Phil Hauck's TEC Blog

Monday, September 2, 2013

On Wisconsin's Low Job Creation ...

Much has been said about Governor Walker's pledge to create 250,000 jobs coming out of the downturn.  During his administration, about 70,000 jobs have been added on a net basis, about half of what was lost in the downturn years prior.  Early in the recovery, our job creation rate was in the 40s of the 50 states, but last year ended at a rate in the 20s, and we finished the year at 33.  We're still progressing well ... but not as well as we'd like. So, why?
First of all, Governors/Mayors/Presidents/Legislatures don't create jobs.  They work together to put in the environment that will foster/incent people to want to create businesses that can grow and need workers.  Or not.
So, I asked "those who know" why we're not doing really well.
One theme is that much is now in place in Wisconsin, but it's also in place in other states ... and they are more appealing and effective.  It's a question of degree.  We're doing most of the right things, just not as well ... either due to culture or situation.
Their answers:
1.  We have a very high percentage of manufacturing jobs, which took the biggest recession hit.  Productivity increased, so they're being added back at a slower rate.
2.  We're not a Right To Work state ... meaning that if your company is unionized, that all workers must belong to that union.  24 states are, and they happen to be most of the fastest-growing.  Where would you locate a new business/office/plant?
3.  We're still not a strong state for rapid siting and permitting requirements, slowing and defeating expansion decisions regarding Wisconsin.
4. More of the jobs we create are low tech (not low skilled!), not the higher-paying, hard-to-duplicate high tech jobs.
A recent study also noted that from a productivity standpoint, Wisconsin ranks lower.  Work ethic is good, but it's not everything.
We do have much going for us; we're focusing where studies say we should to achieve growth.  We just need more entrepreneurialism, more world-class operators.

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