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Wisconsin’s Unemployment RatesActual and Projected
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
4.3%
5.3%5.2%
4.5%4.3%
3.7% 3.6% 3.5%3.3%
3.1%3.4%
4.4%
5.3%5.6%
5.0%4.8% 4.7%
4.9% 5.0%
0.0830000000000001
0.0890000000000001
0.075
0.062
0.0510.047
0.042
Some Things You May Not Wish To Know About Wisconsin
• Wisconsin is a low wage state.
• Wisconsin has low productivity per worker.
• Wisconsin has a low post secondary educational attainment level.
• Wisconsin is growing slowly compared to U.S.
• Wisconsin is one of fastest aging states.
Wisconsin is a Low Wage State
• Our average wage is about $38,100 per job, per year.
• We rank 32nd in wages per job.
• The national average is about $44,600.
• Minnesota ranks 14th, at $44,400, Illinois ranks 8th at $47,700.– In the late 1970s we had higher wages than Minnesota.
Wisconsin is a Low Productivity State
• Gross State Product (GSP) per job was $80,731 in 2006.
• National average GSP was $98,032.• Connecticut with the highest was $141,144.• Wisconsin ranked 42nd in productivity per job.• If Wisconsin was at the national average, we would
increase our Gross State Product by $50 billion. That’s $9,300 per person in the state!
Wisconsin’s Post-Secondary Educational Level Is Not High
• We rank 31st in post secondary educational attainment.
• We rank 30th in baccalaureate level degrees.• We rank 36th in masters or higher attainment.• We rank 9th in associate’s degrees.• We rank 11th in students majoring in science and
engineering per population. 44th in science and engineering majors in work force.
Wisconsin is a Slow Growing State
• We rank 30th in growth.
• Natural growth is particularly slow, in migration growth is not fast.
• Our growth is about 60 percent as fast as the United States, at large.
• Our present growth is likely to slow.
Wisconsin is Aging Rapidly
• The state’s baby-boom cohort is unusually large.
• Almost 31 percent of Wisconsin’s population are baby-boomers, decreasing, but slowly.
• Nationally, about 27 percent of population are baby-boomers, but decreasing rapidly.
The Demand SideOf the Labor Equation
• Three factors affecting the demand for workers:
1. The number of jobs has continued to grow, until now;
2. The demand for replacement workers is expanding;
3. The aging population needs more and more services.
Wisconsin Nonfarm Wage and Salary Jobs Until Now Have
Continued to GrowNonfarm Jobs
19801981
19821983
19841985
19861987
19881989
19901991
19921993
19941995
19961997
19981999
20002001
20022003
20042005
20062007
2008 -
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
Wisconsin Nonfarm Wage & Salary Jobs
• Although we have been adding an average of 36,000 jobs per year, that growth will stop for the next few years. There will likely be a loss in total jobs in 2009 and again in 2010.
• There will be a few industries that will not be hit as hard as others, particularly health care.
• “Smart companies” will find ways to hold on to “smart workers”.
• Watch the economic recovery plans!
Wisconsin ResidentsTurning 65 Years Old
20002001
20022003
20042005
20062007
20082009
20102011
20122013
20142015
20162017
20182019
20202021
20222023
20242025
20262027
20282029
20300
10000
20000
30000
40000
50000
60000
70000
80000
90000
Wisconsin ResidentsTurning 65 Years Old
• We don’t know how the wealth effect will play out in retirement plans.
• Workers have been retiring earlier than 65, but plans will change somewhat.
• Older workers who lose their jobs may not return to the job market, but older workers who don’t lose their jobs will likely stay on longer.
