Guest Column, January 2017
Wednesday, January 25, 2017
Wisconsin Must Be Doing Something Right
Guest Columnist John Koskinen
We must be doing something right:
- With statewide unemployment rate dropping to 4%, Wisconsin has reached full employment.
- Wisconsin has gained more than 190,000 private sector jobs over the past six years.
- Initial and continuing unemployment compensation claims are their lowest point in more than two decades.
- Housing starts are up and so are home prices.
Indeed, Wisconsin is doing many things right.
Here are five more often-overlooked features of Wisconsin's economic upswing.
Wisconsin Works: Our state boasts the eighth highest labor force participation rate in the country and the highest in the Great Lakes Region. Wisconsin’s ranking in labor force participation has moved up from the twelfth spot five years ago.
As of November, 68.4% of the state’s population was in the labor force. That's above the rate for November 2014 and 2015. While Wisconsin’s labor force participation increases, it declined in Iowa and Minnesota.
Wage Growth Comeback: Wisconsin’s total private wages grew 5.3% in 2015. While this is a solid number by itself, remember there was no inflation to artificially pump up the number. In inflation-adjusted terms, Wisconsin’s total real private wages and salaries was up 5.1%. That is the strongest total real wage growth since 1998. The average real wage was up 3.2%, also the best year since 1998. The average real wage in Wisconsin has increased for four consecutive years and all indications are it continued in 2016.
Wisconsin is Less Taxing: Wisconsin’s tax burden has been steadily declining. Our state and local tax burden is now the lowest in over 40 years. In 2000, Wisconsin ranked fourth among the states in state and local tax burden and was 14.5% above the national average. Even as recently as 2010, Wisconsin ranked ninth and was 7.9% above the U.S. average. Today, Wisconsin's tax ranking has dropped to sixteenth, just a tad, 1.5%, over the U.S. average. Not only has Wisconsin fallen out the top 10 states in tax burden overall, it is also no longer among the top 10 states for income taxes, corporate taxes, sales taxes and property taxes.
The Kids Are All Right: Wisconsin's millennials are better educated than their parents and out-work their counterparts in the rest of the country. They are also more likely to be fully independent, either on their own or married.
More than 33.6% of Wisconsinites ages 25 to 34, have bachelor’s degrees or higher, very close to the national average. That is a big shift from their parents and grandparents, as just 27.4% of the state’s population as a whole has that education level.
Wisconsin millennials work harder than their counterparts in the rest of the country. In Wisconsin, residents between 20-24 years of age, 76.7% are the in the labor force; from 25-29 it is 82.2%, and between 30-34 it is 83.5%. The national average for those age groups are much lower at 64.7%, 75.2% and 76.4% respectively.
So, it should not be a surprise Wisconsin millennials are more independent than their counterparts in the rest of the country. Nationally, 34% of 18-34 year olds still live with their parents. In Wisconsin, it is 27%.
We’ve Got You Covered: Wisconsin ranks sixth best among the states in health insurance coverage. More than 94% of the state’s residents are covered by health insurance, nationally that figure is 90.6%. Between 2013 and 2015, 195,000 more Wisconsin residents added health insurance. In Wisconsin the dominant form of coverage is employer sponsored health insurance. Wisconsin also ranks sixth in the nation for employer provided health insurance.
These five factors are not meant to be comprehensive. That would be difficult. There are other overlooked metrics that point to why Wisconsin's economy is performing at its highest level in the past fifteen years or more.
As I said, Wisconsin must be doing something right.
John Koskinen is the chief economist for the Wisconsin Department of Revenue.