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Statewide Analysis - Dennis Winters, Chief Economist

Arrgh!
April 20, 2009

Just when we thought we were seeing some glimmers of hope on the possibility of perhaps defining maybe the beginning of the end of the rapid rate of the economic downturn, we get hammered by the latest economic data. With pressure mounting to find good news in the economic situation, spying the "green shoots" of recovery in Fed parlance, we were grasping at things such as the "rate of the downturn has lessened". In other words, we were looking at the second and even third derivatives of the data trends, and comparing them with recessions passed to see if we could raise consumers' confidence a bit and send them back on a spending spree supported by the pending flow of stimulus money.

I even printed out a packet of graphs for internal discussion complete with little orange circles showing where the indicator was not, indeed, as bad as the previous recent data points. By not as bad, I mean not necessarily good. For example, industrial production was only declining by two percent instead of four percent last month and the ISM manufacturing index had climbed from 35 to 36 (below 50 means contraction). Or, housing starts had popped up to a 580,000 annual run rate (we figure the equilibrium annual run rate is something like 1.6 million units). Even news of April 15, from The Associated Press, "Housing index posts biggest jump in 5 years. Economist: 'We are at or near the bottom of the current housing depression'." (My emphasis added.) The article goes on to say, the builders' confidence index "posted its biggest one-month jump in five years"; all the way to 14. Later the article mentions that "readings lower than 50 indicate negative sentiment".

Well, it was working. The stock market launched a rally March 9th. Then some big banks issued positive earnings reports. Well Fargo was first out of the shoot, even reporting early, with first quarter profits. Imagine, banks actually making money. Halleluiah, the market is risen. Let's get back in. The market recovered twenty percent off the lows. The Dow Jones 30 Industrials has been meandering around the 8,000 level for a couple weeks now, up from the 6,500 level in early March.

Oh, Rats

Beginning the week of April 13, a spate of significant economic data releases came out: Tuesday, retail sales, business inventories, and producer price index; Wednesday, consumer price index, industrial production, and housing market index; Thursday, housing starts and jobs numbers; and Friday, consumer sentiment.

• March retail sales were down 1.1 percent – down across the board by product class and store chain with the exception of Walmart, which was up, but less than expected – a factor given was that the late Easter pushed sales into April.
• Business inventories continue to decline 1.3 percent – good for the long-term, not so good for GDP or short-term hiring. Core producer price index was essentially unchanged – utilization capacity low.
• Consumer price index essentially unchanged – lower gasoline prices took it negative. Industrial production was down more than expected as was capacity utilization, the 69.3 percent utilization figure is lowest on record – no demand for goods.
• Housing market index up five points to 14 – see above. Housing starts fell 10.8 percent in March – the 510,000 annualized pace was down 48.4 percent over the year. Housing permits were also down 9.0 percent – so much for housing rally.
• March Wisconsin jobs numbers continued to decline with year-over-year comparison showing 112,400 fewer jobs – unadjusted unemployment rate increased to 9.4 percent, now above national rate. So, is it any wonder consumer spirits remain near historic lows, although they are beginning to move in the right direction.
• The Reuters/University of Michigan's consumer sentiment figure increased to 61.9 from 57.3 two weeks ago. The index was near 90 for most of 2007. Sub-measures in the report show a rise in the expectations component, indicating consumers may believe the worst has passed. If gasoline goes to $3 or $4 a gallon this summer, consumer confidence will wither and additional cash will be run out the tailpipe. (Every dollar change in the retail price of gasoline amounts to about a $100 billion shift in spending flows.)

But before we lose all hope, these data points do show a change in the economic trends. The fact that the data are volatile instead of just monotonically decreasing is usually the first sign that the economy has seen the worst. Right now, it appears that it will be sometime yet before we build a critical mass of optimism, confidence, consumer spending, and business investment to truly turn the economy around. Jobs recovery is a lagging activity and it may well be another year before job gains begin in earnest.

As an old baseball voice was heard to say when the chips were down, "Huh, we gotta do sumptin' ", (unattributable).

Much is resting on the success of stimulus package, thawing the credit crisis (which is actually making progress in several quarters), and re-instilling confidence in the consumer and business sectors, not only in the U.S. but in Europe and Asia as well. China's stimulus package amounts to what would be about $2.5 trillion for the U.S. in equivalent GDP terms (non-purchasing power parity). I think that the U.S. and China working together could, and probably will, bring about the global economic turnaround, maybe even by the end of this year.

