A few weeks ago, the Wisconsin Department of Revenue released the fall edition of its quarterly Economic Outlook, a report produced by staff economists at the department who forecast the ups and downs of Wisconsin employment. This is a topic of prime importance these days, but the state's news media do not always cover the report.
It's well respected, however, by Wisconsin economists. "It's some of the best guessing out there," says Laura Dresser, associate director of the Center on Wisconsin Strategy, a think tank at UW-Madison that does its own employment forecasting.
Each quarter, the DOR economists predict when the state will recover from the recession. Early 2015 is the latest prediction from the fall report. That's when the number of jobs in the state is projected to return to 2.9 million, the number Wisconsin peaked at in 2008.
But it's not that clean. "Meanwhile, population should grow," the report adds, at about half a percent each year. "This means that by 2015, there will be 200,000 more people living in the state but the same number of jobs as early 2008."
So does this mean there will be enough jobs to account for this swell in population?
The report doesn't say, and DOR did not respond to requests for comment. So Isthmus asked the Center on Wisconsin Strategy (COWS).
The group had noted in an ominous November 2010 report that, barring an acceleration in the jobs recovery rate, the state "may never have the jobs to catch up to the growth of its labor force."
Since then, the second half of 2011, like the second half of 2010, proved particularly disappointing for anyone expecting a prompt recovery. The state suffered a net loss of about 27,600 jobs between June and October, according to state Department of Workforce Development figures.
And earlier this month, when COWS ran the numbers assuming the rate of recovery from the first nine months of this year, the lines of recovery and pre-recession employment - a jobs figure adjusted for population growth, unlike the one in the DOR report - never crossed.
"We're producing barely enough jobs to keep up with population growth," says Dresser. "And the last six months were so horrible, we didn't even keep up with population growth." So, according to these estimates from COWS, there will be no jobs at all for the forgotten 200,000.
The COWS projections raise the specter of the "new normal," where employment will never return to a pre-recession level. Tim Smeeding, director of the Institute for Research on Poverty at UW-Madison, is not someone to brush aside these fears. We are headed, he says, "to less net employment in this country."
Smeeding distinguishes between "cyclical" jobs, those lost in the recession that will eventually come back, and others that won't. "These are jobs that were decreasing in the pre-recession period, and the recession made them go down even faster," he says. "Our employment in manufacturing in this country has been dropping since 1970. We don't live in the Mercury outboard motor world, the Chevy SUV world or the Harley-Davidson world anymore. We live in an Epic world."
"Epic" is, of course, Verona's successful medical software company, which has continued to add to its workforce despite the parched economy. The way forward may be technology and specialized manufacturing, Smeeding says. "If you don't have a post-secondary degree, you're in big trouble."
In naming perpetually depressed employment sectors, he also points to construction, which, after the housing bubble burst, has continued to fall. It's a sector unlikely to return to a pre-recession level, he says. "Forget about it. We're not building houses anymore. We have too many already."
Public employment is also expected to languish in the coming years. Overall, the sector declined in 2009, 2010 and 2011, and the Department of Revenue projects that it will again in 2012. Public jobs will be flat in 2013, according to the report, before increasing less than one percent in 2014.
Jack Huddleston, a professor of urban and regional planning at the UW, says the last state budget "cut local aids by about a billion dollars. That translates immediately" to employment losses in local government. He's skeptical of projections that these jobs will take another hit in 2012. "I don't see the bleeding continuing," he says.
But Andrew Reschovsky, an economist and professor of public affairs at UW-Madison, predicts that the bleeding will accelerate. "The pressure on local government is going to grow," he says. Stuck in the vise, alongside the state's municipalities, are the state's schools, where teachers have gotten the ax. "You don't make these kinds of cuts without having employment effects," he says.
Reschovsky, like COWS' Dresser, sees job growth as coming slowly: "We are experiencing an anemic recovery with very slow job growth. Until and unless the economy accelerates, we will never catch up."
Dresser's prescription for recovering jobs would be to order up an influx of federal spending in avenues with good "multiplier" effects so "money runs through the economy well and keeps people employed." Such avenues include food stamp and unemployment benefits - both would help the needy and ensure spending by recipients - and infrastructure. "What the economy needs is real stimulus and real attention from the federal government," she says.
Reschovsky agrees that these moves, at least in the short-term, would help the economy grow at a faster rate. "Austerity is not very productive," he says. But in the long-term, he adds, "We have a debt problem we can't put off forever."
There's a maxim that recessions have two parts: one good and one bad. In the former, savings have not yet run dry, the unemployed go back to school and the situation is not so bleak. In the latter, when a recession or "jobless recovery" grinds on, the bad only gets worse.
The Second Harvest Foodbank of Southern Wisconsin, which supplies food pantries in the area (there are 54 in Dane County) as well as shelters, faces unprecedented demand. "Our goal this year is to increase food [supplies] by 16%," says CEO Dan Stein. Pantries in the Foodbank's territory, 16 counties in Southwestern Wisconsin, are serving more people than ever.
"We've had to find new sources of food," says Stein. This year, the Foodbank piloted a partnership with commercial farmers, who planted acres specifically for Second Harvest. Now they have to figure out how to preserve tons of raw produce.
"Our clients are facing a really tough economic situation," says Stein.
And more than half of them, it turns out, already have jobs. For these individuals, accelerated job creation might not even make a difference.