Demand Is StrongestWhere Supply Is Weakest
1. Much of the older population lives in more remote areas.
2. Much of the tourist industry is in remote areas.
3. Manufacturing in Wisconsin tends to be in rural areas.
The Supply SideOf the Labor Equation
Five Factors Affecting Supply of Workers:
1. The number of entry level workers is diminishing;
2. There will be little increase from increased female participation;
3. There is a sizeable commuting net loss;
4. The brain drain is real;
5. Wisconsin is low in net gain from migration.
Wisconsin Births1940 to Present
1940
1943
1946
1949
1952
1955
1958
1961
1964
1967
1970
1973
1976
1979
1982
1985
1988
1991
1994
1997
2000
2003
2006
55000
82300
97200
7720072500 72300
69289
United States Births1940 to Present
1940
1942
1944
1946
1948
1950
1952
1954
1956
1958
1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2559000
3632000
4257850
37313863612258
4179000
4058814
Female Labor Force Participation
• Wisconsin is at the top or very nearly at the top of states per female labor force participation rates.
• Approximately 72% of females 16 years old and older participate in the labor force in Wisconsin.
• Approximately 65% of females 16 years old and older participate in the labor force in U.S.
Wisconsin has a strongly negative state-to-state commuting ratio
• Approximately 120,000 workers along Wisconsin borders cross state lines to work.
• 100,000 or those workers live in Wisconsin and leave the state to work. About 20,000 live in neighboring states and come into Wisconsin for work.
• Wisconsin borders Illinois, Iowa, Michigan and Minnesota. The ratio is positive only for Iowa.
The Legendary Brain Drain is RealIndiana Fiscal Policy Institute
Net Migration
Indiana Illinois Michigan Ohio Wisconsin Kentucky North Carolina U. S. Average
67.3%
122.4%
99.4%
85.9%
75.9%
112.0%
103.1%98.2%
The Legendary Brain Drain is RealIndiana Fiscal Policy Institute
Retention
Indiana Illinois Michigan Ohio Wisconsin Kentucky North Carolina U. S. Average
57.8%
81.6%79.6%
74.8%
61.6%
80.2%
69.1%71.3%
The Legendary Brain Drain is RealMinneapolis Federal Reserve
States 1989 College Graduates
1999 College Graduates
Ad’l College Graduates 1989 to 1999
Additional Graduates From State
Gain/Loss
Minnesota 577,920 953,920 376,000 234,945 141,055
Montana 106,977 134,160 27,183 42,976 (15,793)
North Dakota 89,244 89,200 (44) 45,072 (45,116)
South Dakota 79,672 110,848 31,176 40,669 (9,493)
Wisconsin 571,725 790,600 218,875 269,647 (50,772)
Minn Fed Res District
1,425,538 2,078,728 653,190 633,309 19,881
MSAs That Attract College Graduates
City City
1. Atlanta 9. San Diego
2. Denver 10.Houston
3. San Francisco 11.Chicago
4. Seattle 12. Los Angeles
5. Dallas 13.Tampa
6. Phoenix 14.Miami
7. Minneapolis 15. New York
8. Washington, D.C. 16.Boston
Migration Into Wisconsin Has Lagged
• Approximately 12 percent of United States resident population is foreign-born. Highest level since 1920s.
• Approximately 4.2 percent of Wisconsin resident population is foreign-born.
• Some in migration from neighboring states, i.e. Illinois and Minnesota. (Kenosha and Walworth, and St. Croix and Pierce counties)
A Word of Caution• The economy is transitioning from traditional to
new.
• Recessions speed transitions
• Economies will continue to be transformed!
• It is a major mistake when economic development officials ignore or dismiss the structural changes that are being generated by the New Economy.
What is the New Economy?
• The New Economy is knowledge driven.• The New Economy is global.• The New Economy is entrepreneurial.• The New Economy is rooted in information
technology.• The New Economy is defined by innovation.• The New Economy is volatile.
What is Knowledge Activity?
• The intangible ability to use existing facts and understandings to generate new ideas.
• Knowledge is embedded in the education, experience, and ingenuity of the wielder of knowledge.
• Knowledge is the ability to use what you have learned.
• Knowledge is the value-added component of the market.
