As the presidential race progresses, it has become clear that Wisconsin’s economy has rebounded. This good news for Wisconsin residents, particularly college students soon entering the job market, means bad news for Senator John Kerry as he vigorously campaigns in this battleground state.
Doing his part to help a fellow Democrat, Gov. Jim Doyle has tried, in the words of a recent story in the Milwaukee Journal-Sentinel, “to tout his state’s economic performance while maintaining the party line that the economy is not up to par.” In doing so, Doyle has attempted to claim credit himself for the recent economic rebound.
Milwaukee County Executive Scott Walker, echoing the sentiments of other state leaders, said, “I don’t know how Jim Doyle, on one side of his mouth, touts the state’s economy, and on the other side of his mouth says George Bush is responsible for a less-than-stellar economy.” He continued, “I don’t see how Doyle can . . . somehow surgically remove that from good feelings about George Bush.”
Several days ago, the Wisconsin Department of Revenue released a quarterly report revealing that tax collections and job growth are exceeding state forecasts and that total personal income growth projections increased to 5.9 percent. This and other reports have shown that Wisconsin’s economic growth has matched or even surpassed national growth. Wisconsin has, for example, also enjoyed a 2.3 percent job increase this year, nearly double the national average.
Besides these recent figures linking Wisconsin to a national trend of upward economic mobility, previous figures indicate that statewide economic growth began before Doyle started his term as governor. In October 2002, the Wisconsin Department of Workforce Development noted declining unemployment in all but three counties. Most importantly, at that same time, state economists and Federal Reserve Bank regional surveys noted significant increases in productivity.
Productivity, which economists generally define as the amount of physical output for each unit of productive input, nearly always lags trends in employment. Simply put, work demand on employees eventually reaches a point that necessitates new hiring. In many corporations, however, upper management will require sustained profitability trends during the fiscal year before authorizing such decisions.
Besides examining general figures, any analysis must consider Wisconsin’s unique economy. Wisconsin is second only to Indiana in reliance on factory employment for jobs. With other sectors of the economy thriving, manufacturing continues to suffer, putting Wisconsin in a difficult situation.
Kerry and other Democrats may try to convince voters that many manufacturing jobs lost in the United States go overseas. In doing so, they ignore the fact that factory jobs often evolve rather than leave. Automation technology has slowly replaced inefficient manual labor. Hence, engineers using their minds have, in many cases, begun to replace tradesmen using their hands. The numbers also simply do not support Kerry’s claim, with the U.S. Labor Department reporting earlier this summer that only 2.5 percent of layoffs during the first quarter of this year resulted from companies moving work offshore.
To understand the shifts in manufacturing jobs, one must realize the differences between the past and present. When orders decline at a factory, assembly lines halt and layoffs often occur. As the orders increase, assembly lines usually start again, along with hiring. In the past, when orders increased permanently beyond production capabilities, plants would expand, creating more blue-collar work.
In the present, engineers and managers work to increase production capabilities on existing lines. The explosion of transistor technology has led to the creation of high performance drives, servomotors and programmable logic controllers that have greatly increased manufacturing productivity at a small fraction of the cost of expansion.
While this hurts blue-collar workers, it has greatly expanded the market and job opportunities for the engineering and sales of these automation products. Since communication technology allows companies to develop and sell these automation products from Wisconsin just as easily as other states, creating the right environment for business is critical. With his tax cuts, President George W. Bush understands this. Doyle, with his veto of the property tax freeze and steadfast opposition to the Taxpayer Bill of Rights, apparently does not.
The good economic news in Wisconsin has occurred despite Doyle’s budget decisions, not because of them. With his many vetoes, Doyle can claim complete credit for many things in Wisconsin, but the current state of the economy is not one of them.
Mark Baumgardner ([email protected]) is a senior majoring in electrical engineering.