For more than a year, Wisconsin employers have been complaining about their inability to fill countless jobs. Restaurants have cut hours for lack of staff, factory workers are putting in extra shifts and help wanted notices go unanswered.
In response, policymakers in Madison have pursued widely divergent strategies to address the problem. In the Capitol, those strategies have divided largely along partisan lines.
Gov. Tony Evers, backed by Democrats in the Legislature, has made a series of proposals that rely on training and retraining for displaced workers, programs to provide more help in the job market for people who have little or no work history, and addressing barriers to employment — especially access to affordable child care.
The Republicans in the state Legislature have snubbed all of Evers’ initiatives.
Instead they have put most of their weight behind legislation that blames government benefits — FoodShare, Medicaid and unemployment insurance itself — for much of the problem. On Tuesday, the state Senate passed six bills that would restrict access to those programs in the name of getting people back to work and a seventh that would revamp much of the unemployment insurance (UI) program.
What’s the problem?
Demographics — not just population, but the makeup of the population — are at the heart of Wisconsin’s workforce gap, and they have been for years.
Wisconsin’s population is aging. According to U.S. Census Bureau data, in 2000, just over 13% of the state’s population was 65 or older. By July 2021, that had risen to 17.5%
“Labor force participation rates have pretty much trended downward as the population has aged,” said Scott Hodek, the section chief for the office of economic advisors in the Department of Workforce Development (DWD), in a November 2021 briefing on the state’s monthly jobs report.
Even with that, the state’s labor force participation rate — the share of the population either working or actively seeking work — stands at more than 66%, outpacing the national average of nearly 62%, according to DWD.
In December, the state’s unemployment rate hit a record low of 2.8%, and the total number of employed people reached more than 3 million — about 40,000 more people than in February 2020, the last jobs report before the COVID-19 pandemic triggered a brief but dramatic job crash.
There have been other obstacles keeping people who might want to work from going to work. Access to affordable child care is one.
“If you’re working second shift trying to find child care, good luck,” says Tamarine Cornelius, an analyst at the Wisconsin Budget Project.
Transportation is another barrier. Cornelius says that includes the lack of mass transit that connects people to far-away jobs. It can also include a driver’s license — or the lack of one.
A low-income worker might be unable to pay a traffic fine, Cornelius says — and failure to pay a fine is “the number one reason” that people lose a driver’s license, disrupting their ability to get to work.
Governor’s approach
In his draft for the 2021-2023 Wisconsin Budget a year ago, Evers included $29 million for new programs aimed at expanding Wisconsin’s workforce. Among them was a $10 million pilot “Worker Connection” program to strengthen ties between inexperienced workers and training or jobs by providing them with coaches to help them navigate difficulties, whether with child care, transportation or other obstacles. There were two other programs aimed at retraining people displaced from jobs in the pandemic.
The Republican majority on the Legislature’s Joint Finance Committee scorned the proposals at a budget hearing, then cut them from the budget two months later, after reciting complaints they were hearing from employers who couldn’t find workers.
The committee’s co-chair, Rep. Mark Born (R-Beaver Dam), called the Evers proposals “ways to keep people on welfare programs, to keep them out of the workforce.”
Unable to get them into the budget, Evers turned instead to the state’s share of federal pandemic relief aid. He allocated more than four times as much money as he’d originally proposed — $130 million — from the American Rescue Plan Act (ARPA) for a collection of projects to help under- and underemployed people and to address “regional workforce challenges that have been exacerbated by the pandemic,” the governor’s office stated in a July 14 press release.
The result has been the $10 million pilot Worker Connection Program that was cut from the budget and two other initiatives that weren’t in his original spending plan: $20 million for 11 regional workforce boards and the employers that they work with to create on-the-job training programs with subsidized wages that can grow into self-sustaining jobs, and $100 million in the form of Workforce Innovation Grants to regional projects that include training and other forms of support for prospective workers.
