Wisconsin’s challenge: Filling the job loss gap once the recession ends

    Recessions come and go, but this economic downturn has left a mark in Wisconsin that will prove much harder to erase. Simply put, many of the jobs that have been lost won’t be coming back.

    Past recessions were harsh, too, such as the prolonged economic dip that gripped the state in the early 1980s. But after the hard times passed, most of the jobs returned in manufacturing and other key sectors. In fact, Wisconsin’s peak for manufacturing jobs was about 590,000 less than a decade ago.

    That figure is down to about 441,000 durable and non-durable goods jobs today. Some will return when the recession ends, but many more have been lost to global competition, greater manufacturing efficiency and, of course, the painful transformation of the American automotive industry.

    How can Wisconsin replace that many jobs – especially jobs that paid decent wages? We can "wait for Godot" and hope things will somehow turn out, or we can examine what’s working – and what’s not.

    One of the more reliable indicators of Wisconsin’s economic strengths and weaknesses is the annual "Measuring Success" report produced for Competitive Wisconsin Inc. by the independent Wisconsin Taxpayers Alliance. This year’s report noted improvement in some key education indicators, such as adults with bachelor’s and doctoral degrees, as well as exports as a percentage of output, venture capital and health insurance coverage. However, the state continues to lag in per capita personal income (6 percent below the national norm) and the number of private businesses of all descriptions.

    The report also noted that Wisconsin continues to lag the nation in its percentage of high-tech jobs, which is probably true given the state’s relatively late start in building and retaining those kinds of jobs.

    Other recent reports, however, indicate that tech-based jobs are a part of what’s working in Wisconsin – especially in terms of high-end jobs.

    The latest Cyberstates report by TechAmerica, the nation’s largest technology organization, ranked Wisconsin 21st among the 50 states in high-tech workers with 85,100 in 49 industry sectors measured by the North American Industry Classification System. Grouped more broadly, those sectors include high-tech manufacturing, communications services, software services and engineering and tech services.

    Wisconsin’s high tech payroll was $5.4 billion in 2007, according to the Cyberstates report released in April, and ranked 22nd nationwide. The state had 4,300 high-tech establishments, which ranked 23rd among the states. Salaries of Wisconsin high-tech workers averaged $63,100, good for 35th among the states – but still 67 percent higher than Wisconsin’s average private sector wage.

    Additional bright spots within those figures: Wisconsin ranked third in the electromedical equipment manufacturing with 6,300 jobs and ninth in electronic components manufacturing with 7,300 jobs. It was also 13th in software publishers at 5,500 jobs.

    What the figures say is that Wisconsin needs more of the same. The percentage of high tech jobs in the Wisconsin workforce, as reflected in the "Measuring Success" report, is still relatively low. The state ranks 35th among the states in high tech jobs per 1,000 workers. But there’s plenty of room for growth within those sectors where Wisconsin already has an advantage, such as electromedical equipment and electronic components. These are world-class goods that help drive exports.

    The Cyberstates report does not measure most employment in the life sciences industry, where there were 19,800 workers in Wisconsin in 2008.
    Whether they are employed in research, testing and medical laboratories ($57,300) or drugs and pharmaceuticals ($75,000), those workers are also paid at rates that exceed the statewide private sector average.

    Even before the recession, private-sector job growth in Wisconsin was running behind the national average. Accelerating the growth in high tech jobs in Wisconsin can be a part of reversing that dangerous slide.

    Tom Still is the president of the Wisconsin Technology Council.

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