Yet Another Look at Wisconsin's Job Performance

Professor Menzie Chinn at Econbrowser summarized the Walker jobs record in one nifty graph:

actual and projected job growth

Figure 1: Private nonfarm payroll employment for Wisconsin, seasonally adjusted (blue), July 2013 Wisconsin Economic Outlook forecast, interpolated from annual data using quadratic match (red), and Walker's promised path for private NFP (black). September and October private NFP from WI DWD. NBER defined recession dates shaded gray. Source: BLS and DWD, Wisconsin Economic Outlook, and author's calculations.


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Lots of Nothing to Cheer About

risingUnemployment.jpgAlthough Wisconsin's unemployment rate has fallen (to 6.5%), part of the decline seems to be the result of a shrinking labor pool. And the number of new unemployment claims, as reported by the US Department of Labor for the week of December 7, 2013, was the highest in the nation!

The Cap Times reported an official explanation: "Officials with the state Department of Workforce Development explain that Wisconsin historically sees a seasonal increase in unemployment claims around Thanksgiving -- in part because of deer hunting...." But of course other states also have deer hunting seasons, rendering the "explanation" curious at best. Perhaps even downright ridiculous.

But the increase in new unemployment claims was not the only unhappy outcome of Governor Walker's policies. His decision to refuse to expand Medicaid under the terms of the Affordable Care Act is going to cost Wisconsin taxpayers a bundle. The Milwaukee Journal Sentinel finds that Iowa's path is quite similar in many ways to the path Wisconsin is taking, except that Iowa's strategy is going to cost its citizens "a fraction" of what Wisconsin's strategy will be costing us.

Here are the key paragraphs in the Journal Sentinel story:

The broad structure of Iowa's plan — such as relying more on private health plans and less on the traditional Medicaid program — is similar to the approach developed by Walker and approved by the Legislature to increase the number of people with health insurance.

But in Iowa, the federal government is paying the full cost for the first three years of expanding its Medicaid program to cover all adults. The federal share will eventually decline to 90% of the cost.

In contrast, Wisconsin is paying 40%, and the federal government paying the other 60%.

The difference could work out to several hundred million dollars in additional spending for Wisconsin taxpayers over the next decade.

And the explanation for the decision to forgo hundreds of millions of dollars in federal funds?
The Walker administration and Republican state legislators contend that the federal dollars allocated through the Affordable Care Act will be reduced in future years, potentially saddling states with a larger share of the cost of expanding their Medicaid programs.
So Wisconsin citizens are paying federal income taxes and medicare taxes, but these revenues are all flowing to other states because the Republicans in our state are afraid that at some point in the future, federal support for the program might be reduced.
Meanwhile, the "solution" Wisconsin adopted means that "Walker's plan still relies on the federal government paying 60% of the cost of expanding the Medicaid program, and whether that money will be available long-term is not guaranteed, either."
It's hard to understand why anyone would think four more years of this sort of logic would be a good thing.
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A Tale of Two States: Progressive Policies Win

24BORDERS-articleLarge.jpgStarting with the similarities in their histories, Lawrence Jacobs, professor of political science at the Humphrey School of Public Affairs at the University of Minnesota, writing in the New York Times, analyzes two extremes and demonstrates how the Progressives in Minnesota have brought growth and security while Wisconsin's Republican majority has failed to make any improvements in the business climate and job growth.

The piece points out that these neighboring states both elected new governors in 2010 and also gave each governor's party a strong majority in his respective legislature. Since then their economic fates have diverged. Minnesota pursued a range of progressive policies, including a highly progressive tax increase to fund essential services and infrastructure, while Wisconsin followed the hard-right playbook by cutting taxes for the wealthiest and for businesses.

As professor Jacobs writes, the election of these opposing governors and legislators "began a natural experiment that compares the agendas of modern progressivism and the new right." Here's the gist of his analysis:

Which side of the experiment — the new right or modern progressivism — has been most effective in increasing jobs and improving business opportunities, not to mention living conditions?

