By Tom Still
MADISON – The debate over how to create more jobs in Wisconsin will be virtually non-stop during the 2010 election year, as candidates for governor, the Legislature and other statewide offices trade ideas – and a few jabs – about what works.
An opening salvo was fired recently when Republican candidate for governor Scott Walker promised to create 250,000 jobs and 10,000 businesses by 2015, the end of the four-year term for whoever is elected Wisconsin’s next chief executive.
Democratic candidate Tom Barrett called Walker’s goal a “random” number but offered an estimate of his own – 180,000 jobs over three years. Not to be outdone, Republican candidate Mark Neumann made a light-hearted guess when asked about Walker’s goal: “I’ll bid 350,000.”
Whether it’s 180,000 jobs, 350,000 jobs or somewhere in between, all those numbers sound pretty big at a time when nearly 9 percent of the state’s workforce is still unemployed. Is it realistic for any candidate to make specific promises about job creation?
Let’s look closely at the numbers. Wisconsin has a little more than 2.6 million non-farm workers today, so growing that total by 250,000 represents an increase of about 10 percent over four years. That may be possible given recent history and some basic workforce math.
First, Wisconsin’s workforce continues to grow even though many people are out of work. Economist David Ward of Madison-based NorthStar Economics pegs that growth at roughly 1 percent per year, so that modest expansion alone could produce 100,000 jobs over four years.
Second, Wisconsin reported about 262,000 people out of work in January 2010 when the jobless rate was 8.7 percent. If that rate fell to 5 percent over four years, that’s another 100,000 people back on the payroll.
“The overall number (250,000) is very possible,” said Ward, “but the new jobs probably won’t look like the old jobs.”
Here’s why: In early 2000, Wisconsin had more than 2.7 million non-farm workers, with a smaller population base. Unemployment was under 3 percent. The state actually added 125,000 jobs in one year alone, from early 1999 to early 2000.
But that was a time when manufacturing employment in Wisconsin was still very much on the rise. There were 611,000 manufacturing jobs in the state in early 2000, according to state records, compared to 422,000 today.
Most of those manufacturing jobs are lost forever to global competition and industry trends. Manufacturing is still a vibrant part of Wisconsin’s economy, but it has changed dramatically, in part because of technology and other efficiencies.
“While it’s popular to talk about out-sourcing, most of those (manufacturing) jobs were eliminated because of productivity,” Ward said.
Some incremental increases in manufacturing can be expected over time, but the halcyon days of 600,000-plus jobs will remain a hazy memory. So, where will new jobs be produced? Sectors such as care for the aging, education, food processing and safety, some information technology sectors, transportation and alternative fuels hold potential. As Ward explained, rising standards of living in China, India and other emerging nations mean more demand for protein, fiber and energy. Wisconsin is positioned to be a supplier in at least two out of three.
It’s good to set ambitious goals for job growth in Wisconsin, and history shows the numbers can turn around quickly. The real question is how Wisconsin will create the kinds of 21st century jobs it needs. The answer lies within the private sector and its potential for innovation. Between 1969 and 2000 in the United States, Ward noted, 69 million of the 76 million jobs created in the United States were in the private sector.
While all candidates will talk about job creation, remember they’re really talking about how government policies can encourage private sector growth – or, at the least, not impede that growth. Specific goals are important, and so are the strategies necessary to achieve them.
Still is president of the Wisconsin Technology Council. He is the former associate editor of the Wisconsin State Journal.