Here & Now

Wisconsin’s Economic Recovery 'Slow by Historic Standards'

Frederica Freyberg:
The economy and jobs are perennial election issues. That makes the timing of the Center on Wisconsin Strategy’s new report all the more relevant. It’s called “The State of Working Wisconsin.” It contains good news and bad news. For example, while it cites lower unemployment rates in Wisconsin, overall job growth is slow when compared to the national rate. Economist Laura Dresser is the Associate Director of the center. Laura, thanks for being here.

Laura Dresser:
Thanks for having me.

Frederica Freyberg:
So in terms of employment levels and family income, how do we sit compared to 10 years ago in the throes of the recession?

Laura Dresser:
Well, there was quite brutal recession, of course. And then a slow, slow recovery. So it’s 10 years since the recession and finally we’re seeing household income and family income measures of what households bring in back to the levels that — the high watermark of the year 2000. So that’s great news to see that steady progress. It’s really slow by historic standards and it has been a long time coming.

Frederica Freyberg:
You say that wages are not keeping pace with our worker productivity. How so?

Laura Dresser:
One way to think about that is to look at — adjusting for inflation and look at the wage that a worker earned in 1979. The median worker earned about $17.30 an hour. In the year 2017, the median worker, the one right at the center of the income wage distribution earned $18.30 an hour. $1 an hour different. We know that the productivity of the overall economy is substantially higher. We’ve seen productivity and gross domestic product grow substantially over that period. The average return to the worker is about a 3 cents an hour per year over that whole period to get that dollar more now. That’s long-term wage stagnation. We’ve been seeing it even in this low unemployment time. And that’s a really troubling sign.

Frederica Freyberg:
The U.S. Census Bureau is out with a report saying the median household income in the country sits at $61,400. They say Wisconsin’s is at $63,400. So is that a good measure?

Laura Dresser:
It’s a good measure to look at and it’s a good measure to watch over time. It’s been good to see that number coming back up. But again, that number, that $63,000 that the median household income earns now is just at what it was in the year 2000 once you take inflation into account. So the steady progress. It fell hard in the recession, and then made steady progress. That’s good progress to see. But to see something over 17 years to be basically treading water, that’s hard to see.

Frederica Freyberg:
Our unemployment rate in Wisconsin right now is good. But you say that job growth is slower than the national average.

Laura Dresser:
Yeah. It’s an interesting fact that’s been true for a number — for about the last six or seven years here in Wisconsin. We’re just trailing the national job production rates. One of the ways you can see it is that the state of Minnesota, which has fewer residents than Wisconsin, actually has more workers than Wisconsin at this point. And that’s just their economy has grown more like the national.

Frederica Freyberg:
Where is this most pronounced in Wisconsin?

Laura Dresser:
You can completely see a restructuring of where jobs are over the last 10 years or 15 years as well. Rural areas have lost jobs. And urban areas have added 90,000 jobs. So what we see also is an inequality geographically in growth.

Frederica Freyberg:
Really briefly with a minute left, another measure you looked at was poverty. You say 675,000 workers in Wisconsin earn below $12 an hour.

Laura Dresser:
Yeah. And we use that as a benchmark of just a low wage job. It is interesting to note it’s 1 in 5 workers. I think sometimes people feel like I worked in a low wage job once. People work in those but they don’t last forever. But when you see that 1 in 5 workers is in a job paying $12 an hour or less, you know that those workers have a fraction of the healthcare benefits through their employment and pension. And even sick leave is hard to get at below $12 an hour. It’s just a different reality for many, many workers.

Frederica Freyberg:
All right. Laura, thanks very much.

Laura Dresser:
Thanks for having me.