Wisconsin really is “Open for Business,” so where are all the jobs?

Give Scott Walker credit. He made his campaign slogan “Wisconsin is Open for Business” a reality. In an administration rife with incompetence, corruption, and political patronage, he got this right. According to data compiled by The New York Times from state and federal agencies, Wisconsin is now one of the top corporate welfare states in the nation, second in the Upper Midwest only to automobile bailout-heavy Michigan.

In spite of all these “job creating” incentives and programs, Forbes Magazine recently dropped Wisconsin from 40th to 42nd in the nation in their annual business rankings, making Wisconsin one of the worst states for business in the nation. Just what is going on? By the numbers, Wisconsin should be swimming in jobs. Based on the conservative theory that tax breaks for the job creators will…well…create jobs…

Let’s let the numbers tell the full story.

In total corporate incentives, Wisconsin ranks 14th overall in the nation. At least $1.53 billion went to corporate subsidies in the past year (the state cut $1 billion in public education funding in the 2011 – 2013 budget). These subsidies cost the average taxpayer $268 per year. Remember that number the next time you complain about a $30 per year property tax hike to fund public education. A full 10% of the state budget went to pay these corporate subsidies.

Of the 903 reported corporate grants listed in the Times report, 300 (nearly one-third) have come in 2011-2012 alone, during the Walker administration, primarily through the WEDC “Enterprise Zone Jobs Tax Credit.” In fact, seven of the top ten grant awards totaling over $270 million are 2011 or 2012 grants:

Corporate subsidies

Where has the $1.53 billion in “job creating” investment gone? Could this be the end of the myth surrounding corporate subsidies and incentives spurring job growth? Wisconsin under Scott Walker could be an example of an epic failure of this economic policy theory. Over the past two years, Wisconsin has been far behind the nation in employment recovery, and early 2013 is not looking any better.

Wisconsin employers will slow the pace of hiring in the first three months of 2013 even as the nationwide outlook for job creation is at the most promising levels since the recovery began nearly three years ago, a new survey says.

In Wisconsin, “employers are slightly less optimistic about their staffing plans,” said Manpower spokeswoman Mary Ann Lasky. Nationally, however, “optimism among U.S. hiring decision makers continues to improve,” according to the Milwaukee-based global staffing services company. (Milwaukee Journal Sentinel 12/10/12)

The December 1, 2012 unemployment report from the Bureau of Labor Statistics (BLS) showed Wisconsin with the most first time unemployment claims in the nation for the week ending December 1.

The largest increases in initial claims for the week ending November 24 were in Wisconsin (+5,876), Oregon (+2,328), Ohio (+2,252), Washington (+2,107), and Iowa (+1,262), while the largest decreases were in New Jersey (-23,966), California (-7,053), New York (-6,682), Texas (-6,425) and North Carolina (-2,609).

On December 12, 2012 Scott Walker appeared at a Waukesha County Business Alliance lunch and claimed to be “just under 100,000″  jobs created since he took office. It did not take long for Politifact to rate Walker’s claim “Pants on Fire.”

However, several within his own administration, including his primary spokesman, have said that is the wrong way to measure jobs — you can’t combine partial and full year data sets. As one aide said: It would be “misrepresenting the truth.”

By his administration’s own yardstick, his statement is false. We think it’s ridiculous to — after private admonitions — publicly present it this way. Pants on Fire.

Walker’s continued denial  of his policy failure is becoming sociopathic. In spite of his administration awarding literally billions of dollars to corporate subsidies, Wisconsin continues to lag behind in the recovery. The jobs crisis in Wisconsin is very real – and will not be cured with $10-$15/hour jobs, right-to-work legislation, or ideological social engineering.

Just how bad is it? Recent BLS data from measures the Walker Administration accepts (LAUS, QCEW) show that the money being given to corporations and “small business” to create jobs is not. The question remains…where is the money going?

First, the Quarterly Census (QCEW), Scott Walker’s favorite.

QCEW 1

Since 2010, there is a very moderate upward trend. The actual data show a non-existent job recovery in Wisconsin.

QCEW table

 

According to the latest verified QCEW data, Wisconsin has gained about 40,000 jobs January 2011-March 2012. The yellow highlights indicate the peak pre-recession employment in 2008 – 2,840,648. It is imperative to understand that Wisconsin still has a 200,000 job deficit just to get back to pre-recession employment levels, without accounting for population growth.

