Wisconsin continues to face a workforce shortage that’s making it difficult for many businesses to fill open positions.
Some have blamed enhanced unemployment benefits enacted due to the COVID-19 pandemic. The additional $300 weekly federal unemployment benefit ended in Wisconsin earlier this month. That should help bring more people off the sideline and into the labor market. With Wisconsin’s unemployment rate at 3.9%, the enhanced unemployment benefits are no longer needed.
However, there’s a bigger problem. Wisconsin’s population growth is weak, which leads directly to a lack of economic growth because we need people to start businesses, work for companies, and be consumers.
The 2020 census shows Wisconsin’s population grew only 3.6% the past decade, the slowest decade for population growth in the state’s history.
The U.S. population grew 7.4% from 2010-‘20, so Wisconsin is lagging well behind the rest of the nation. In the Midwest, Minnesota (7.4%), Iowa (4.7%) and Indiana (4.7%) all had faster population growth than Wisconsin, which did better than Illinois (where population decreased 0.1%), Michigan (2.0% growth) and Ohio (2.3% growth).
The lack of population growth is a huge problem for Wisconsin. Fixing it should be a major priority for state policymakers.
Some of the most common reasons given for our lack of population growth include the weather (which we can’t do anything about) and Wisconsin’s notoriously high taxes. During Scott Walker’s time as governor (2011-‘19) he and the Republican Legislature worked to lower taxes and improve the state’s business climate.
Lower taxes will help attract more residents to the state, but it’s obviously not enough, otherwise Wisconsin’s population growth would be better. According to WalletHub, Wisconsin has the 17th highest tax burden in the U.S., which is better than Minnesota (6th highest) and Iowa (13th highest), but those states had higher population growth rates.
Lower taxes and a business-friendly environment are only part of a comprehensive growth strategy that Wisconsin needs. The state needs to invest in the UW System as it attracts and develops talent to fill the workforce pipeline, it needs to invest in quality-of-life amenities that make this a great place to live, and it needs to be welcoming to all types of people, including immigrants.
The state’s economic strategy has largely focused on the manufacturing and agricultural sectors, which produce export products that bring money into the state’s economy. But it needs to do much better fostering startups and high-tech companies.
Finally, the best opportunities for growth are in the state’s largest cities. The Madison metro area grew a healthy 12.5% from 2010-‘20, but the Milwaukee area’s growth was a pitiful 1.2%. State government needs to work better with its two largest cities and restore local control so these communities can find appropriate solutions to their unique problems.