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Wisconsin’s economy ranks among best in country

WEDC Summit highlights strengths, weaknesses of the Badger State’s economy

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November 2, 2023

APPLETON – The Wisconsin economy is in good hands – thanks in large part to a strong female workforce.

That’s according to John Koskinen, chief economist with the Wisconsin Department of Revenue.

“Of course, many other states have a strong women workforce, but in comparison to others, Wisconsin is well above the national average,” he said. “When I pointed this out to my wife, she said, ‘you’re just figuring this out now?’”

During the Wisconsin Economic Development Corporation (WEDC) Summit in Appleton held last month, Koskinen said overall Wisconsin ranks ninth in the nation for married women in the workforce.

“It gives us a huge advantage over other states,” he said.

According to its website, WEDC’s mission is to advance and maximize opportunities in Wisconsin for businesses, communities and people to thrive in a globally competitive environment.

To accomplish this, the organization works with more than 600 statewide partners, including regional economic development organizations, academic institutions and industry groups.

Breaking down the positives
Wisconsin, Koskinen said, is good at several things, which help make its economy strong.

“Wisconsin builds things, grows things, takes care of people, moves things (trucking) and we have good health care,” he said.

Koskinen said another big factor that contributes to a strong Wisconsin economy is “residents prefer to work.”

“From people aged 25-54, we have more than 85% of our population engaged in work,” he said. “If we look at the product of people working, we have a fairly good-sized edge over the rest of the country regarding median income. If you adjust for the cost of living, it rocks – we have a 10% edge.”

Koskinen said if people work and have a good income, those numbers also reflect lower poverty rates.

“From 2021 data, we had the third-lowest poverty rate in the country – that also includes poverty among kids,” he said. “We are now second lowest with the updated numbers.”

Perhaps one of the most surprising statistics, Koskinen said, is Wisconsin teens and young adults also want to work.

“Compared to the rest of the country, we are way ahead in terms of labor force participation rates in younger people,” he said. “The gap between us and the State of California in those two categories is more than 20%. I recently did a presentation in Eau Claire and did the Wisconsin thing – then I went to Culvers – everybody behind the counter seemed to fit into that (young age category).”

Now the bad
Koskinen said with the good comes the bad – though he said he doesn’t like to dwell on it too much.

“But there are things we have to address and keep in our minds so we can be aware of them in the future,” he said.

Among the negatives, Koskinen said, is Wisconsin’s stagnant population when you look at the difference between births and deaths – a rate that he said will contribute to potential worker shortages in years to come, especially in certain industries.

“We are among some of the states which have a declining natural rate of increase,” he said. “To figure out the natural rate of increase, you take births and subtract deaths – if you have more deaths, you have a shrinking population. Our natural rate of increase for people who are here has been negative for the past few years.”

Another summit speaker, Amy Pechacek, Wisconsin Department of Workforce Development secretary, said one sector in need of workers in the next dozen years is health care.

“By 2035, it’s estimated we’ll need 20,000 additional healthcare workers to take care of our aging population,” she said.

Koskinen said the state doesn’t have much of a mining presence either.

“To the best of my knowledge, no oil refining platforms are operating in Wisconsin,” he said.

Though the state’s natural rate increase is declining, Koskinen said Wisconsin’s population is seeing an increase – thanks in part to folks moving here.

“The reason for that is Wisconsin’s in-migration (the process of people moving into a new area in their country to live there permanently),” he said. “More people are still moving into the state than out. You get stronger in-migration when you have opportunities. Our education system is strong, and we continue to outperform the rest of the nation in eighth-grade reading and mathematics scores.”

Koskinen said another negative that Wisconsinites can’t directly control is the weather.

“The weather can always set us up for economic declines,” he said. “In 2022, we didn’t have as severe drought conditions as we did this year (as of September). Farming is a swing sector for Wisconsin’s economic performance. Farm income fell off badly in the second quarter of this year – it was the worst we had in 20 years.”

Finally, Koskinen said access to affordable childcare services also affects Wisconsin’s economy. 

“A study for The Wisconsin Economic Development Institute was (recently) conducted, and it showed Wisconsin businesses and employers perceive that a lack of affordable childcare in the state is negatively impacting the state economy and their businesses,” he said. “Approximately four out of five Wisconsin employers say the state economy is impacted by parent’s access to affordable, high-quality childcare.”

Koskinen said childcare is expensive, and the true cost of providing safe and quality childcare is often above what working families can afford to pay. 

“The average Wisconsin family with one infant is spending one-fifth of their annual income on childcare,” he said. “A typical family with an infant and 4-year-old are spending one-third of their annual income on childcare.”

And because the Wisconsin women workforce is strong, as Koskinen stated, that means Wisconsin has a higher rate of working mothers of infants and toddlers (68%) than the national average (62%).

“In some Wisconsin counties, residents rated childcare as a top-three most important issue to the county’s future,” he said.

Koskinen said from a marketing perspective, his summary of Wisconsin’s economy might need some work, but he likes to keep it simple – and at the end of the day, it’s the positive outlook the Badger State has that is the most important.

“Wisconsin is a pretty good state,” he said. “In a sense, we have a good situation because of the people we have. We have put ourselves in a competitive environment to succeed provided we pay attention. If we don’t pay attention, we can lose that edge. We’re a hard-working middle-class group, have a solid standard of living and take care of our neighbors.”

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