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| Friday, September 4, 1998 Governor Tommy G. Thompson Secretary Linda Stewart | News Media Contact Michael H. McCoy 608/267-4400 e-mail: mccoymi@dwd.state.wi.us fax: 608/266-1784 |
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"We've had a chance only to briefly look at the study, scheduled for official release Sunday, from the UW-Madison Center on Wisconsin Strategy entitled ‘The State of Working Wisconsin: 1998.'
"Despite the gloomy picture it attempts to paint, it should not be overlooked that the study itself quietly acknowledges that Wisconsin has been doing better than the nation.
"It points out that per-capita income growth has increased faster than in the U.S., that median wages and family income are up and growing faster in Wisconsin than in the U.S., and that our unemployment rate remains substantially below the U.S. That's all very good news, and counter to the conclusions of this report.
"One of the problems with the study is that the data used for comparison is so old and that the base year used -- 1979 -- was unusually and temporarily strong, particularly for manufacturing. Using comparisons with 1990, 1987, or 1985, for example -- or most any other time period since 1979 -- would paint a different, and more positive, picture.
"For example, while median U.S. household income in constant 1995 dollars increased just 3.6 per cent (from $32,878 to to $34,076) between 1984 and 1995, household income in Wisconsin in the same period jumped 10 times the national increase, or almost 35 per cent (from $30,426 to $40,955)!
"Wisconsin once again led the nation in this important household economic indicator.
"And the state's national ranking in median household income jumped from 33rd among the states to 5th in the same time period!
"Another weakness is that the study does not take into consideration the impact of the many high-skilled, high-wage jobs currently going unfilled in Wisconsin in perhaps unprecedented numbers.
"As long as those jobs remain vacant in those numbers, the wages associated with them can not be reflected in the average or mean wage calculations. If the jobs were filled and the wages included, the impact would be positive.
"Further, a curious phenomenon occurs when the economy is in an expansion cycle. Heavy hiring tends to depress the average wage -- not in reality, but statistically.
"That's because new hires tend to start at entry level of the wage scale, whether factory worker or physician.
"No matter how excellent the newly-hired attorney's remuneration, it is not likely to equal the senior partners'.
"The impact of hiring new entry-level workers, then, is to lower the average pay of all workers even if entry-level wages have increased. Conversely, laying off lower-paid, low-seniority workers raises the average pay for those who remain.
"When comparisons with most years of the 1980s and 1990s would present a different picture of the health of Wisconsin's economy, it is unfortunate -- and troubling -- that the Center would select the time period it did for its comparisons. It raises suspicions that ideological factors may be at least a consideration.
"Wisconsin, like the rest of the nation, lost a number of manufacturing jobs in the early 1980s. We, however, went about the task of rebuilding an economy with a different mix of jobs. That has benefited Wisconsin working families."