propaganda put out by the public unions, not necessarily based in fact. Until relatively recently, Wisconsin was a “Union shop” state, in which, if there was an organized union working a particular employment venue, all new hires and all existing employees either had to join the union, or at least contribute a certain amount to the designated representing union, else they would be subject to termination. It was certainly made VERY uncomfortable for any employee in that “represented” industry to resist the union demands upon all the employees.

Now that Wisconsin is essentially a “right to work” state, the role of the unions is very different. Unions took a big hit when General Motors ceased production at the Janesville, Wisconsin, assembly plant, and the Rock County area, once a big union locality, has now petered out and is an almost “red” district. Same when American Motors (for many years Nash-Kelvinator) in Kenosha pulled out, the union membership dropped sharply, and with it, representation by Democrats. This area is now represented by Paul Ryan, who was the Vice-President nominee in 2012 with Romney.

For decades, Wisconsin was home to some of the most “progressive” movements in the country, and its center was the University of Wisconsin-Madison. Until about the 1950’s, there was no Democrat party in Wisconsin, had not been since about the time of William Jennings Bryan. About the time of the rise of Teddy Roosevelt, a home-grown populist, Robert La Follette, was organizing the Progressives as a branch of the Republican party in Wisconsin, and there was simply no room for Democrats. Progressives became the opposition party to the “stalwart” Republicans, even though both sides called themselves “Republican”, but people soon knew the difference.

“Wisconsin has literally never had more jobs than it has today.”........

While part of that statement is true, living in Wisconsin I can honestly say, there are more jobs available than people who WANT TO WORK. We see “Help Wanted” signs everywhere. The newspapers are loaded with ads seeking workers.

Second only to Minnesota who leads the nation in give-a-ways, Wisconsin has become a haven for “gimmedats”, people that live off of others.

Solution to the unemployment problem would IMO, be best resolved by cutting out the give-a-ways. Perhaps those on the dole would either go to work or move to Minnesota (One can hope).

Left Leaning Politifact:

Donald Trump says that under Scott Walker, Wisconsin budget went from projected surplus to a deficit

"...Mixing apples and oranges, Trump said that under Walker, Wisconsin "projected a $1 billion (budget) surplus and it turns out to be a deficit of $2.2 billion."

There was in early 2014 a projection of a $1 billion surplus heading into the 2015-’17 budget period. Late in 2014, there was a projection of a $2.2 billion shortfall -- the difference between expected revenues and the amount of money being requested by state agencies. But the shortfall was never a deficit -- and some of the surplus was consciously spent by Republicans, as tax cuts.

For a statement that contains only an element of truth and ignores critical facts that would give a different impression, our rating is Mostly False."

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