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Top Wisconsin Economist: State Is Gaining Jobs

More reliable report reveals better jobs numbers for Wisconsin.

7:58 PM, May 16, 2012 • By JOHN MCCORMACK
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In the Wisconsin gubernatorial recall race, Republicans and Democrats continue to spar over the jobs numbers under Governor Scott Walker's administration. Republicans have been touting the fact that the unemployment rate has declined from 7.7 percent to 6.8 percent since Governor Scott Walker took office. But Democrats have countered by pointing to a Bureau of Labor Statistics (BLS) report showing that the state lost 29,000 non-farm jobs during the past year--making Wisconsin dead last in that category nationwide.

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So has Wisconsin's employment outlook become better or worse? According to a new and more reliable jobs report, the BLS report cited by the Democrats is inaccurate. As the Milwaukee Journal Sentinel reports today, the BLS "figures were based on a sample of 3.5% of the state's employers and are subject to significant revisions." According to the Quarterly Census of Employment and Wages--which is a hard count of actual jobs in Wisconsin, not a survey--the state actually gained more than 30,000 since Walker took office. 

The new jobs report was met with outrage and incredulity from Wisconsin Democrats and liberals in the press. Tom Barrett had accused Walker of trying to "cook the books."

"They brought in a fiction writer. They don’t like their numbers. They’re going to make up their own numbers," Barrett told reporters earlier this week.

"Scott Walker Magically Turns Dismal Wisconsin Job Numbers Into A Pre-Election Miracle," read the headline of liberal pundit Rick Ungar's story at Forbes. Slate's business and economics correspondent Matthew Yglesias wrote a similarly snarky headline about the Wisconsin jobs report. 

But there's really no question that the Quarterly Census is a more accurate report of Wisconsin's jobs numbers. Employers are legally required to submit their employment numbers to the state census. As the Milwaukee Journal Sentinel reports:

Each state gathers the quarterly census data from virtually all employers in both the public and private sectors, which are mandated to share staff and wage data as part of their tax and unemployment insurance reports. That makes it a more reliable source of employment data, state officials and many economists say. [...]

"The quarterly (census) data is much more reliable," said Brian Jacobsen, an economist in Menomonee Falls with Wells Fargo Funds Management. "If that one's showing job gains, that's going to be tough to argue with. It's a census as opposed to just a sample. That's a reason why that survey is used for benchmarking purposes."

The notion that the Wisconsin Department of Worforce Development--the state bureau that released the state's jobs data--"cooked the books" is simply absurd. Dennis Winters, Chief of the Office of Economic Advisors at the department, signed a petition in to recall Governor Walker. 

John Koskinen, the Wisconsin Department of Revenue's chief economist, recently delivered a compelling 15-minute presentation to the Association of Government Accountants on why the BLS report on Wisconsin's job loss is inaccurate.* 

"On the one hand, [BLS] report[s], that we had the largest year over year decline in employment. On the other hand they reported we were one of the sixteen states that had a significant drop in unemployment," Koskinen told accountants. "How is it we can have both at the same time? I'm arguing we can't."Koskinen pointed to three other data points from BLS that point toward job growth: For 2011, Wisconsin was in the "top quarter for income growth," income and sales tax collections "are running well ahead of estimates," and jobless claims went down to "pre-recession levels." 

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