NEWS
State economy shows improvement
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by Carolyn Smith
Thursday, September 8, 2005
The Wisconsin Department of Revenue and Center on Wisconsin Strategy (COWS) have released reports recently announcing strides and shortcomings in the state’s economy over the past year and predictions of the economic atmosphere over the next few years.
The DOR report cited three indicators that the state’s economy is healthy. The state per capita real income is expected to increase by 2.7 percent this year and by nearly three percent in 2006.
“Basically, what the analysis is showing is that Wisconsin’s economy is showing impressive signs of growth,” said Audra Brennan, executive assistant to Revenue Secretary Michael Morgan. “Wisconsin has historically lagged behind the nation as far as personal income growth is concerned. But what this report shows is we anticipate Wisconsin’s real per capita income to slightly outpace the growth of that national level.”
This is a good sign the standard of living for the people of Wisconsin is getting better, Brennan said, adding that incomes are staying ahead of the rate of inflation.
Much of the growth in income is due to expansion in the service sector, Brennan said. Gov. Jim Doyle’s Grow Wisconsin Program is also to thank for the strides in employment the state has made, she added.
“Employment is also continuing to grow at a steady pace, which is also a good sign for residents and businesses both,” Brennan said.
The growth in employment in the state is also predicted to be about 1.2 percent, which, Brennan said, is good news especially for new graduates.
“If there is growth in employment,” Brennan said, “there will be more opportunities for people who are entering the workforce.”
The amount of general purpose revenue taxes collected in the state also increased, growing by 6.6 percent over the last fiscal year.
Brennan said the boost in taxes collected is not only good for the state, but it is another indication the state economy is making progress.
“This allows us to fully fund important programs for our citizens,” Brennan said. “The governor inherited a budget deficit and we’ve been working hard to grow out of it, and that is a good sign those efforts are paying off.”
The third portion of the DOR report showed growth in most of the state’s 12 metropolitan statistical areas.
“What we are seeing is that almost all of the areas are expected to experience growth in the next few years,” Brennan said. “That is a positive thing because the urban centers are vital to the state’s economy.”
However, the state’s economy is sensitive to changes in the price of oil and the steadily decreasing rate of savings, Brennan said.
Though unemployment has fallen in the state, the U.S. Census Bureau said last week Wisconsin had the highest growth in residents living at or below the poverty line.
The Center on Wisconsin Strategy released a Labor Day report explaining the cause of the increase in poverty in the state.
“The median household income has fallen each year since 1999 and the median hourly wage also fell for the first time in nine years,” Laura Dresser, the research director at COWS, said.
Though the jump in the number of Wisconsinites living in poverty may seem alarming, the state still has a lower overall poverty rate than its neighbors.
“Wisconsin has a pretty low poverty rate, so even with this increase, the state is still doing well compared to some other states in the region,” Dresser said. “However, there are more people in the state having a harder time making ends meet.”
Milwaukee was found to have the fourth-highest child poverty rate in the nation, and Wisconsin was also found to have among the highest black-white disparity, Dresser said.
Though several factors have caused the negative changes in the economy, Dresser said the recession in 2001 has been a contributing factor.
“It led to a jobless recovery,” Dresser said. “And it is not surprising that the weakness in the labor market would catch up with us.”