The first $60 million of the Workforce Innovation Grants was awarded in December to a dozen regional projects. On Tuesday, the Wisconsin Economic Development Corp., which administers the program, opened the application period for the remaining $40 million in grants, with a deadline of April 15.
All three of the initiatives are just getting off the ground, and it’s likely to be months before they can be evaluated. But Timothy Smeeding, an economist at University of Wisconsin’s La Follette School of Public Policy says the underlying idea behind the innovation grants has promise.
Focusing on regional projects and engaging various organizations within communities to work together is “a very creative and positive response,” Smeeding says. “It might be a win-win-win for everybody.”
Several of the projects that have already been awarded grants entail child care, whether that involves training programs or establishing or expanding child care centers.
“It’s clear that subsidized child care helps get more labor participation out of women who have children,” Smeeding says. A subsidy is necessary, he observes, because quality child care is expensive and without help in paying for it, it won’t make financial sense for people of low or moderate incomes.
Republican alternative
Republican lawmakers have said little about the administration’s ARPA-funded projects. In an interview with Politico magazine, Assembly Speaker Robin Vos (R-Rochester) was dismissive, saying, “How innovative is that? That’s not even lazy. That’s sad.”
On the Assembly floor Feb. 17, Born, the Joint Finance co-chair, summed up Evers’ approach to employers’ inability to hire workers as “gimmicks and really just rhetoric that we hear from the governor on this issue.”
The GOP response was in the form of seven bills that Republicans passed in the Assembly last week and in the Senate Tuesday evening.
Four bills rewrite the state unemployment insurance law in several ways. One requires the Department of Health Services (DHS) to make sure that no one on who can work and who is on BadgerCare will stay on the health coverage plan if their income rises above the federal poverty guideline, the current maximum to qualify. Another would require BadgerCare recipients to be disqualified if they turn down a job or a promotion in order to avoid increasing their income and making them ineligible. Another measure would order the restoration of a drug-testing and work requirement for so-called able-bodied recipients of FoodShare, the state’s federally funded nutrition program that helps cover the cost of groceries for low-income people.
In public hearings, advocates for low-income people, workers and people with disabilities all said the bills were likely to harm the people they represent. And on the Assembly and Senate floor, Democratic lawmakers criticized the legislation.
“I find it offensive and disrespectful to blame and punish workers after this body has worked its tail off to dismiss and to define and to dismantle workforce initiatives,” said Rep. Kristina Shelton (D-Green Bay) during the Assembly debate.
GOP lawmakers defended the measures. While state economists have linked a decline in Wisconsin’s labor force participation to the aging of the workforce, Rep. Calvin Callahan (R-Tomahawk) said in the Assembly debate that it has happened “as public benefit usage increases.”
Callahan added: “We need to get these back into the workforce. There are good paying jobs out there. The average salary in the state of Wisconsin currently is at $14 an hour, while companies such as Walmart, Target and Amazon offer even higher starting salaries.”
Next stop: The governor
Despite the most recent DWD report showing that the number of people working is about 40,000 more than two years ago, Born has several times referred to there being “100,000 fewer people in the workforce” than before the pandemic.
Asked about that reference, an aide pointed to DWD data that employers reported 100,000 fewer jobs in the report for December 2021 compared with February 2020.
The source of that figure, however, is the Current Employment Statistics data from the U.S. Bureau of Labor Statistics. Those numbers come from a census of employers, and the number of jobs that they report does not correspond with the number of individuals working. A person with two part-time jobs, at two different companies, for example, might be counted more than once.
In a January briefing on the December data, DWD’s chief economist, Dennis Winters, said that the smaller jobs number that employers were reporting reflected that there were fewer people working multiple jobs.
With the passage of the seven bills in the Senate on Tuesday, they now go to Evers’ desk for a signature.
Senate Democrats voted against all seven, while in the Assembly, Democrats voted against six; the seventh, revamping the UI system, passed on a voice vote with no debate and no declarations of support. The Democrats have predicted Evers will veto most, if not all of them.
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