Here & Now

Scott Hodek on Wisconsin's Job Market, Layoffs and AI's Role

Frederica Freyberg:
Wisconsin’s unemployment rate sits at 3.5%. That’s lower than the national average but for people newly entering the job market like recent graduates, what are their prospects? Is the labor market cooling and what role does AI have? That’s a lot of questions. We take them to Scott Hodek, economist with the State Department of Workforce Development. And thanks very much for being here.

Scott Hodek:
Yeah, absolutely. Thank you.

Frederica Freyberg:
So what does the Wisconsin labor market look like right now for new entrants into it?

Scott Hodek:
Yeah, we’re seeing some deceleration, some slowing at the national level. And, you know, couple that with rising prices, which are a real drag on the economy and some of the other indicators that show some changing spending patterns and, you know, a flattening trend in real disposable income, savings rates, things like that. And we’re definitely seeing then, you know, a slowing national economy. And of course, then in Wisconsin, we feel that as well. When I look though at our overall labor market, there are some bright spots too. I mean, like you noted, we do have a historically low unemployment rate. So if you look at, say, national job openings data, you do tend to see that the higher rates and the separation rates tend to be really tight together. But there’s still, you know, a relatively speaking, a decent amount of openings. We’ve had plenty of times in the past where we’ve had, you know, technological change. And that definitely does cause some disruption. We’ve actually done work for the governor’s task force on AI and looked into where there’s exposure amongst these occupations to AI, and there’s a lot. There will be a lot of exposure, but it doesn’t necessarily indicate substitution. In a lot of cases, it will be folks working with AI. And that’s something we’re already seeing. That said, new grads have always adapted, and there are a lot of job openings out there. And given demographics just with the retirement of the baby boomers, there are a lot of positions coming open that are simply because of retirements. So there actually are a lot of openings and opportunities out there. It’s just a matter of kind of connecting to them.

Frederica Freyberg:
What are the so-called hot jobs right now?

Scott Hodek:
Yeah, a couple of the industries and again, so I’m going to base this off growth, but we’re seeing a lot of growth in health care. And that makes sense with an aging population, but also with retirements. And we’re seeing a lot of growth in construction as well. And you might look at construction and say, okay, well, that’s mostly manual labor. And it’s — there is a lot of that, but it’s not always the case as well. There’s skilled trades like electricians and plumbers. There’s machine operators, and then you’ve got the larger companies that do require accountants and IT. So you do have a lot of different occupations mixed in these fields that have been doing well. But also, you know, if you look at manufacturing over the last few years, it’s been a downward trend in employment. And honestly, over — throughout the past decades, we’ve seen staggered drops in employment, in manufacturing, which we’ve seen nationally as well. This is a kind of a developed world sort of trend. But what we do see is that there are still — there’s still difficulty hiring into manufacturing as well. And it’s — we’re looking at a ton of employment in Wisconsin and a ton of output and contribution to our gross domestic product here. So there are a lot of positions there that are open as well, but we don’t necessarily think about that sometimes as job seekers. Like, is this industry growing? If not, should I not apply there? And the truth is, there’s so many retirements across a lot of these different industries that it’s more a matter of thinking of finding kind of the occupations that fit, right?

Frederica Freyberg:
So what are your long-term projections for trends of the economy? I mean, are people like you looking at potential recession?

Scott Hodek:
Well, we don’t really speculate on what we’re going to see in the future. What I can tell you is that the trend right now has been slowing. That said, if you were to just sort of grab news articles around the country, you would see that while that some economists are projecting that it’ll climb back up, some are projecting that we’ll have lower GDP this year. And there are not actually a ton of them calling for a recession immediately. Again, you know, that doesn’t necessarily mean that we won’t have one or that one isn’t coming. But what I see right now, what I can see right now is what I can tell you. And that’s that we’re seeing a slowing economy. But even despite all the pushback from things like, you know, tariffs, the war in Iran, rising prices, things like that, we’re still seeing growth and we’re still seeing low unemployment rates. And here in Wisconsin, we can look at our unemployment insurance claims data. And we’re still seeing that on trend and below the last couple of years as well. So there — yeah, it’s, it’s difficult to say with all the volatility and uncertainty right now, what we’ll see going forward.

Frederica Freyberg:
Yeah, indeed. All right. Well, Scott Hodek thanks so much.

Scott Hodek:
Absolutely. Thank you.