Here & Now

How Has Wisconsin Recovered From The Recession?

Frederica Freyberg:

Wisconsin has snapped back from the great recession, with the worst-hit counties making the strongest comeback. But small counties lost population during the economic bad times, giving a boost to larger, more urban areas. These are the findings from a new paper from the UW-Madison Center for Research on the Wisconsin Economy. The center’s director and paper’s author, UW-Madison Professor of Economics Noah Williams is here with more. Thanks for being here.

Noah Williams:

Happy to be here.

Frederica Freyberg:

So the bottom line is that the counties hit the hardest by the recession were always the ones that experienced the largest catch-up recovery.

Noah Williams:

Thats right. Particularly I looked at several different measures of living standards, whether it’s unemployment, incomes, poverty rates, all of those. The counties which had the worst time during the recession had seen the largest growth and the largest recovery.

Frederica Freyberg:

In fact, a prime example of this was Menomonie County, where its peak employment in 2010 was 15.3% down to a 2017 rate of 4.3%. But would these findings be unexpected?

Noah Williams:

To some extent we do expect where there is more slack, we would see faster recovery. So that’s one of the things I wanted to look at, was also not just the change since the recession, but from 2007 right before the recession onwards. And even over that period which sort of nets out the decline and the recovery, we have seen a convergence. We have seen the worst-performing counties do the best over that whole span.

Frederica Freyberg:

You also found that rural counties are losing people. You found that county population shifted during the recession, with rural counties losing population to urban areas. Dane County, though, gaining like 12.6%.

Noah Williams:

Yes.

Frederica Freyberg:

Compared to the state average of 4%. How does this population shift and movement affect the labor landscape?

Noah Williams:

Yeah. So we — a very prominent policy issue which has come up recently particularly with the low statewide unemployment rate has been labor force shortages. Employers having difficulty finding people to fill jobs. And this shows that that’s really particularly acute in some of the smaller communities. We have seen — I mean, if you look across counties, 12 out of the 13 smallest experienced a net population loss. Average loss of about 4% over the past decade. Whereas all of the 16 largest had an increase, with Dane County being the largest.

Frederica Freyberg:

Would the explanation for that be that people in those smaller rural counties hit hard by the recession were moving to larger population centers for work?

Noah Williams:

Thats certainly part of it, yes. That goes along with a lot of the process, what we call convergence with narrowing of income gaps. Some of that came about by internal migration, by people moving to where there is more opportunity. So the people who are left in the smaller areas are the ones who are actually doing better.

Frederica Freyberg:

How has the decade since the great recession treated Wisconsin incomes?

Noah Williams:

Wisconsin incomes, overall it’s been slow but steady growth. Average income growth on the order of 2% to 3%. But, again, there’s been big divergence across counties, with again the initially poorer counties increasing the most. So one example I gave in the paper was Iron County up in northern Wisconsin. Over the last decade, saw 30% per capita income increase, whereas the statewide average over that whole period was about 9%.

Frederica Freyberg:

Now, you compared not just Wisconsin counties to each other, but you compared Wisconsin to other states in the United States. How does Wisconsin stand out?

Noah Williams:

So one thing we see, there were similar overall trends across the United States, both looking at the state level and at the county level. Where unemployment rates were highest, they’ve come down the most. Where Wisconsin stands out on that is we’ve seen a larger reduction in unemployment than other states around the country. And you see that kind of uniformly across counties within the state. Similarly with population dynamics, we’ve seen increased concentration in urban areas. This has been an ongoing process around the country. Where Wisconsin stands out there is our overall population growth has been lower. So the smaller counties have really lost population and that’s even more of an acute problem in Wisconsin.

Frederica Freyberg:

All right. Professor Noah Williams, thanks very much.

Noah Williams:

Thank you.