New and Old EconomiesIssue Old New
Markets Stable Dynamic
Scope of competition National Global
Organizational form Hierarchical Networked
Production system Mass production Flexible production
Key factor of production Capital/labor Innovation/ideas
Key technology driver Mechanization Digitization
Competitive advantage Economies of scale Innovation/quality
Relations between firms Go it alone Collaborative
Skills Job-specific Broad and changing
Workforce Organization Man “Intrapreneur”
Nature of employment Secure Risky
State New Economy Index Kauffman Foundation
Knowledge, Productivity, & Income
• Although education is the great predictor of wages and income, the real cause is productivity.
• Knowledge, by enabling innovation and creativity, provides the mystic value-added to the product or service. Knowledge supercharges goods and services.
• Find states with high educational attainment and you’ll usually find high productivity and high wages.
Wages, Education, KnowledgeKnowledge Rich Economies Wage Rich Economies Education Rich States
Alaska
California California California
Colorado Colorado Colorado
Connecticut Connecticut Connecticut
Delaware Delaware
District of Columbia District of Columbia District of Columbia
Illinois Illinois
Kansas
Maryland Maryland Maryland
Massachusetts Massachusetts Massachusetts
Michigan
Minnesota Minnesota Minnesota
New Hampshire New Hampshire New Hampshire
New Jersey New Jersey New Jersey
New York New York New York
Rhode Island
Utah
Vermont
Virginia Virginia Virginia
Washington Washington Washington
Productivity Comparisons
• The top 12 states averaged $118,530 in GSP per job in 2006.
• The bottom 20 states averaged $80,254. That’s a difference of $38,276 per job!
• Had the bottom 20 states matched the national average, they would have generated an additional $17,777 per job.
• That’s $29.4 billion per state!
MSAs That Attract College Graduates
City City
Atlanta San Diego
Denver Houston
San Francisco Chicago
Seattle Los Angeles
Dallas Tampa
Phoenix Miami
Minneapolis New York
Washington, D.C. Boston
Super MetrosMetroArea
2007Population
Percent Growth
Las Vegas, NV 1,836,333 31.8%
Raleigh, NC 1,047,629 30.2%
Phoenix, AZ 4,179,427 27.5%
Austin, TX 1,598,161 26.3%
Riverside, CA 4,081,371 24.5%
Atlanta, GA 5,278,904 23.3%
Charlotte, NC 1,651,568 23.2%
Orlando, FL 2,032,496 22.7%
Houston, TX 5,628,101 18.7%
Dallas, TX 6,145,037 18.2%
Mid-size Dynamic MetrosMetroArea
2007Population
Percent Change
Greeley, CO 243,750 33.2%
Cape Coral, FL 590,564 33.0%
Provo, UT 493,306 29.8%
Myrtle Beach, SC 249,925 22.1%
Boise City, ID 587,689 25.3%
Ocala, FL 324,857 24.8%
Port Lucie, FL 400,121 24.8%
Fayetteville, AK 435,714 24.6%
Naples, FL 315,839 24.3%
McAllen, TX 710,514 23.9%
Wilmington, NC 339,511 23.1%
Laredo, TX 233,152 19.8%
Bakersfield, CA 790,710 19.2%
Smaller Dynamic MetrosMetroArea
2007 Population Percent Change
Palm Coast, FL 88,397 74.8%
St. George, UT 133,791 46.6%
Bend, OR 154,028 32.1%
Gainesville, GA 180,715 27.9%
Prescott, AZ 212,635 25.9%
Lake Havasu City, AZ 194,944 24.8%
Coeur d’Alene, ID 134,442 22.7%
Sioux Falls, SD 227,171 20.6%
A Transition,Economic to Demographic
• A global economy, where markets transcend and ignore national borders, diminishes and erodes the power and influence of the nation state.
• Nations and states have two choices;1. A broad distribution of education and wealth, or2. A broad distribution of ignorance and poverty.
• Minority populations, which are not wholly participating in the New Economy, will cost states somewhere down the line.
The “New Economy”Characterized by:• Knowledge activity;
1. Innovative2. Creative3. Adaptive4. Collaborative5. Technology based
• Global markets;• Instant communication;• Volatility;• Lessened government influence.