 

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Bay Area Analysis - Kimberly Berg, Labor Market Analyst

Times are changing. In particular, the population is becoming more diverse according to the U.S. Census Bureau. County population by age, race, and Hispanic origin for the year 2007 became available in August 2008 (http://www.census.gov/popest/datasets.html).

However, the population is diversifying. The not Hispanic, white populations are smaller shares of the total populations in 2007 compared to in 2000 in the Bay Area Workforce Development Area (WDA) counties, with the exception of Menominee County. Unlike the other counties in the Bay Area WDA, Menominee County's not Hispanic, white population became a larger share of the total population in 2007 compared to in 2000. Menominee County is a tribal community with very few not Hispanic, white residents. In fact, in 2007, only 12.3 percent of the total population in the county is not Hispanic, white. This is compared to 90.1 percent in the Bay Area WDA and 85.4 percent in Wisconsin. The Hispanic population is the only population group in Menominee County that followed suit with the remaining counties in the Bay Area WDA. This group increased in share between 2000 and 2007. Menominee County's share of the total population increased from 2.8 percent in 2000 to 5.4 percent in 2007. This is compared to 2.6 percent in 2000 to 3.9 percent in 2007 in the Bay Area WDA and 3.6 percent to 4.9 percent in Wisconsin. The not Hispanic, nonwhite population increased in its share of the total population in all areas except Menominee County. Menominee County's share dropped from 85.4 percent of the total population in 2000 to 82.3 percent in 2007.

The graph below illustrates Bay Area WDA's ethnicity and race distributions by age group. The not Hispanic, white population is older on average with the largest share of its population between the ages of 40 and 59 (31.2%). The Hispanic population, on the other hand, displayed a different picture. Approximately 38 percent of the Hispanic population is between the ages of 20 and 39 (child bearing and prime working years) and 25.4 percent of the Hispanic population is under the age of ten. As a result, the Hispanic population tends to be younger on average. Similar to the Hispanic population, the not Hispanic, nonwhite population is also younger on average, although a proportionately smaller share of residents are between the ages of 20 and 39 (32.1%) and under the age of ten (19.9%). This will likely cause the population in the Bay Area WDA to diversity further than it already has.

 

What does this mean? As the population shifts and more and more residents in the Bay Area WDA enter the ages typically associated with retirement, the labor force may grow more slowly. This may cause stiffer competition between employers when recruiting workers. It is likely that the population will continue to diversify and as a result, this shift in the population coupled with the slower growth in the labor force will give employers even more opportunities to diversify their workforce.

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Fox Valley Analysis - Kimberly Berg, Labor Market Analyst

Times are changing. In particular, the population is becoming more diverse according to the U.S. Census Bureau. County population by age, race, and Hispanic origin for the year 2007 became available in August 2008 ( http://www.census.gov/popest/datasets.html).

Between 2000 and 2007, the population in six of the seven counties in the Fox Valley Workforce Development Area (WDA) grew. Green Lake County was the exception. As the population grew, or in Green Lake County's case, shrunk, the demographics of the population changed. The graph below displays three ethnicity and race groups as shares of the total populations in the year 2007. The three bars in each area should add up to 100 percent (total population). In all counties in the Fox Valley WDA, the not Hispanic, white population accounts for the largest share of the total population in 2007.

However, the not Hispanic, white populations in the Fox Valley WDA counties are smaller shares of the total populations in 2007 compared to in 2000. In addition, the populations in the Fox Valley WDA counties are less diverse than in Wisconsin. In fact, 92 percent or more of the total populations in each of the seven counties in the region are not Hispanic, white. In particular, Waupaca County is the least diverse county in the Fox Valley WDA: 96.5 percent of its total population in 2007 was not Hispanic, white. This is compared to 85.4 percent in Wisconsin in 2007. While the Not Hispanic, white population became smaller shares of the total population in the Fox Valley WDA between 2000 and 2007, the other two ethnicity and race groups listed below became larger shares of the total populations in 2007 compared to in 2000. Fox Valley WDA's Hispanic share of the total population increased from 1.9 percent in 2000 to 2.8 percent in 2007. This is compared to 3.6 percent in 2000 to 4.9 percent in 2007 in Wisconsin. Fox Valley WDA's not Hispanic, nonwhite share of the total population increased from 3.6 percent in 2000 to 4.1 percent in 2007. This is compared to 9.0 percent in 2000 to 9.8 percent in 2007.

