Measuring Republican Rhetoric

The latest election results inspired my analytical side to start digging up the facts surrounding: the labor force; government size, employment and expenditures; work travel times; demographics; various sectoral information; population; and establishment growth. I thought now would be a good time to look at what actually took place in the economy over the last decade. From here, we will be able to judge the Wisconsin Republicans on how well they have kept their promises while also seeing whether or not they have improved the quality of life for Wisconsinites.

I have collected the data from the Census Bureau. The data ranges from 1999 to 2009. Comparisons will be made between the state and the nation, and between the state of Wisconsin and Milwaukee County. In the sectoral analysis section I have devised my own metrics from available data (sales receipts; employees; establishments; payroll) to create indicators of labor cost, size and productivity. Calculations and any errors are my own.

The population of the state of Wisconsin grew 4.9% between 2000 and 2008. Milwaukee County population only grew 1.4%. The U.S. saw a population increase of 9.1 percent.

Median family income, between 1999 and 2008, declined 4.6% in the state; the county saw a 26% decline. Combine this with inflation (which grew 26% over the period) and workers took a heavy hit in their earnings and real purchasing power. (Hence the huge increase in household debt to maintain our quality of life.) The U.S. saw the median family income decline 2.3% over the period.

The poverty rate in the U.S. increased from 11.3% to 13.2% (a 16.8% increase). In Wisconsin poverty rose from 8.1% to 10.5% (a 29.6% increase). For Milwaukee County poverty increased from 14% to 17% (a 21.4% increase). Yet more evidence that tax cuts and deregulation were not lifting all boats.

The civilian labor force in the state of Wisconsin increased 2.9%. The county saw a 1.9% decrease in their civilian labor force. Economists have estimated that we need to add 300,000 jobs per month, nationally, just to get back to full employment within the next 5 years.

Non-farm establishments improved 4.2% in the state, while decreasing 1.9% for the county. Which is typical of sprawling development - building in low-density areas. This type of development is costing us. We are continually maintaining (or not) an expanding electrical, sewer, and road network to serve an expanding development footprint.

Employment amongst all industries in the state saw a yearly increase of .8 percent between 2001 and 2006. The county saw a .2 percent yearly decline in employment amongst all industries. Again, reflecting the sprawling development at the urban fringe.

Work travel time, between 2000 and 2008, decreased .8 percent in the U.S. But it actually increased 2.4% in Wisconsin. The country's travel time to work was declining, while, here in Wisconsin, it was increasing. Does anyone doubt this has something to do with our poor public transportation system and our lack of a rail service?

The white population of the U.S. increased by 1.1%, while decreasing by 1.5% in Wisconsin. The black population increased 3.5% in Wisconsin, while remaining steady nationally. Hispanics increased 20.8% in the U.S., and 36.1% in Wisconsin.

Wisconsin government employment, between 2000 and 2009, declined 10.6%. Full-time pay amongst government employees increased 20.5% over this period, a 2.1 percent yearly change. Inflation over this period had a yearly growth of 2.6%. After the decade there was a smaller number of government workers and they were earning less (inflation adjusted).

The five largest sectors of Wisconsin (based on sales and receipts) were: manufacturing, wholesale trade, retail trade, health care and social assistance, and construction.

Payroll as a percent of sales (labor cost) was greatest for health care, at 41.6%. The other four sectors were lower than 21 percent. The next highest was construction with 20.8%. The lowest was wholesale trade at 6.1%.

The largest number of employees per establishment (size) was among manufacturing, at 50.5 workers per establishment. The next highest was health care at 25.6. The lowest was construction at 8.6.

The sales amount per employee (productivity) was largest in the wholesale trade sector, at $798.69. Manufacturing was second with $335.46. The lowest was health care at $91.64.

This gives of us an idea of the important sectors of Wisconsin's economy. It also allows some benchmarking to gauge where we're at, to see what type of change takes place during the Walker administration and Republican leadership. Although it should also be noted we're in a deep recession, so the only place to go is up. If conservative claims are to be proven credible we should expect to see a turn-around higher than during a typical recovery. And, if tax cuts were the answer, Bush did that repeatedly over the last decade and all we've experienced are terrible job growth and stagnating wages. We'll see what happens.

For Further Reading:
Fiscal Health of Wisconsin Counties
Macro Performance Under Different Presidents
Productivity Growth Since 1982
Recovery, Risk, and Rebalancing
State of Working Wisconsin
Trade Analysis of Wisconsin Counties
Wisconsin Tax Hell Hoax

Unnecessary Economic Complications

You've got to love economic theories. Cute perfect-world scenarios wrapped up nicely in elegant algorithms. The problem is much of the assumptions are pure drivel.

I've always found that historical trend analysis seems to offer the most insight into where we've been and how to handle challenges presently and in the future. History is a wonderful guide in locating the norm (mean reversion) of whatever it is we're measuring. By just looking at how inflated the price-to-income and price-to-rent ratios had become towards the late 1990s, a few of our better economists were able to call the housing bubble back in 2002. They didn't have to dress-up the obvious in fancy mathematical models to show what was plain as day.

One particular Homo Economicus assumption I've seen popping up lately is the idea that people are averse to working more if they know it will lead them into a higher tax bracket. Of course this argument was brought out by conservatives as a warning against President Obama's plan to raise taxes on the wealthiest amongst us. [By the way, during our most robust period of growth from the late 40s to the late 60s our highest marginal tax rate varied from 90 to 70 percent.] It may be true that higher taxes lead millionaires to find more and more clever ways to avoid taxation, but regardless of the amount they are making, they always seem to be trying to avoid taxes. And, let's face it, can we really say many of these people are "working" that hard? Avoiding taxation isn't the same as doing less. This has more to do with profit and greed than some efficient decision about taxes and time worked.

This is especially true for the 85 percent of the population earning under $100,000. Most people work as much as they can for as long as they can. Which is why even though our productivity per hour has increased, so has our number of hours worked.

But I guess when our economic system is constructed toward rewarding the Haves every example displayed and the indicators used to explain what's going on will no doubt be more geared to their wealth -- the S&P, the Dow, Russell, Nasdaq, Goldman, etc. These have become the markers we all watch and live by. Yet the wealthiest control nearly all of the stock market. This misdirection is comparable to tracking sales at Neiman Marcus as a guide for the shopping patterns of average Americans.

The Bush Years

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