Wisconsin’s Unemployment Rates Actual and Projected

1. Wisconsin’s Unemployment RatesActual and Projected

2. 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.

3. 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.

4. 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!

5. 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.

6. 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.

7. 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.

8. The Demand SideOf the Labor Equation • Three factors affecting the demand for workers: • The number of jobs has continued to grow, until now; • The demand for replacement workers is expanding; • The aging population needs more and more services.

9. WisconsinNonfarm Wage and Salary Jobs Until Now Have Continued to Grow Nonfarm Jobs

10. 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!

11. Wisconsin ResidentsTurning 65 Years Old

12. 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.

13. Demand Is StrongestWhere Supply Is Weakest • Much of the older population lives in more remote areas. • Much of the tourist industry is in remote areas. • Manufacturing in Wisconsin tends to be in rural areas.

14. The Supply SideOf the Labor Equation Five Factors Affecting Supply of Workers: • The number of entry level workers is diminishing; • There will be little increase from increased female participation; • There is a sizeable commuting net loss; • The brain drain is real; • Wisconsin is low in net gain from migration.

15. Wisconsin Births1940 to Present

16. United States Births1940 to Present

17. 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.

18. 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.

19. The Legendary Brain Drain is RealIndiana Fiscal Policy Institute Net Migration

20. The Legendary Brain Drain is RealIndiana Fiscal Policy Institute Retention

21. The Legendary Brain Drain is RealMinneapolis Federal Reserve

22. MSAs That Attract College Graduates

23. 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)

24. 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.

25. What is the New Economy? • The New Economy is knowledgedriven. • The New Economy is global. • The New Economy is entrepreneurial. • The New Economy is rootedin information technology. • The New Economy is defined by innovation. • The New Economy is volatile.

26. 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.

27. New and Old Economies

28. 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.

29. Wages, Education, Knowledge

30. 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!

31. MSAs That Attract College Graduates

32. Super Metros

33. Mid-size Dynamic Metros

34. Smaller Dynamic Metros

35. 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; • A broad distribution of education and wealth, or • 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.

36. The “New Economy” Characterized by: • Knowledge activity; • Innovative • Creative • Adaptive • Collaborative • Technology based • Global markets; • Instant communication; • Volatility; • Lessened government influence.