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Wisconsin?s aging workforce

In February, the state economic development community gathers in Madison for its annual Governor’s Conference.

This year’s conference focused on workforce development, but there were a wide variety of topics covered.

Professor Morris Davis, academic director of the James A. Graaskamp Center for Real Estate at the University of Wisconsin-Madison’s Wisconsin School of Business, began the conference with a presentation titled, “Housing, Economics and People in the U.S. and Wisconsin”.

According to his economic models, housing starts will increase significantly over the next two years, and create between 1,500 to 4,000 new construction jobs, just in Wisconsin alone.

Davis also said Wisconsin’s unemployment rate will decrease to 5.8 percent by the end of 2014.

However, while this would appear to be very positive news, the lower rate is a result of the bad news he presented next.

Davis offered extensive data showing that the labor participation rate will be the chief reason why the unemployment rates will continue to drop in the U.S. When you combine that prediction with Wisconsin’s aging population and its 0 to 0.5 percent population growth rate for 2014, Davis believes that economic growth will be very difficult for Wisconsin and many other states.

The simple solution is in-migration of people to our state. The tough part of that is Wisconsin loses people to other states, particularly its college graduates between the ages of 21-44.

Wisconsin lost almost 11,000 people between the years 2008-2012. We lost approximately 14,000 college graduates, while gaining 2,700 people with high school diplomas or less, and 300 people with some college training.

Minnesota lost 5,600 people during that period of time. However, they gained 3,000 people with college degrees, while losing 3,400 people with high school diplomas or less, and 5,200 people with some college training.

Michigan lost 85,700 people over those five years. They lost people in every category: 46,100 people with college degrees, 22,200 people with high school diplomas or less, and 17,400 people with some college training.

The big winner during those five years was Texas. They imported 173,000 people, with 69,300 college graduates, 69,600 people with high school diplomas or less, and 39,100 people with some college training.

Davis did offer some suggestions to solve the impending crisis. The obvious ones were to recruit people with college degrees between the ages of 21-39. They are the people who are most likely to move. They are also the group that has the most significant, positive effect on a state’s retirement system. Wisconsin is losing this group of people to other states like Texas and Minnesota.

Davis suggested the state put together a committee to study the issue and make recommendations on how we can retain our college graduates and attract others.

He also offered one suggestion of his own. He believes that the education offered by the University of Wisconsin-Madison is comparable to any top tier college, like Harvard or Yale. However, the prices for out-of-state tuition are not comparable. He suggests a two-tiered system for in-state and out-of-state tuition at UW-Madison. He then believes we could offer an incentive system with some of the additional revenue used to keep graduates in the state.

Another informative program, “People, We’ll Need People,” was presented by Todd Berry, president of the Wisconsin Taxpayers Alliance.

Berry started by identifying what makes an economy grow, create jobs and generate wealth. One key factor is people. You need more working age people than retirement age people. And you need more skilled workers than unskilled ones.

Dr. Berry then pointed out that Wisconsin’s K-12 public school enrollment has been flat over the past 22 years, with the implication that there will not be an increase in the number of working-age adults entering the workforce anytime soon. In fact, during the decade of 2030-2040, there will be 1.16 births for every death in Wisconsin, essentially only replacing ourselves at that point.

Next, Berry broke down, by age group, state population growth projections over the next 30 years (2010-2040).

In the 0-24 group, a 3 percent increase is projected over that period of time. In the important working age group of 25-64, there will be a 0.3 percent decrease, and in the retirement age group of 65 and older, there was a 97.5 percent increase.

Of course, not all areas of Wisconsin are the same. Berry provided the projections broken down by county for the 25-64 age group. Unfortunately, Waupaca County is in the group of counties that are projected to decline between 5 percent and 10 percent for this category.

There will be no easy button to push in order to resolve these problems. It will take cooperative efforts by the private and public sectors to affect the best solutions.

One of the presentations I did not highlight mentioned that place will be the key. As the ability to work anywhere increases, the desired population of educated young workers will have the option of living wherever they choose.

What can we do as communities in Waupaca County to make our place one of the desirable ones? I don’t know the answer to this, but I do know that we need to spend time and energy trying to figure that out.

David Thiel is executive director of the Waupaca County Economic Development Corp.

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