Noah Williams, UW-Madison, nmwilliams@wisc.edu
Marc Levine (http://www.jsonline.com/news/opinion/here-are-the-facts-on-wisconsins-economy-b99498072z1-303345311.html ) has responded to my
piece on the state of the Wisconsin economy (http://www.jsonline.com/news/opinion/wisconsin-economy-outpacing-other-states-b99493700z1-302688511.html ) by
mischaracterizing my analysis, accusing me of “factual errors”
and “spin”. He
presented data from different sources, from different time
periods, with different indexing, and when he found different
answers, he accused me of “outright misstatements.” My piece
objectively reported facts, and on my website I had posted a
longer background article (http://www.ssc.wisc.edu/~nwilliam/wisconsin-economy.htm ) with
all of the relevant data cited and plotted, all of which
supports my statements. If Professor Levine had contacted me,
looked at my piece, or delved into the data, he would have
avoided his mistakes and mischaracterizations. But apparently
Professor Levine was more concerned with countering imagined
“radical right wing economic policies” than engaging in
discussion. For someone who grandstands about the facts, he
seems to show little regard for them.
On the substance of his critique, Professor
Levine relies on employment data from the establishment survey
for employees on nonfarm payrolls. By contrast, I used
the household survey measure of employment. The data do give
different results for the past few years: growth in nonfarm
payrolls has been lower in Wisconsin than in the nation as a
whole, while household employment has roughly kept pace with
the national average. Some
of the discrepancy is due to the fact that the household
survey counts the self-employed, but avoids double counting
due to the same person holding multiple jobs, which the
payroll data does. But
much of the difference is driven by the fact the nonfarm
payrolls by definition exclude much of the agricultural
sector, a crucial source of employment in Wisconsin.
But perhaps most importantly, the household
survey is the source of the unemployment rate data, which
shows a strong and improving labor market. Over the past
several years the unemployment rate in the state has fallen,
while the labor force has grown, and participation has
remained stable. All
of this suggests a very healthy labor market. Moreover, as an
article in Forbes (http://www.forbes.com/sites/jonhartley/2015/04/23/as-the-fed-prepares-to-tighten-which-states-have-already-reached-full-employment/ )
emphasizes, for an economy like Wisconsin which is near full
employment, the unemployment rate is a better indicator of
labor market health than job growth. Once all willing
workers have found jobs, further job growth will only come
through population growth, but the unemployment rate will
remain low and the labor market will be healthy.
For household incomes, Professor Levine
also chose to use a different data set, and by presenting a
different time span he finds a different answer, which causes
him to call my analysis “factually incorrect.” The data I used is a
publicly available (and easily obtained) measure of real
median household income provided by the Census Bureau. The data are annual
and gathered over the year, so my results were based on the
growth of 2013 (the most recent available) over the end of
2010 (pre-Walker). Professor Levine quotes a different
measure, but starts at the end of 2011. Using Levine’s
preferred data source but considering the same time span I did
changes the details but preserves my conclusion: median
incomes in Wisconsin have outpaced the national average.
In addition, the household income data is
consistent with per capita personal income, another broad
measure of income, which has grown faster in Wisconsin than
the national average. Again
taking the end of 2010 as the base, through 2014 real per
capita personal income (deflated with the PCE deflator) grew
by 6.9% nationally and 7.1% in Wisconsin. Importantly, real
disposable (after-tax) per capita personal income grew even
faster relatively in the state, at 4.8% vs 4.3% nationally.
Thus overall, the message from my piece
remains unchanged. Professor
Levine did not confront the data I presented, which are easy
to obtain from usual sources, and which I had made available.
Instead he levelled unfounded charges of “misstatements” and
“factual errors”. I
leave it to readers to judge who is engaging in “spin” to
characterize the performance of the state as “Walker’s
disastrous economic record.” Looking at broad labor market
indicators and broad measures of income shows that Wisconsin
has done well and in many dimensions has outperformed the
national economy.