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Contrary to previous reports, WI economy added 23,000 jobs in 2011

By   /   May 16, 2012  /   No Comments

By M.D. Kittle Wisconsin Reporter

MADISON – Jensen Metal Products appears to have hit a growth spurt.

The Racine-based manufacturer of fabricated and painted component metal products proposes an expansion that would create 39 jobs at its plants in Racine and Franksville.

Jensen Metal joined the club of Wisconsin companies in recent months announcing expansions, creating jobs.

On the ground, it appears that business has picked up during the past several months, as noted through job announcements like Jensen Metal’s and member surveys from business advocates like Wisconsin Manufacturers & Commerce.

“Our surveys have found that our members are optimistic, and optimistic businesses tend to hire,” Kurt Bauer, president and CEO of WMC told Wisconsin Reporter.

That’s why Bauer said he’s been perplexed by the U.S. Bureau of Labor Statistics monthly job reports, particularly in the last half of last year, showing continual workforce declines.

Bauer was more mystified by a BLS report last month that showed Wisconsin’s economy lost 23,900 jobs between March 2011 and March 2012, the most of any state.

Democrats bidding to unseat Republican Gov. Scott Walker in Wisconsin’s unprecedented gubernatorial recall election pounced on the data, rebuking Walker for what they said was his failed campaign promise to create 250,000 jobs during his first term.

“Walker’s jobs record is a total failure, and this is what happens when you pursue ideology instead of focusing on jobs,” Milwaukee Mayor Tom Barrett, the Democrat’s contestant in the June 5 recall election, said in late April.

Vindication?

On Wednesday, the state Department of Workforce Development released what it billed as actual 2011 jobs data, based on reports from 160,000 employers. The data show Wisconsin’s economy actually added 23,0000 jobs between December 2010 and December 2011.

That’s vastly different than BLS’ Employment Statistics data, which estimated a net loss of 33,900 jobs in 2011 — a swing of 57,221 jobs.

The difference is in how the jobs numbers are reported.

Here’s how it breaks down:

The BLS’ Current Employment Survey, which showed massive job losses, estimates employment based on a survey of roughly 5,500 employers, about 3.5 percent of Wisconsin businesses. The information is released on a preliminary basis every month, revised the following month and not benchmarked for several months later.

As seen with the latest benchmark last month, the change between preliminary and final employment figures can be dramatic.

The Workforce Development data released Wednesday were drawn from quarterly tax reports that include, among other information, monthly employment figures. The reports come from all businesses covered under state or federal employment insurance, representing about 160,000 companies employing some 2.7 million workers in Wisconsin.

It is a much broader universe, representing about 96 percent of employers in the state, according to Workforce Development.

Walker said the fuller report makes it clear that “Wisconsin businesses are headed in the right direction.”

Reggie Newson, Workforce Development secretary, struck tones of vindication.

“It looks like 160,000 Wisconsin employers helped show us the thousands of new jobs that BLS estimates missed last year,” Newson said. “The bottom line is Wisconsin added jobs in 2011.”

Barrett and his backers saw the Walker administration’s jobs numbers as a political stunt less than three weeks before the election and a day before the BLS releases the April jobs report.

“ … (T)oday Walker is trotting out an entirely new set of unverified numbers to distract attention from the fact that under his watch Wisconsin lost more jobs than any other state in the country in 2011, and was the only state in the nation to suffer significant job loss over the past 12 months,” the Barrett campaign said in a statement.

Democratic Party of Wisconsin Chairman Mike Tate mocked Walker’s “’discovery’ of 57,000 jobs” part of a pattern of “miracle math,” asserting the governor has massaged numbers in education, health care and property tax relief.

“Scott Walker’s miracle math is a sight to behold. And somehow, every adjustment seems to benefit Scott Walker,” Tate said on the Democratic Party website. “Sunshine shows the world — and his record — the way it is. And that’s what Scott Walker should fear most.”

More accurate

But economists Wednesday, including University of Wisconsin-Madison applied economics professor Andrew Reschovsky, said the quarterly figures are more accurate than the sample surveys Democrats have used to attack Walker’s handling of the economy.

“It suggests it isn’t as bad as it appears, and shows Wisconsin, reported to have the worst jobs record in the nation, is not that bad,” Reschovsky said.

Still, the economist said Workforce Development’s jobs figures shows Wisconsin’s economy “seems to be growing at an anemic pace,” about 1 percent.

While some earlier news reports claimed Reschovsky donated to Barrett’s campaign, the professor told Wisconsin Reporter he hasn’t given any money to Barrett’s cause, that his wife has.

He said he tries to remain nonpartisan in his role.

Improving signs

Wisconsin, in part, is feeling the effects of slow growth in the national economy, Reschovsky said, adding that it’s difficult to gauge all of the factors that have slowed growth.

But there have been multiple signs of economic recovery in the Badger State in recent months, not the least of which are the improving state revenue figures.

Individual income taxes collections topped $928 million in April, up 3.6 percent from the same month last year, according to the state Department of Revenue. On the year, income taxes collections neared $5.5 billion, up 4.5 percent compared to the first four months of last year.

General sales and use tax collections soared 9.5 percent in April, to $356 million, and were up 4.8 percent in the first four months, to $3.16 billion.

New business formation was up 12.2 percent during the first quarter of the year, compared to the same period last year, and initial unemployment insurance claims are down this calendar year over last year.

The improved jobs figures make sense to Wisconsin Manufacturers and Commerce's Bauer, one of Walker’s biggest champions for the record. But there are some other big numbers that have grabbed Bauer’s attention.

“This is a governor who took a $3.6 billion budget deficit and turned it into a $153 million surplus (based on the latest Department of Revenue estimates) and we’re going to recall this guy? The public should know these numbers,” he said.

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