Scott Walker – Reality and Myth

The reality is, “Wisconsin is Back”, thanks to this man

and in spite of this man.  Walker

Governor Scott Walker’s attempts to take credit for Wisconsin’s employment resurgence run counter to facts. During Walker’s three years in office, Wisconsin’s annual private job creation is 62 percent of the national average. This compares to Wisconsin’s private job creation rate of 101  percent of the US  average during this man’s 

eight year term as Wisconsin governor.

The myth

Walker distorts his job creation record three ways. First, he uses the Department of Labor’s Current Economic Survey that rates Wisconsin third best in the Midwest in job creation. The problem is, the Current Economic Survey (CES) is  a preliminary report derived from interviewing 3.5 percent of the nation’s employers and is so inaccurate it is unusable. The Gold Standard for measuring private job creation is the Quarterly Census of Employment and Wages (QCEW). This includes actual payroll data from over 95 percent of US employers and is the source of the data showing Wisconsin creating jobs at 62 percent of the national average during Walker’s term.

Walker is using CES data for the months he is claiming major private job creation in Wisconsin. Unfortunately, because it takes longer to compile the more accurate Quarterly Census of Employment and Wage data, there is no QCEW data available for these months. However, we can compare the two data sets for recent months we have information on both.

Figure 1 illustrates the problems using the CES for measuring job creation. For each month, the percent change in private employment in Wisconsin from the previous year is measured using CES and QCEW data.  Then, the percent change in the number of jobs created in the CES data is divided by the number from the QCEW for the same month. When the two data sets match, the graph’s dots are on the 100 percent line. This only happens by accident.

Figure 1image001

Source: US Department of Labor Wisconsin and US Current Employment Survey and Quarterly Census of Employment and Wages; January 2012 – March 2014.

During Walker’s term, annual increases in private job creation average 1.4 percent. However, the CES data is high or low by as much as 30 percent in given months. Trying to measure such small changes with a measurement tool that is so inaccurate is a waste of time.

The second way Walker distorts his job creation record is touting the drop in unemployment in Wisconsin from 7.4 percent at the start of his term to the current 5.8 percent. Unemployment has dropped. However, the unemployment rate’s accuracy becomes increasingly suspect as more people simply give up looking for work.  This inaccuracy is amplified in Wisconsin where the private job creation rate is only 62 percent of the national rate over the past three years.

Governor Walker’s greatest success

While Walker’s failings are too numerous to list here, he has succeeded in convincing a majority of Wisconsin’s voters that Governor Jim Doyle (and by extension Mary Burke) caused the Great Recession of 2009.

Common sense (and the facts) point to lax banking regulations and President George W. Bush’s fiscal irresponsibility as the real causes. Yet,  Walker manages to pin the blame for the bottom falling out of the economy and the subsequent drop in Wisconsin employment and plunging tax revenues on Doyle.

This leads to Walker’s third method of distorting his job creation record. He compares the number of jobs created at the start of his term in office  in the depths of the Bush Recession to where we are now during the Obama Recovery. This comparison has no relevance whatsoever. What it is actually measuring is the impact of the Obama recovery tempered by the fact that during Walker’s term, Wisconsin’s job growth is only 62 percent of the national average.

The apples to apples comparisons of Wisconsin and national job creation rates using QCEW data during Doyle and Walker’s terms are important. They give an unbiased and accurate measurement. Unfortunately for Walker, they illustrate his job creation failures compared to the Doyle administration’s relative success.

Summing up

One of the most interesting aspects of Walker’s term is the undying loyalty of his core constituency; white males over 50 years old, without college degrees and making less than $100,000 annually. Politicians typically go out of their way rewarding core voters. This isn’t the case in Wisconsin. Walker’s ballyhooed tax cuts are skewed towards higher income people, so this group has gotten little of nothing during Walker’s governorship. And, the data clearly shows they haven’t gotten new job opportunities.

Walker maintains almost universal loyalty from these voters in a different way; by making life miserable for educators and the poor, the two groups in the economic pecking order just above and below his core constituency. This isn’t zero sum economics, it is negative economics. Unfortunately, it is Scott Walker’s legacy.

 


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