Wisconsin jobs meter is moving the wrong direction

Teaching economics to college students and business executives is never an easy thing to do. This already challenging endeavor gets even more difficult when it comes to discussing economic data. If moving lines on graph back and forth doesn’t put the audience to sleep, as discussion of statistical significance and sampling theory surely will.

But, in the end, economic data matters. Misunderstanding economic data can lead to business leaders making multi-million dollar mistakes. It does not help matters when our elected officials also misrepresent economic data and how it is collected.

Take for example the current debate in Wisconsin over labor market data. In an interview last month the current Wisconsin Lt. Gov. Rebecca Kleefisch stated that labor market data was “way off” and that “journalists are questioning those numbers.”

What is her complaint? Has she developed a new and improved algorithm to measure labor market turnover? Well…no. First, she is upset that U.S. Department of Labor uses sampling in compiling their data. As I understand it, the Lt. Governor’s background is as a local TV news reporter, so she may not be very deeply steeped in statistical analysis.  One wonders if she also gets upset when her favorite TV show gets cancelled because the Nielsen Ratings only ask “some” American households what they watch?

Next, the Lt. Governor seems distraught over revisions to initially released data. One of the key points we economists stress to business leaders is that initially released economic data is questionable, but it is the trends in the data they should be watching, not just the actual numbers. But, the Lt. Governor will have none of this. She cited “business owners taking those numbers (she is taking about the initial estimates) in deciding whether to invest in their workforce…”

Umm, no Lt. Governor – it’s the trend the business owners and business leaders are looking at and that have them concerned. And, unfortunately, the trends in the Badger State are clear – they are losing private sector jobs. In great part, they are losing those jobs because of cuts that are being made to things like education around the state. Those business leaders understand that by cutting education spending today, the result will be disastrous economic growth in Wisconsin in the future.

See, its back to moving those lines around on a graph again. And what they have to say is not encouraging for the future of Wisconsin.

But, instead of having an honest discussion of the economic problems facing the state of Wisconsin, the Lt. Governor wants to blame the Department of Labor for how it puts together its labor force statistics. What is an economist to do?

Michael Brandl, Ph.D., is a professor at the Fisher College of Business at The Ohio State University. He is a Racine native who also teaches in the University of Wisconsin-Madison Economics Department during the summers.

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