Wisconsin Department of Workforce Development Publishes Updated Workforce Profiles for All State Counties

Monday, July 3rd, 2023 -- 1:01 PM

The Wisconsin Department of Workforce Development (DWD) has published updated workforce profiles for Wisconsin's 72 counties.

Each profile provides county-level information, analysis, and data to help employers, job seekers, economic developers, and other workforce partners make decisions related to the labor market economy. Every two years, DWD's Office of Economic Advisors compiles and distills local data on all 72 counties into individual county workforce profiles.

The 2023 profiles cover Wisconsin's historic bounce-back from the COVID-19 pandemic and feature:

• Updated U.S. Census data and changing demographics, including figures for major municipalities;
• Employment by 11 industry sectors, with payroll totals and percentages;
• Occupational patterns within industries;
• Unemployment and labor force participation rates;
• Barriers to employment;
• And average wages.

For today, looking at the State of Wisconsin, Wisconsin's economy broke numerous records during 2022, as the rebound from the COVID-19 pandemic continued. During January through April, the state achieved a record low seasonally adjusted unemployment rate of 2.8%, while also achieving record lows in initial and continuing weekly unemployment insurance claims.

As the number of unemployed people trended downward, construction employment reached a record high, and the manufacturing industry also experienced strong growth. By year end, the state had regained 99% of the 404,000 jobs lost during the COVID-19 pandemic, including the short, sharp recession of March and April 2020.

In addition to the strong rebound in jobs during 2022, Wisconsin's real GDP reached record highs and the state concluded the year with a record high state surplus approaching $7 billion. While Wisconsin's year-ending labor force participation rate of 64.6% remained more than 2 percentage points above the national average, demographic trends including the aging and retirement of Baby Boomers contributed to the labor quantity challenge.

Concerns over inflation, compounded by China's response to the COVID-19 pandemic and resulting supply chain disruptions, also defined the year. As demand for workers grew throughout 2022, employers voiced concerns about their inability to attract talent and workers in general.

This is unlikely to change in the foreseeable future. The primary underlying challenge is the demographic situation as Baby Boomers exit the workforce. This lifecycle event will continue to complicate employers' ability to find workers and talent.

These demographic problems extend beyond Wisconsin and affect the upper Midwest, the U.S. as a whole, much of Western Europe, and in fact, the developed world. Even China faces a talent shortage.

Wisconsin’s labor force held relatively steady through the pandemic, while employment dropped severely and then recovered quickly. The employment gyrations pushed the unemployment rate to 14.1% in April 2020.

As employment recovered, the unemployment rate fell to new lows of 2.8% in March and April of 2022. As of December 2022, Wisconsin's seasonally adjusted unemployment is 3.2%. The short-run outlook for the state looks positive.

Job levels continue at high levels, registering gains in 10 out of 12 months in 2022. Job gains coupled with higher wages translate into healthy consumption, which makes up two-thirds of the economy. Wage gains have been robust.

However, the surge in inflation brought about by supply chain disruptions and the war in Europe have undercut the gains in real terms. We expect high inflation to be transitory while wage gains will be permanent.

With continued job and wage gains, consumption will be the underpinning of economic growth. The most prominent economic risk is the Federal Reserve Bank (Fed) aggressively combatting inflation through higher interest rates.

The Fed raised interest rates 7 times in 2022 – going from essentially zero to 5%. They set a range of 25 basis points. As of March 1, 2023 the range is 4.7 – 5%. Interestingly, Fed fiscal policy contributed to inflation pressures over the last few years.

Experts expect that inflation pressures will ease as supply chains readjust. As inflation pressures ease, the Fed will be able to conduct a more accommodative monetary policy. Tighter fiscal policy will have an influence over the coming years as well.

Businesses continue to voice lack of workforce talent as the primary constraint on production growth. Pursuit of workers has brought about wage and benefit increases, signing bonuses, and other incentives to attract workers.

However, other workforce barriers such as transportation, dependent care, housing affordability, and the uncertainty of workplace safety surrounding COVID-19. Workforce quantity is the primary challenge facing Wisconsin's economic future.

The demographic dynamics facing the state, other upper-Midwest states, the U.S., and most of the developed economies will advance unaltered in the coming decades. While Wisconsin's population will continue to grow over the next 20 years, the workforce faces serious constraints.

The labor force trend began to seriously flatten in 2008 after slowing in the late 1990s as the first baby boomers (those born in 1946) reached age 62 and began to leave the workforce. Baby boomers continue to exit the workforce in great numbers and will continue to do so over the next 20 years.

The number of retiring baby boomers nearly match the influx of new workers, resulting in a slow-growing workforce. This constrains employers' ability to secure talent across industries. Many businesses report that the lack of available workers has hindered expansion, and in some cases, even curtailed the ability to meet current business needs.

There are four solutions to the macroeconomic labor quantity challenge:

• Offshoring production;
• Immigration;
• Mitigating barriers to employment of the chronically unemployed;
• And technological advancement.

Critical to the technology solution is the concomitant match of labor skills with technologies' sophistication. This is true for designing, building, installing, operating, and maintaining the advanced technology being put in place as well as for development of the infrastructure and facilities needed to support technological progress: broadband, power, water, transportation.

Worker skills must align with skills demanded by the position. If you have the talent and not the job, the talent goes elsewhere. If you have the job and not the talent, the job goes elsewhere. For Wisconsin to successfully compete in the global economy, the state needs to attract and retain every body it can and educate and train everybody to match the requirements of the new technologies.

For the remainder of the week, we’ll look at the demographics for Clark County.

Feel free to contact us with questions and/or comments.