Wisconsin lawmaker: We (heart) Minnesota business?

Posted at 1:15 PM on February 5, 2013 by Paul Tosto (4 Comments)
Filed under: Mark Dayton, State Government

In the past couple weeks, I've written two posts detailing how Minnesota's economy has outperformed Wisconsin -- from the Great Recession through today.

The last post, I titled: "Hey Wisconsin, what happened?"

Today, though, Wisconsin Rep. Erik Severon, R-Osceola, sent out an "open letter" to Minnesota businesses encouraging them to relocate to Wisconsin in response to Gov. Dayton's tax and budget proposals.

Severson writes:

In the last two years Wisconsin has turned around, becoming a haven for private sector job growth. It was done by controlling government spending and holding the line on taxes. I urge you to consider moving your business to a state that values job creators and won't impose arbitrary taxes that hinder economic expansion.

I'll leave the budget and tax debate to others. The data, however, show that through the recession and even in the past two years, Wisconsin falls short of Minnesota and the country when it comes to job growth and other key economic indicators.

Here's a chart showing nonfarm employment in the U.S., Minnesota and Wisconsin, plotted on a common index. It shows Wisconsin's job growth lagging the U.S. and Minnesota, including during the past two years.

My point: No matter what you think of the budget and tax policies of the two states, the bedrock economic data show Minnesota has outperformed Wisconsin since 2000 and has accelerated its recovery the past two years while Wisconsin's recovery has stumbled.

It'd be great to get into a larger discussion about the two economies. If anyone has data showing Wisconsin's economic superiority, send it to me and we'll put it out for the larger discussion.

Until then, let's put aside the notion that Wisconsin is eating Minnesota's economic lunch.

Yes, it's possible Gov. Dayton's tax and budget policies will send businesses running away. But the past two years of Wisconsin tax and budget policies haven't produced any economic Renaissance.

UPDATE: The data above include government and non-government jobs. So do the trends hold if we're only talking private sector? Yes.

The Quarterly Census of Employment and Wages breaks out private sector employment. Here are data for Wisconsin and Minnesota.

The numbers show Wisconsin down 55,421 private sector jobs from Dec '07 to June '12 (preliminary data), while Minnesota is down 7,056. From December 2010 (Just before political administrations changed) to June 2012, Wisconsin grew by 86,492 jobs while Minnesota rose by 117,802 jobs.

Again, the 2012 data is preliminary. But if you break out just private sector job growth, Minnesota is still stronger than Wisconsin. You find all the data here.

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Comments (4)

Your post says that Wisconsin is promoting the state for private job growth.

Does your chart reflect JUST private job growth or does it include private job growth AND government job growth?

I can't tell from your text or your legend.

If your chart includes government job growth AND private job growth, it has some meaning, it just doesn't have much meaning as it relates to your blog post.

If the chart includes government jobs; I wonder if the chart will look differently if you only use private job growth numbers?

Posted by Joel DeRider | February 5, 2013 2:22 PM

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The information comes from the Federal Reserve of St. Louis Economic Research. If you go to the website you can create excel applications that can provide a variety of different analytical data. When I looked I could not see that the information differentiated between private and public employment numbers. However, that is not saying that it can't be done

Posted by Troy | February 5, 2013 4:28 PM

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I suspect that what Joel DeRider is getting as is that the dismal numbers from Wisconsin don't necessarily mean that its economy is worse than Minnesota.

After all, WI's governor has done a marvelous job increasing the number of unemployed government workers. Perhaps Wisconsin has so successfully starved the beast that its private sector numbers are much better than MN and the total figure is being weighed down by the large public sector losses.

Actually, if you google "wisconsin private sector job losses", the first hit is a story from the Christian Science Monitor indicating that from March 2011 to March 2012, Wisconsin lost more private sector jobs than any other state in the nation (Mississippi was the only other state to report private sector job losses during this time period). I'm not sure where Minnesota ranks on this list, but it apparently didn't lose private sector jobs.

At the time the article was written (a little over 1/4 of the way through his term), Walker was about 241,000 private sector jobs short of reaching his first term goal of adding 250,000 private sector jobs.

According to http://www.governing.com/blogs/by-the-numbers/public-private-sector-cuts-during-recession-by-state.html between January 2008 and April 2012,
MN had lost 62,900 and WI had lost 141,300 private sector jobs.

Seems kind of silly to herald a strong economy for private business in WI that doesn't actually exist.

Posted by B Joe | February 5, 2013 5:41 PM

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Responding to reader comments, I added some additional info to the post. Bottom line: If you break out just private sector job growth, Minnesota is still stronger than Wisconsin.

Posted by Paul / MPR News | February 6, 2013 9:05 AM

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