Stay focused on economic growth
4:44 PM 5/08/04

Gov. Jim Doyle and state lawmakers can look back on a job well done after adopting a series of laws to promote economic development in the past legislative session. But this is no time for policymakers to declare victory and move on. In fact, economic development should remain near the top of the state's agenda. <

The continuing shift of the state's economy from higher-paying jobs to lower-paying jobs illustrates why economic development should remain a policy priority. <

The Economic Policy Institute, a labor-supported Washington, D.C., research organization, examined Wisconsin's economy during the two years after recession ended in November 2001. The institute's study showed that Wisconsin's economy changed shape during that time, with the lower-paying sector expanding and the higher-paying sector contracting. <

The average annual pay of industries that grew in employment was $31,343 or 19 percent less than the average pay of industries that reduced employment. <

While a continued loss of good-paying jobs is normal for a few months following a recession, the two-year period is unusual. Moreover, although some signs of a turnaround have emerged since the study ended last November, the trend has yet to be broken. Wisconsin is still losing higher-paying jobs. <

The consequences are disturbing. Lower average pay means a lower standard of living for residents, lower tax collections to pay for services and fewer opportunities for the best and brightest of Wisconsin's next generation. <

However, there are reasons for optimism. Wisconsin is not alone. All but two states, Nevada and Nebraska, experienced a turnover of higher-paying jobs for lower-paying jobs. Wisconsin actually fared better than the national average of a 21 percent difference between the average pay of growing industries and contracting industries. <

Among 12 Midwestern states, Wisconsin ranked third for the average annual pay of its growing industries, behind only Michigan and Nebraska. <

Furthermore, data show that there is nothing inevitable about lower-paying jobs replacing higher-paying jobs in the modern global economy. During the two years before recession, U.S. employment grew faster in higher-paying industries. <

Wisconsin's relatively strong position among states suggests that if there is a national shift back to growth in higher-paying jobs, Wisconsin will fare well. <

In this environment, Wisconsin cannot afford to view the economic development package passed in the recent legislative session as a complete answer for economic policy. The governor and lawmakers should look for more ways to: <

Ease regulatory burdens for businesses. <

Invest efficiently in the retraining of workers for new jobs. <

Take advantage of the research and brainpower at the state's universities. <

Attract venture capital for new businesses. <

Help Wisconsin businesses sell in foreign markets. <

Ensure that businesses statewide have access to reliable energy and the best available telecommunications technology. <

Promote Wisconsin as a good place to do business. <

Wisconsin is now equipped with improved economic development tools. But if the state is to spark the growth of higher-paying jobs, more needs to be done. Learn more: Building the New Wisconsin Economy is a two-year civic journalism project designed to engage the public and stimulate a high-profile discussion about economic development in our state. Information: www.bnwe.info <