Obviously, firm answers will require more time and more data, but the first round of evidence gives the edge to Minnesota’s model of increased services, higher costs (mostly for the affluent) and reduced payments to entrenched interests like the insurers who cover the Medicaid population.

Three years into Mr. Walker’s term, Wisconsin lags behind Minnesota in job creation and economic growth. As a candidate, Mr. Walker promised to produce 250,000 private-sector jobs in his first term, but a year before the next election that number is less than 90,000.

Jacobs' insights have been picked up in a number of national media outlets like MSNBC, Minnpost, DailyKos, and others.

As it happens, this tale is repeated with another set of comparisons: between California and Wisconsin. And the results are similar. Professor Chinn, Professor of Public Affairs and Economics at the University of Wisconsin, Madison, posted a piece on the Econbrowser blog in September in which he "compared economic outcomes in two states that implemented contrasting fiscal policies: California, which surged ahead while raising taxes and cutting spending, and Wisconsin, which lagged far behind as it slashed spending on education, and cut taxes. Latest estimates of current economic activity, and forecasted economic activity six months out, indicate continued lagging performance for Wisconsin."

No matter how you slice it, progressive economic policies promote growth; regressive ones don't.


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Fast Food Workers Strike: Citizen Action Podcast


2aj6m87.jpgThis week Citizen Action records from the fast food and retail workers strike headquarters in Milwaukee. Along with the strike, they talk about Gov. Walker’s disgraceful plan to make 83,000 people in poverty wait 3 months for healthcare because he refuses to accept billions in federal money for BadgerCare. They also discuss redistricting, new GOP efforts to pass a Constitutional Amendment requiring a super majority to increase taxes in Wisconsin, and state Supreme Court “F” grade on ethics.

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Wrong Turns in the Fight to End Discrimination, Poverty, and Protection for Women's Health

Bill Further Erodes Our Minimum Wage Protections

In the 2009-2010 session, the Legislature passed bipartisan legislation that would give community members the option to petition to end the use of of race-based mascots at local schools in their area. Of the 65 schools that had Native American related mascots in 1989, 30 schools changed their nickname prior to the 2010 law while 32 schools still have Indian mascots. Despite only four schools having been affected by this bill--three changed their names and one is challenging the change request in court--legislative Republicans have felt compelled to overturn the law designed to diminish discrimination.

This past Tuesday, the Wisconsin State Senate took up this legislation, Assembly Bill 297, which will send Wisconsin backwards in the fight to end discrimination of all kinds, including towards Native Americans across the state. This bill eliminates the current process allowing people to file complaints with the Department of Public Instruction (DPI) over race-based mascots and team names, and giving DPI the authority needed to enforce mascot changes at these schools. I was disappointed to see that so many of my Republican colleagues refused to even participate in the debate on this offensive bill.

Click here to view a copy of Senate Bill 320.

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What Will Health Insurance Cost Me?

subsidycalculator_blue1.pngOn November 5, 2013, the Kaiser Family Foundation published State-by-State Estimates of the Number of People Eligible for Premium Tax Credits Under the Affordable Care ActThe study finds that Wisconsin has approximately 301,000 residents who are likely to be eligible for tax credits to help pay for the premiums. The study also estimates that the potential market size is 482,000. 

The website also offers a simple calculator that can provide people an estimate of their premiums and tax credits to help pay for the insurance, based on their state, zip code, and income. For example, a 40 year old adult who has no children, who lives in Milwaukee, and earns $25,000 a year would be able to buy a "silver" plan for $3781 per year. But that's not what the plan will cost her. She will be eligible for tax credits totaling $2052. So her final cost for that tier of coverage will be $1729 or about $150 a month.

If she opts for a "bronze" tier plan, her out of pocket cost for health insurance will be about $873 per year, or just under $73 per month.

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Tell Us What You Envision

Take our Survey

So that we can better meet your needs, utilize your talents and organize to return Wisconsin to its progressive roots, please take our brief, 10-item survey.

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