Columnist examines potential impact of Wisconsin’s low wage growth
By Matt Pommer
Will Wisconsin’s low wage growth discourage young people from taking jobs in the Badger State?
A recent report showed Wisconsin ranked 42nd in the United States in wage growth. Some who meet payrolls may think that is good news. Others, fresh with a new college degree or trade, may see the low rating as a warning sign.
Wage growth is but one measuring tool for economic activity – but it might be more of an issue for the young and those starting working careers than for older workers. Employers are bullish on the state’s economic future, but it remains unclear how Wisconsin compares to other states.
That issue was raised when President Obama spoke recently in La Crosse and drew comparisons between Minnesota where Democrat Mark Dayton is governor and Wisconsin where Republican Scott Walker is in the governor’s chair.
Kurt Bauer, president and CEO of Wisconsin Manufacturers and Commerce, the state chamber of commerce, concedes Minnesota has a higher per capita income, a lower unemployment rate and a better educated population. But he suggested in a recent column that Wisconsin needed more time for Walker’s policies to take effect.
The Twin Cities have advantages over Wisconsin, Bauer wrote. Those Minnesota cities did not experience the “Great Migration” of some six million African Americans from the South who were recruited to factories in manufacturing centers of the Northeast and Midwest, particularly during the World War II era. “Milwaukee was (a destination for those workers), as were Beloit and Racine.” That wave of workers between the 1910s and 1970s subsequently created neighborhoods disproportionately impacted by the later loss of manufacturing jobs to Asia, according to Bauer.
That left “a legacy of poverty and crime absent in Minnesota,” he wrote. Milwaukee also has a competition problem with Chicago and the Twin Cities.
Milwaukee “is geographically caught between a rock and a hard place. The rock is Chicago and the hard place is Minneapolis-St. Paul, both of which are major draws for coveted young professionals,” Bauer wrote.
Recent state policy decisions might be factors affecting a broad array of Wisconsin’s young people. The Republican-controlled state government adopted a right-to-work law barring future labor contracts that require union membership of the workers. The right-to-work law is seen as a way to limit the size of any future wage increases.
Wisconsin’s minimum wage law remains unchanged. While an increase in the minimum wage would largely impact entry-level wages, some suggest that it would eventually force employers to raise wage levels for lower managerial rungs.
The Legislature also enacted Gov. Walker’s proposed changes in tenure on University of Wisconsin System campuses. The budget bill language gives the Board of Regents the power to lay off or dismiss staff based on budgetary changes.
At other major universities, tenured faculty can be laid off due to financial emergencies or changes in educational programming. Madison Chancellor Rebecca Blank, who sought a veto of the language, said Wisconsin’s recent changes would hurt the ability to recruit and keep top educators and researchers in the national market for intellectual talent. These are the people who attract millions of dollars in federal aid and private grants, as well as draw students who want to attend a particular campus because of particular programs or academic expertise.
Wisconsin also has changed the so-called “prevailing wage rate” which determined hourly pay rates for large public-sector construction projects. That could lower both the cost of the projects and the amount earned by the construction trades.
In 2011, Wisconsin gutted most provisions of public employee labor law, Walker has bragged in campaign stops in Iowa that it’s now easier to fire teachers in Wisconsin. Teaching opportunities may increasingly end up in private schools. The new state budget provides more taxpayer money for private voucher schools with lower pay schedules.
Bauer wrote “business optimism is sky-high” in Wisconsin. Yet young people may focus more on wages than the employers’ enthusiasm for the GOP policies.
Known as the dean of State Capitol reporters, Pommer writes this column for the Wisconsin Newspaper Association.