The graph below illustrates Fox Valley WDA's ethnicity and race distributions by age group. The not Hispanic, white population is older on average with the largest share of its population between the ages of 40 and 54 (23.9%). In addition, 13.9 percent of the not Hispanic, white population is 65 years old or older. Only 4.9 percent of the not Hispanic, nonwhite population and 3.2 percent of the Hispanic population are 65 or older. In fact, the Hispanic population tends to be younger on average and therefore displays a different picture on the graph below compared to the not Hispanic, white population. Approximately 37.3 percent of the Hispanic population is between the ages of 20 and 39 (child bearing and prime working years) and 33.9 percent of the Hispanic population is under the age of 15. Similar to the Hispanic population, the not Hispanic, nonwhite population is also younger on average, although a proportionately smaller share of residents are between the ages of 20 and 39 (33.4%) and under the age of 15 (29.2%). This will likely cause the population in the Fox Valley WDA to diversity further than it already has.

What does this mean? As the population shifts and more and more residents in the Fox Valley WDA enter the ages typically associated with retirement, the labor force may grow more slowly. This may cause stiffer competition between employers when recruiting workers. It is likely that the population will continue to diversify and as a result, this shift in the population coupled with the slower growth in the labor force will give employers even more opportunities to diversify their workforce.

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Milwaukee/WOW Analysis - Betsy Falk, Economist

Total Personal Income (TPI) for Milwaukee did not increase as much as either the state or nation during the prior one and five year periods. With an increase of 5.2 percent during the 2005 to 2006 time period, Milwaukee lags behind the state's 5.4 percent and the nation's 6.7 percent increase. TPI over the past 5 years has Milwaukee with a 15.6 percent increase, the state at 20.7 and the United States at 25.8 percent. Milwaukee's Per Capita Personal Income (PCPI) increased by 4.9 percent over the one year period. This is slightly more than Wisconsin's 4.8 percent increase but less than the United States' increase of 5.6 percent. Milwaukee's five year PCPI increase of 13.6 percent lagged behind the state's 17.0 percent and the nation's 20.1 percent increase.

The employment picture for Milwaukee WDA shows both bad and good news. While the area lost 28,501 jobs during the five year period from 2001 to 2006, during the one year period from 2005 to 2006, Milwaukee added 2,691 jobs. While the loss of jobs is significant, the increase in employment over the one year period is encouraging. The industries shedding the most jobs were manufacturing with 17,346 less jobs in 2006 than 2001. Trade, Transportation and Utilities totaled 11,046 less in 2006 than 2001.

The 3 counties making up the WOW Workforce Development Area, Ozaukee, Washington and Waukesha, showed very strong growth in both Total Personal Income (TPI) and Per Capita Personal Income (PCPI) for the past year. From 2005 to 2006, TPI increase by 7.4 percent, .7 percent higher that the US and 2.9 percent higher than Wisconsin. Following a similar trend, PCPI was 1.3 percent higher that the US and 2.1 percent higher than Wisconsin.

The March 2008 unemployment rate for Milwaukee/WOW is between the state and nation. At 5.4 percent, the rate is .2 percent lower than Wisconsin and .2 percent higher than the United State. All three reporting entities show similar trends with the highest unemployment rate in February and the lowest rate in October.

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North Central Analysis - Bill Brockmiller, Labor Market Analyst

The industrial landscape contained in the North Central region is as varied as any in the state, with a wider spectrum, than the commercial terrain of many other Wisconsin communities. This is one of the strengths of North Central's economy, and the growth in several key sectors is at least a qualified assurance of future stability.

Nevertheless, one of the cornerstones of the North Central economy is currently sailing through a hail storm. Papermaking, one of the two signature sectors in the area (the other – healthcare) has been bleeding employment and market share for several years now. This blood letting has intensified over the course of the last twelve months.

It, in fact, is the principle reason for the current downturn in the area's economy report. When comparing June 2008 numbers to the same month in the previous year, one is immediately struck by the loss of over 1,100 jobs in manufacturing. Another 1,100 plus loss is reported in construction employment, due in part to the trickle down effects of the national housing and finance crisis. Trade employment is down over 500 from a year ago; unquestionably ramped up inflation, housing troubles, and layoffs in the two aforementioned sectors are contributing to the drop in trade employment.

