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Walker Recall Vote Turns On Wisconsin Work Creation Record: Jobs

Monday, 04 June 2012 06:10 AM EDT

Nine is the only number that means anything these days to Larry Carlton, a foreman for a southern Wisconsin electrical contractor. That’s how many electricians he oversees in a crew that a year ago had 11.

“The goal is keeping everyone busy,” said Carlton, a 60- year-old from West Bend who ignores all the other numbers he hears in television ads, campaign speeches and talk-radio chatter referring to jobs coming to Wisconsin. “It is politics at its best, to make it look like we’re really going someplace. Are we?”

That’s a difficult question to answer without being challenged in politically polarized Wisconsin. Voters there will decide tomorrow whether to oust their governor, Republican Scott Walker, 17 months after he was sworn into office with a promise to create 250,000 private sector jobs by the end of 2014.

The recall initially triggered by a dispute over Walker’s 2011 collective-bargaining restrictions on public employees has evolved into a campaign turning on the state’s economic climate. At issue is employment data and whether they are as good -- or as bad -- as they appear. The import of these numbers has been magnified by the ouster vote, only the third for a state chief executive in U.S. history.

While other states will hold elections tomorrow -- California voters will decide the fate of a $1-a-pack cigarette- tax increase to fund cancer research and New Jersey holds two Democratic primary contests for congressional seats -- the Wisconsin recall has attracted national attention.

Jobs and Elections

Promises of jobs often get politicians elected. Failure to produce or protect them destroyed the re-election chances of Presidents Herbert Hoover, Jimmy Carter and George H. W. Bush, as well as scores of governors. President Barack Obama came under attack June 1 from Mitt Romney, the presumptive Republican nominee, after employers added 69,000 jobs in May, the fewest in a year and less than the most pessimistic forecast in a Bloomberg News economists’ survey.

After raising expectations in Wisconsin, Walker, 44, is under heavy pressure to deliver. The numbers have been uncooperative. The U.S. Bureau of Labor Statistics, which churns out reams of national and state employment data every month, has shown Wisconsin losing 33,900 jobs in 2011. The numbers, which aren’t adjusted for season variation, were among the worst of any other state. The state also ranked 42nd out of 50 states in economic health in 2011, according to the Bloomberg Economic Evaluation of States.

Unemployment Rate Falling

At the same time federal figures showed jobs leaving, Wisconsin’s unemployment rate was falling. In April, it was 6.7 percent and has been dropping steadily since January 2010, when it last peaked at 9.2 percent. Walker has touted that as evidence of a strengthening economy.

The monthly job-loss data, though, provided ammunition for Democrats to argue that Walker should be bounced from office. With the recall election bearing down on him, Walker drew on a different federal measurement -- a quarterly accounting -- on May 16 and last year’s job loss was transformed into a gain of about 23,000.

“Good news for Wisconsin,” Walker said in a television ad that began running that same day. “The government just released the final job numbers, and as it turns out, Wisconsin actually gained -- that’s right, gained -- more than 20,000 new jobs during my first year in office.”

Milwaukee Mayor Tom Barrett, 58, Walker’s Democratic opponent in tomorrow’s election, promptly labeled the figures “fiction.”

Public Opinion

The quarterly jobs measurement appears to have had an impact on public opinion. A poll by Marquette Law School in Milwaukee in early May showed that 20 percent of those questioned thought the state had gained jobs while 37 percent believed there was a net loss. An updated poll released May 30 from Marquette reflected a shift -- 38 percent said more jobs while 30 percent said fewer.

“That’s very dangerous,” said Charles Ballard, an economist at Michigan State University in East Lansing. “If you let each governor come up with his or her own numbers, I bet almost every state would have faster job growth.”

“As soon as it becomes a political football, the numbers become meaningless.”

Clear Picture

Getting a clear jobs picture of Wisconsin is tough, said Abdur Chowdhury, chairman of the economics department at Marquette University. The manufacturing sector has shown growth, he said, pointing to Obama’s visit in February to Milwaukee- based Master Lock Co. to celebrate the return of about 100 jobs from China. Meanwhile, the construction industry continues to suffer.

“We are struggling to keep everyone working,” said Carlton, the electrical foreman, who has to drive more than an hour to some job sites. “The bottom line is we are losing jobs.”

While quarterly jobs data are more accurate, those numbers are also subject to revisions, just like the monthly ones, Chowdhury said. That, he said, can lead to confusion.

“The Walker administration obviously came out with the data because they saw that the data was more favorable to them,” Chowdhury said in a telephone interview.

“The fact that they came out with data is mid-May was very unusual,” he said. “It’s not against the law but it’s just very unusual. States usually don’t do that. They did it for obvious political reasons.”

Not so, said John Koskinen, chief economist at the Wisconsin Revenue Department.

‘Economic Decisions’

“You have to understand that people do make economic decisions based on economic data, right?” Koskinen said. “Having inaccurate information out there affects decisions that people make.”

The monthly data needed to be challenged because they were distorting the state’s economic picture, he said. The Walker administration used a quarterly jobs census measurement, which covers about 98 percent of employers, as opposed to the monthly survey that relies on a survey of about 5.3 percent of employers.

Ballard, the Michigan State economist, said if one state is going to rely on quarterly numbers, “then so should the nation as a whole.”

“I can understand the political imperative,” he said, “but I want the numbers to mean something.”

This is statistical noise to Jeff Zander, 50, an electrician from Cross Plains who recently celebrated his one- year employment anniversary after being out of work almost two years.

“It’s always hard to say what the numbers mean,” Zander said. “You can play a lot of games with statistics to show what you want to show.”

Zander’s own significant figures are these: He says he’s making about half the salary he made in his former job. The value of his retirement portfolio has just returned to where it was four years ago. He doesn’t see his income “growing in the future at all.”

“And I’m playing the lottery and really hoping it comes through,” Zander said. “That Powerball really looks good.”

© Copyright 2023 Bloomberg News. All rights reserved.

Monday, 04 June 2012 06:10 AM
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