The Wisconsin Taxpayers Alliance reported this week legislators have been too focused on job numbers and have overlooked long-term problems that have led to the state’s job shortages.
The report said Wisconsin has long trailed the nation’s already poor numbers in population growth, wages and new firm creation. Since 1996, Wisconsin’s job growth has been better than the national average in only 28 of 102 months, a big shift from earlier years that saw Wisconsin above the national average often.
According to WISTAX, Wisconsin’s recent struggle in job creation stems from three main sources.
The first is that between 2002 and 2011, the working age of 18 to 64 grew 5.9 percent in Wisconsin, compared to 9.3 percent nationally.
Wisconsin’s second setback is the 2.2 percent rate of new firm creation, which all other states, except Iowa, beat.
“Research is definitive: New firms are essential to creating new jobs,” the report said, noting states with low rates of firm creation rank low in job creation as well.
The report did point to some positives in the state’s job numbers. Despite trailing the nation in overall job growth, the report notes Wisconsin has higher rates than the nationwide average in manufacturing and professional and business services. In manufacturing, for example, the state had a 6.2 percent growth, compared to the nation’s 3.9 percent average.
Dale Knapp, WISTAX research director, noted the importance of manufacturing jobs to the state.
“Wisconsin relies on manufacturing more than any other state, [so] it is really important to us,” Knapp said. “Manufacturing jobs pay much better than other jobs in the state. The manufacturing sector is one area we should pay some attention to.”
Knapp said the higher-paying manufacturing jobs could help deal with the state’s relatively low wages, the state’s third shortcoming the report found.
In 2011, earnings per job in Wisconsin were 12.1 percent below 31 states as well as the national average. According to the WISTAX report, job earnings in Wisconsin have trailed the nation by 10 percent for the past 30 years.
Knapp said WISTAX research has shown across various occupations, Wisconsin has consistently paid workers less than other states.
The report also found the last time Wisconsin’s average wage ranked in the top half of U.S. states was 1980.
Alan Dines, assistant director of University of Wisconsin’s Office of Corporate Relationships, said the way to improve the state’s job situation is through entrepreneurship.
“If we focus on getting more entrepreneurs in power to do what we do best, we will not have to worry about creating jobs,” Dines said.
Dines said the state should encourage start-ups and recognize that a portion of them will be successful. Those that are successful, he said, will fuel jobs for the state.
Knapp agreed the state should focus on the firm creation rates, possibly through venture capital.
He added there is no way the state can guarantee decent wages from jobs created, but he said one way to fix it is to close the skills gap and ensure educational institutions are providing young people with the tools needed for high-paying jobs.