Although there are not up-to-the-minute numbers available for what's happening to household incomes, one can surmise that those incomes are falling in many parts of the region, as construction and manufacturing are two of the best paying sectors in the region.

Economic conditions have slipped down a notch in several North Central counties, including the largest county, Marathon. While the unemployment rate is flat compared to last year, the only reason it hasn't increased is because of a shrinking labor force in Marathon. The number of workers discouraged by labor market conditions and thereby removing themselves from the work pool is on the rise. How much this phenomenon accounts for the almost 1,100 person drop in the labor force is not certain, but what is certain is that discouraged workers ("giving-up") are a contributing factor. Every month of 2008 thus far (January – June) has reported a lower total employment count than found in the same month in 2007 in Marathon County. June 2008 is down almost 1,000 workers as compared to June 2007.

On the other hand, it's the diversity of the area's economy that is saving it from a far worse outcome. Health care employment is up over 1,600 from a year ago; and a welcome increase in leisure and hospitality employment is also noted. (up 1,500+) Region-wide employment is up by a little more than 2,200 over the year, and the unemployment rate is down by 0.1 of a percentage point.

Recently released estimates of 2006 personal income indicate that Total personal income (TPI) in the North Central region of $12,970,698,000 is 6.8 percent of Wisconsin's TPI and increased only 4.9 percent in 2006, slower than the increase of 5.4 percent in the state and 6.7 percent in the nation.

Within the nine-county region Marathon County had the highest total personal income (TPI) in the area, at over four billion dollars; do in part to the fact that Wausau is the largest population center in North Central. However, the fastest growing TPI in the area belonged to Vilas County, owing to the trend of retirees moving to Wisconsin's picturesque bucolic counties. Vilas' TPI grew by 26 percent since 2001. Lincoln County saw the slowest growth in North Central, at 17.8 percent.

Total personal income includes income from three main sources: net earnings; dividends, interest and rent; and transfer receipts. Net earnings make up the majority of income, with the remaining percentage divided between the other two components. The exact distribution help analyze a given area.

Amongst North Central counties, net earnings made up the highest proportion of TPI in Marathon County, with its relatively large concentration of employers. Not surprisingly, the lowest share of income from net earnings was found in Vilas County, since retirees earn the majority of their income from sources other than wages. Net earnings made up only 48 percent of income in Vilas County, the lowest share in the state.

(Note: TPI estimates are for 2006, the most recent year available. This TPI data was released in May of 2008 and this analysis was written in August of 2008.)

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Northwest Analysis - Scott Hodek, Economist

The temperatures are climbing and workers in Northwest Wisconsin are shedding their cold-weather garb to return to jobs suspended during the winter months or to seek out new jobs that are added every year in April, May and June by the employers in this ten-county region. Even in the "tough" years employers add workers to get on with the business of new construction and reconstruction, providing leisure activities and hospitality to both residents and non-residents, and accommodating the many tourists and seasonal residents who visit the area's lakes, parks, and golf courses.

Every year from April to June, employers in Northwest Wisconsin add thousands of workers to their payrolls. The average increase during this three-month period over the last five years was 4,450 jobs – 2007 witnessed the smallest increase in 15 years with the addition of only 4,000 jobs. Unmistakably, most of the jobs are added by employers in leisure and hospitality businesses which is followed closely by an increase in jobs with construction employers. Will the April to June pattern be repeated in 2008? Probably. Even though construction jobs might not reach the same levels as in years past, leisure and hospitality employers are gearing up for a year that could see tourist traffic increase especially from Midwest metropolitan areas and Canada as high gas prices keep vacationers closer to home.

The increase in jobs every spring is important to workers in the region and the wages earned by those workers who live in one of the ten counties of Northwest Wisconsin are significant to the region's overall economy. Unfortunately, the seasonal or temporary nature of those jobs and that many are in the leisure and hospitality industry, an industry that pays, on average lower wages, is one reason why the area's per capita personal income ranks the lowest of the eleven workforce development areas in Wisconsin.

Total personal income (TPI) in the northwest region of $4,711,253,000 is less than three percent of Wisconsin's TPI and increased only 3.7 percent in 2006, slower than the increase of 5.4 percent in the state and 6.7 percent in the nation. Net earnings from the region's workers comprise 59 percent of TPI, roughly nine percentage points lower than the proportion in either the state or nation. Per capita personal income, the result of dividing TPI by the area's population, increased 4.1 percent in 2006 also slower than state and national increases of 4.8 and 5.6 percent, respectively. The 2006 PCPI in the northwest region of $26,127 was 76 percent of Wisconsin's PCPI of $34,405 and 71 percent of the United State's PCPI of $36,714. Constraining PCPI growth in the northwest area is its large share of elderly, primarily living on fixed incomes; a shortage of highly-skilled and high-paying, technical and professional jobs; and wages that consistently fall short of state and national wages. In 2006, the annual average wage for a worker in Northwest Wisconsin was only 75 percent of the annual average in the state.