But this is December. The QCEW data is slow to be verified and released. The Local Area Unemployment Statistics (LAUS) gives a more current measure based on unemployment data – which the Walker Administration has accepted as an accurate measure. The LAUS paints a similar picture:

LAUS graph

Again, the actual LAUS data shows a jobless recovery:

LAUS table 1

 

The yellow again highlights peak employment, pre-recession. The green highlights the last QCEW data entry in March 2012. According to the LAUS data, from January 2011 – October 2012, less than 20,000 jobs were created since Walker took office. The same data shows a jobs deficit of only about 100,000 to get to pre-recession levels.

While the baseline for each measure is different, the result is the same. Since taking office, Scott Walker has only created 20% of the jobs needed to just get back to pre-recession levels, not accounting for population growth.

The untold story of Walker’s tremendous job failure in relation to corporate welfare is the anemic labor force. Since Scott Walker took office, the total labor force has been virtually stagnant:

labor force graph

 

Once again, the actual data show an anemic labor force – not what a recovery looks like with over $1 billion a year in corporate subsidies being granted.

LAUS table 2

 

Note the high point of the labor force shortly after the recession took hold, in yellow – nearly 3.14 million people. When Scott Walker took office in January 2011, the number had dropped to nearly 3.07 million. As of October 2012, there are only 3.06 million people in the labor force. While the adult population has grown since April 2009, the labor force has dropped by over 70,000.

An 80% deficit in job growth, coupled with a decline of 70,000 people in the labor force. Is this the employment climate over $1.5 billion per year in corporate subsidies gets us?

The people of Wisconsin would be better served investing that $1.5 billion back into public schools. Because the question still remains, what has Wisconsin received for that $1.5 billion “investment?”

 

New documents released by DWD prove Scott Walker lied about “early released” jobs numbers

The day after Scott Walker won the recall election, Badger Democracy received two Excel Spreadsheets from the Department of Workforce Development. The data were the subject of an open records request submitted on May 30; after the Walker campaign insisted the jobs numbers they “early released” had been approved by the US Bureau of Labor Statistics (BLS). Job creation was a critical talking point for the Walker media campaign. Statewide press heralded the new jobs number – without digging deeper into what was released by Scott Walker for purely political reasons. From the Green Bay Press Gazette, May 31, 2012:

“Walker’s Department of Workforce Development provided an email to The Associated Press on Wednesday from the bureau’s staff that shows it gave final approval to the numbers. The email did not say what number the bureau approved, but Workforce Development spokesman John Dipko said it was 23,608, which would be dramatically better job creation in the state than figures based on a different survey of businesses.”

The “different survey,” according to BLS head of QCEW State Census Data Richard Clayton, is not a survey at all. It is a mandatory census completed by all employers in the state. While the survey takes six months to verify, thus taking more time to release, it is more accurate. When taken together with wage information, it gives a good overall picture of the employment situation in a state. The information received by Badger Democracy is a clear indication that the data sent to BLS, compared with information posted on the state “WORKnet” website, and the Walker Campaign press releases do not add up or compare accurately with each other. The Walker rush to politicize jobs data has led to inaccurate and misleading information – if not an outright lie.

It is important to acknowledge that in a recent interview with Richard Clayton at BLS, he clarified BLS only verified their data review was complete – they did not verify data posted on the state website, nor did they supply Wisconsin officials with ANY updated data.

The first spreadsheet obtained is the “Quarter 4 2011 Administrative Data” showing all employees for all categories by month. This is the data submitted to the US BLS by WI DWD. What the Walker Administration failed to include in their press releases is the fact that October, November, and December saw job losses statewide:

UI administrative data
Industry Oct-11 Nov-11 Dec-11
Total  Nonfarm 2699792 2695727 2689262

The data shows a loss of 10,000 jobs from October 2011 – December 2011.  When inserted into a Comparative 2010-2011 Table, it is clear the Quarter 4 losses erased early year gains:

Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2010 2554758 2554127 2568348 2618084 2653196 2686827 2632995 2643127 2661328 2681100 2678957 2670014
2011 2593465 2593551 2611009 2652035 2680769 2713526 2665011 2677522 2697889 2699792 2695727 2689262

The numbers Wisconsin DWD sent to US BLS shows an anemic gain of 19,248 jobs in 2011 – not the 23,000+ (later revised to 26,000+) the Walker Administration/Campaign heralded. 

