Claim-filing in Wisconsin at record low but economy not booming

A June press release from the Department of Workforce Development declared Wisconsin’s record low unemployment rate:

BLS Data: Wisconsin’s 3.1% Unemployment Rate Tied for 7th Lowest in Nation

State’s Labor Force Participation Rate also tied for 5th highest in country

MADISON – Department of Workforce Development (DWD) Secretary Ray Allen released the following statement following today’s U.S Bureau of Labor Statistics (BLS) release showing Wisconsin tied for the 7th lowest unemployment rate in the nation, significantly lower than the national rate. The release also noted that Wisconsin’s addition of 40,400 total non-farm jobs from May 2016 to May 2017 was statistically significant and Wisconsin’s labor force participation rate was tied for 5th highest in the country:

“Not only is Wisconsin’s 3.1 percent unemployment rate a near record-low for our state, but our rate is lower than that of 42 other states, including the neighboring states of Illinois, Michigan and Minnesota, and tied with Iowa for 7th lowest in the country,” Secretary Allen said. “We also are tied for the 5th highest labor force participation rate in the country, ahead of the neighboring states of Illinois, Iowa and Michigan. Under Governor Walker’s leadership, Wisconsin’s employers and communities are reaping economic rewards from a winning combination of a best-in-class workforce and innovative. proven worker training programs.”

Highlights of Friday’s BLS release of state-by-state employment and unemployment data for May 2017 include:

• Wisconsin’s 3.1 percent unemployment rate tied for the 7th lowest in the nation in May 2017 and was significantly lower than the national rate of 4.3 percent.
• Wisconsin added a statistically significant 40,400 total non-farm jobs from May 2016 to May 2017.
• Wisconsin’s unemployment rate decline of 1.0 percent from 4.1% in May 2016 to 3.1% in May 2017 was statistically significant.
• Wisconsin’s labor force participation rate of 68.8% tied for 5th best in the nation in May 2017.

Other indicators of Wisconsin’s economy include:

• Both total labor force and employment in Wisconsin remained at all-time high in May, while the number of unemployed individuals was its lowest point since February 2000.
• The rate of 3.1 percent is the second-lowest rate on record for Wisconsin (the lowest rate was 3.0 percent in May-July 1999).
• Wisconsin’s January (3.9 percent) to May (3.1 percent) unemployment rate decline of 0.8 percentage points in 2017 is the steepest January-May decline since 1983.
• Wisconsin’s labor force participation rate increased by 0.2 percentage points to 68.8 percent, while the U.S. labor force participation rate decreased to 62.7 percent in May.
• Initial UI claims ended 2016 at their lowest level in their last 30 years. Year 2017 initial UI claims are running at their lowest levels since 1989.
• Continuing unemployment claims ended 2016 at their lowest level since 1973. Continuing unemployment claims in Wisconsin are running the lowest in at least the past 30 years.

Friday’s BLS ‘Regional and State Employment and Unemployment Summary’ report

The last two points deserve particular note:

• Initial UI claims ended 2016 at their lowest level in their last 30 years. Year 2017 initial UI claims are running at their lowest levels since 1989.
• Continuing unemployment claims ended 2016 at their lowest level since 1973. Continuing unemployment claims in Wisconsin are running the lowest in at least the past 30 years.

These indicate that people have stopped filing unemployment claims at levels when in 1990 the population in Wisconsin was around 4.9 million and per capita income was $18,072 or in 1975 when the state population was around 4.6 million and per capita income was $6,086. For comparison, in 2014 the state’s population was nearly 5.8 million and per capita income was $44,585. And, from 1990 to the start of 2015, the civilian labor force in Wisconsin increased from 2,567,200 to 3,120,800 persons.

Furthermore, when the unemployment rate was similarly low in the late 1990s, per capita income rose by over 5% most of those years. As recent economic reports from COWS establish, however, income in Wisconsin is currently stagnant for most Wisconsin residents except for the very few at the top of the income ladder.

So, there are big contradictions in the Wisconsin labor force. People in Wisconsin are working and not filing unemployment claims. But, they are not getting any wage increases from employers who should be having trouble finding job applicants and so trying to entice people to switch jobs with offers of higher wages and greater job benefits.

Perhaps the Department has created a system where unemployment is much higher than the data indicates because people are NOT filing unemployment claims but instead taking low-wage, part-time work as a substitute in large part because full-time, high wage work is not available from employers who are not expanding or growing their businesses. COWS 2017 report on working Wisconsin reveals that the wealth and economic gains at the very top obscures the economic stagnation for the rest of the state’s residents. The August jobs report reinforces this conclusion, as Wisconsin job growth this summer remained stagnant (private sector jobs in July were revised to a 600 decline, August preliminary numbers indicate a 5,200 loss in private sector employment, and only June shows an anemic increase of 1,300 jobs after a revision).