Within the ten-county region, Price County had the highest per capita personal income at $28,160 which ranked 40th highest among the state's 72 counties, while Rusk County, with a PCPI of $22,349, ranked 71st.
Additional information on total personal income and per capita personal income for the state's 72 counties, 13 metropolitan areas, and 11 workforce development areas is available on the Office of Economic Advisors web site at: http://dwd.wisconsin.gov/oea/per_capita_personal_income/

For all local area personal income tables published on April 25, 2008 by the US Bureau of Economic Analysis (US Dept. of Commerce) follow the instructions at this link:

http://www.bea.gov/regional/index.htm#state

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Southwest Analysis - Dan Barroilhet, Economist

The U.S. Department of Commerce's Census Bureau released population estimates for July 2007. The fact that Rock County continues to be South Central Wisconsin's most populated county will seem obvious to most readers.The U.S. Department of Commerce's Census Bureau released population estimates for July 2007. The fact that Rock County continues to be South Central Wisconsin's most populated county will seem obvious to most readers.

Population growth, diversity, and age distributions offer more fertile ground for analysis. Stronger population change figures are often found in metropolitan counties like Rock County and in counties like Green and Iowa that are tied to metropolitan areas. Rural areas like Richland and Lafayette counties often post slower population growth or slight population declines. Frankly, the Census Bureau's estimate of population decline in Grant County is not in synch with other indicators. Although the time period differs slightly, Wisconsin demographers estimate modest population growth (not decline) for Grant County.

Adding the Hispanic population (of any race) to the non-Hispanic population of every race except white, the graph above shows what share of each county's population falls into either category or both. The first thing that stands out is that every county in Southwest Wisconsin saw increases in the Hispanic and nonwhite population as share of total population. The second thing that stands out is that the Hispanic and nonwhite population was a much larger share of total population in Rock County than in other Southwest Wisconsin counties. Because the white, non-Hispanic population tends to be older than nonwhite populations and the Hispanic populations, diversity ratios have implications for future labor force participation rates and labor force growth.

Southwest Wisconsin's non-Hispanic white alone population is somewhat more concentrated in age cohorts historically associated with retirement and the last years of work. Meanwhile, Southwest Wisconsin's Hispanic population (which may be of any race) tends to be more concentrated in age cohorts historically associated with the beginning of a career. Southwest Wisconsin's black population and two-or- more-races population are both concentrated in age cohorts associated with education and training. Baby boomers are disproportionately non-Hispanic white alone; as they retire and employers turn to younger populations to fill vacancies, the workforce will become more diverse. Counties with more diverse populations may have greater numbers of younger workers to draw from when employers need to replace baby boomers.

Over half of Southwest Wisconsin's residents live in Rock County, so age demographics there will have a powerful impact on the region. Residents between the age of 15 and 24 make up over 19 percent of Grant County's population. While this is substantially higher than the comparable figure for the region or the state (both roughly 14%), Grant County's population is less than one-sixth of Southwest Wisconsin's total population. Local colleges that are large in relation to the county's population are not large enough to make up for the wider region's propensity to send away (perhaps temporarily) people in their late teens or early twenties. This trend is particularly noticeable in Green, Iowa, Lafayette, and Richland counties. (These four counties are presented as a single aggregated unit because their individual trends were so similar as to be difficult to distinguish on a graph.)

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South Central Analysis - Dan Barroilhet, Economist

The U.S. Department of Commerce's Census Bureau released population estimates for July 2007. The fact that Dane County continues to be South Central Wisconsin's most populated county will seem obvious to most readers.

The relationships between population density, population growth, diversity, and age distributions offer more interesting analysis. It would be somewhat circular to say that the counties with more population post larger numerical population growth, but it is worth noting that they also tend to post faster proportional population growth.

Also, population density appears to correlate to some degree with diversity. The graph above shows the share of each county's total population that is in the combined population group of Hispanic (of any race) and non-Hispanic nonwhite in years 2000 and 2007. These diversity indicators have implications for future labor force participation rates and labor force growth, as the graphs and text below will show.