Where did the 23,000+ jobs number come from? The second Excel Spreadsheet obtained supplies that answer – but raises bigger questions.  The “QCEW 104 vs UI 114 by county” spreadsheet breaks down the statewide jobs data by county. This is the exact spreadsheet submitted to BLS by the Wisconsin DWD. The net change from December 2010 – December 2011 in the “Year to Year  (level)” column amounts to 23,321 – where the 23,000+ number is derived.  The discrepancy in data is evident – and examination of one row shows the rush to release this unverified data has led to false and misleading information being released early for political purposes.

The “Unknown County” row submitted to BLS (and copied here) shows it is the largest sector of job increases in the state. In fact, of note is the large jump from 2010-2011, accounting for most of the job increases in the state:

QCEW (Worknet) UI Admin Data (unreleased) Year-to-Year (level) Year-to-year (%)
Area Industry Ownership Oct-10 Nov-10 Dec-10 Oct-11 Nov-11 Dec-11 Oct Nov Dec Oct Nov Dec
UNKNOWN COUNTY Total All Ind Aggregate of all types 38051 38292 38640 50031 51405 51342 +11980 +13113 +12702 +31.5% +34.2% +32.9%

The DWD posted their numbers “early” for the QCEW – after claiming verification from the BLS. Why then would the data posted on the state’s own website not comply with the data they sent to BLS? Remember, the BLS has not verified ANY data or revised numbers. Here is the “Unknown County from the WORKnet website, Quarter 4 2011 excerpt:

Area Year Period NAICS Industry Ownership October 11 November 11 December 11
UNKNOWN COUNTY 2011 4th quarter 0 Total All Ind Aggregate of all types 47629 48810 48601

A significant difference of approximately 2,500 fewer jobs per month than reported to the BLS – in the area showing the largest job growth statewide in numbers and percentages. If any of these numbers in “Unknown County” are to be accepted; it must be pointed out that the percentage increases and numbers reported by DWD for 2011 are unprecedented – going back to 2007 Quarterly Reports.

According to BLS Chief Richard Clayton, “Unknown County” is classified under two circumstances. First, a small number being due to new businesses that simply fail to check the “County” box on the QCEW Census. Eventually, the system will catch up to them, and they will be classified in the correct county. The second, larger portion are companies with multiple locations in Wisconsin, or out-of-state based employers with employees working in Wisconsin. The employers do not identify a single location, or any location as their base of business in Wisconsin.

State Senator Kathleen Vinehout (D-Alma), expresses concern over the latter scenario. She states that her district, and other borderline areas of the state, are seeing more growth in jobs created by out-of-state employers. The large increase in “unknown county” could be evidence of more non-Wisconsin businesses employing Wisconsin residents.

The “Unknown County” classification is not the only aberration in data. Given that some of those “Unknown County” jobs may have found a county classification in recent weeks, the numbers should still correspond – as no updated numbers get sent from BLS. The state is merely posting its own internal data.

As noted in the first table above, the total non-farm employment in December 2011 from data sent to BLS is 2,689,262. From the Wisconsin WORKnet data, taken from the Quarter 4 County data, the total is 2,689,549.

While this may seem a small difference, consider this…Scott Walker claimed he created 23,608 jobs in 2011. Based on the source of QCEW data, which he is citing, that number is only between 19,248 and 19,535. An overstatement of 16-20%. Those numbers are only accurate if the inconsistent data from the state’s own reporting is accurate. That is why this early data release was so misleading and misstated – nothing has been verified. As Richard Clayton put it, “you’ll find out on June 28, when the Walker Administration does, what the actual verified numbers we are releasing say.”

Professor Laura Dresser (C.O.W.S.) puts things into perspective. Based on accepting Scott Walker’s anemic job growth of 19,000+ jobs; we are still over 200,000 jobs behind getting back to 2007 levels of employment. In addition, recently released wage data indicates that real wages in Wisconsin declined 5% from 2010-2011. The nationwide average was a 1.1% increase for the same period. Wisconsin growth under Scott Walker has been virtually non-existent. Dresser points out that either the small number of jobs created are low wage jobs, or employers are inflating the numbers of jobs reported in the census.

Declining wages and stagnant job growth. Jobs numbers released early and unverified for political propaganda. Documentation of the numbers released only after the election, showing disputed information from what is reported internally and to the US Government.

The persistent, chronic unemployment problem is real; and is being politicized and ignored. Is this what Scott Walker and his supporters stand for?

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