South Central Wisconsin's non-Hispanic white population is somewhat more concentrated in age cohorts historically associated with retirement and the last years of work. Meanwhile, South Central Wisconsin's Hispanic population (which may be of any race) and Wisconsin's non-Hispanic nonwhite populations tend to be more concentrated in age cohorts historically associated with the completion of formal education and the beginning of a career. A very large share of baby boomers are non-Hispanic whites. As baby boomers retire employers will fill those vacancies and other vacancies with younger workers and the workforce will become more diverse.

Many readers will be quick to point out that Dane County's cluster of colleges draws in large numbers of students between the ages of 20 and 24 years old. The data does reflect this clearly. Perhaps more interestingly, Dane County also has somewhat elevated concentrations of 25- to 29-year-olds and 30- to 34-year-olds. Meanwhile, Dane County's population has low concentrations of residents 60 or more years old.

Data for Columbia, Dodge, Jefferson, and Sauk counties was aggregated into one series because these four counties' age distributions were so close that they were almost indistinguishable when graphed. Marquette County, where a retiree might find much more affordable housing and much less traffic, had somewhat low concentrations of residents between the ages of 20 and 44 years old and markedly elevated concentrations of residents between the ages of 55 and 79 years old. Residents in the latter age cohorts are much more likely to be retired or otherwise out of the labor force while residents in the former age cohorts are much more likely to participate in the labor force. These age distributions have implications for future labor force participation rates and labor force growth rates.

 

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Southeast Analysis - Betsy Falk, Economist

Southeastern Wisconsin contains Kenosha, Racine and Walworth counties. The changes in Total Personal Income (TPI) and Per Capita Personal Income (PCPI) show variations between the one and five year time periods, and when compared to Wisconsin and the United States. At 5.9 percent, the one year TPI change is higher than Wisconsin's 4.5 percent increase but less than the United States' 6.7 percent increase. The five year change of 20.7 percent is the same as Wisconsin's but almost 5 percent less than the United States. The one year PCPI changes follow the same pattern as TPI with the Southeast region showing a higher percent increase than the State but lower than the nation as a whole. Over the five year PCPI period, Southeast Wisconsin's rate of change was less than either the state or nation.

Over the past five years, employment in Racine County increased by 5,409. This number has been modified by the decrease of 356 jobs during the past year. Industries most affected by this employment change are manufacturing, professional and education. Manufacturing saw a decrease of 6,211 jobs during the period which resulted in a decrease of 4.5 percent of total employment. Professional & Business Services gained 2,653 new positions while Education and Health Services added 3,378.

Southeast Wisconsin's March 2008 unemployment rate is slightly higher than either the state or the nation. At 6.1 percent, Southeast Wisconsin's rate is .5 percent higher that Wisconsin and .9 percent higher than the United States. All three reporting entities show similar trends with the highest unemployment rate in February and the lowest rate in October.

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West Central Analysis - Scott Hodek, Economist

The federal Bureau of Economic Analysis has recently released 2006 estimates of personal income at the county and metro level, revealing a wealth of information about West Central Wisconsin. Eau Claire County still has the highest total personal income (TPI) in the area, at over three billion dollars - Eau Claire is also the largest population center in West Central. However, St. Croix County is narrowing the gap, at about $2.7 billion in 2006. St. Croix had the fastest growing TPI in the area, with a five year growth rate of 33 percent. Barron and Clark counties saw the slowest growth, at around 14 percent.

Total personal income includes income from three main sources: net earnings; dividends, interest and rent; and transfer receipts. Net earnings make up the vast majority of income, with the remaining percentage divided between the other two components. However, despite this common pattern, the exact distribution can tell us a lot about an area.

Not surprisingly, among the West Central counties, net earnings made up the highest proportion of TPI in St. Croix. Seventy-seven percent of St. Croix's TPI was made up of net earnings, reflecting the higher wages earned by the small army of commuters who cross the border to work in the Twin Cities metro area. Another Minnesota-border county came in second – 73 percent of Pierce County's TPI was composed of net earnings. We can see the effects of the border counties' proximity to the Twin Cities metro in the adjustment for residency, an adjustment to net earnings taken to allocate income to the correct county of residence, rather than the county where the place of work is located. This adjustment made up over 45 percent of St. Croix's net earnings – almost half of St. Croix's total net earnings were made outside the county. Pierce's adjustment was even higher, at over 55 percent! St. Croix also had the fastest growth in net earnings, up 33 percent since 2001. The lowest growth in net earnings was seen in Barron County, a five year growth rate of only 14 percent.

Another useful component to analyze is transfer receipts. Transfer receipts refer to benefits like Social Security, Medicaid, Medicare, unemployment insurance, disability payments, and welfare. About 21 percent of TPI in Clark County is from transfer receipts, the highest in West Central Wisconsin. While a high share of income made up of transfer receipts can indicate an older population, in Clark its share serves more to illustrate how low earnings are in the county, which increases the percentage of total income made up by other sources.

TPI is heavily influenced by an area's population, since more people generally leads to a higher TPI. Dividing TPI by a region's population gives us per capita personal income (PCPI), a measure of income per resident, and a more useful tool for comparing regions. St. Croix County had the highest PCPI in West Central Wisconsin, at $34,319. St. Croix's PCPI ranked 12th highest out of the state's 72 counties, again attesting to the higher wages earned by commuters into the Twin Cities. For comparison, the average PCPI in Wisconsin was $34,405 in 2006, while PCPI in the Twin Cities metropolitan area was $44,237. However, St. Croix did not have the fastest PCPI growth in 2006. Eau Claire's PCPI grew at 5.2 percent, faster than the statewide average of 4.8 percent, and ranking its growth rate at 17th among the state's 72 counties. The lowest PCPI in West Central was found in the very rural Clark County, ranked 66th in the state, at $24,376.

The Eau Claire Metropolitan Statistical Area (MSA), consisting of Eau Claire and Chippewa Counties, had a PCPI of $29,837, lowest of the twelve MSAs primarily located in Wisconsin. Though lower wages play a role in Eau Claire's low PCPI, having the University of Wisconsin-Eau Claire located in the metro also has a major effect on PCPI. Of the students that do work, many only work part-time, often in low paying jobs. But regardless of that fact, they are still included in the total population, used as the denominator in determining in PCPI. This contributes to a lower per capita income, which can be misleading when assessing income in an area. The Eau Claire MSA's PCPI growth rate from 2005 to 2006 was 4.6 percent, ranked seventh out of the state's twelve main MSAs.

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Western Analysis - Bill Brockmiller, Labor Market Analyst

The QCEW (Quarterly Census of Employment and Wages) for 2007 was recently made available to the public. Using quarterly data submitted by state agencies, the Bureau of Labor Statistics summarizes employment and wage data for workers covered by State unemployment insurance (UI) and Unemployment Compensation for Federal Employees (UCFE) to compile the QCEW reports. QCEW captures and reports on the substantial majority of employment in a given geographic area. Employment counts are available by industry group for the State and all Counties. Analysis of this data is very useful in the examination of employment and wage developments; as well as industrial requirements and trends in a given geographic area. In the past, the QCEW has been known as CEW; and it's sometimes known as ES-202 data.

In the graph below one will find the average annual wage in 2007 for the eight counties contained in Western Wisconsin, as well as the statewide average. Buffalo County had the highest average annual wage in Western in 2007; at $36,654 its average annual wage was 96 percent of the statewide total of $38,070. Second highest was Western's only metropolitan county, La Crosse, with an average annual wage of $33,523 – 88 percent of the statewide average. Annual average wages in Crawford of $25,664 were the lowest in the Western region in 2007; Vernon's wages of $26,567 were a close second for lowest annual average wage in Western Wisconsin.

Next, taking a look at the industrial make-up of the eight Western Wisconsin counties, one can find some reasons for the varying average annual wages in the area.

Buffalo County highest annual average wage is clearly maintained by the higher paying jobs in trucking & transportation, a component sector of the trade, transportation & utilities industrial sector. Almost 50 percent of wage and salary jobs in Buffalo County are in the trucking & transportation industry. La Crosse County's second highest average annual wage is, in part, the result of the cornerstone of La Crosse's economic strength; the still booming health care industry.

Crawford County's relative strength in leisure & hospitality, and retail trade (component sector of the trade, transportation & utilities sector) place Crawford lowest of the eight counties in terms of average annual wage. Wages in these sectors are often lower and many of the jobs are part-time or seasonal.

(Note: QCEW estimates are for 2007, the most recent full year available. This QCEW data was released in June of 2008 and this analysis was written in August of 2008.)

 

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