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.
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."
Koskinen was asked if the unemployment rate might be going down because of discouraged dropping out of the workforce (a phenomenon that's played a huge role in bringing down the national unemployment rate). But that isn't the case in Wisconsin. "Our workforce has actually been expanding over the last six months," Koskinen said. "The total workforce has expanded, number of people employed has expanded, and the number of people unemployed has fallen--sort of the ideal situation that you want."
"If Wisconsin was in fact losing 30,000 jobs... one would expect that we would have increasing unemployment compensation claims. That's not true," Koskinen said. "We're starting to get back to pre-recession levels--those are the continuing claims. Indeed, if we think in terms of initial [unemployment] claims, which is the new records, we have in fact fallen below pre-recession levels."
Koskinen also noted that "our biggest gains have been in manufacturing--far and away."
It's understandable that some might be leery of the accuracy of an alternative jobs report three weeks prior to an election. But all evidence points to the conclusion that Koskinen and the Quarterly Census are correct: Wisconsin is gaining jobs. With the facts against them, Wisconsin Democrats are now resorting to accusations that Walker is guilty of "illegal coordination" with the state agency in releasing the jobs numbers early. But the Milwaukee Journal Sentinel asked the Bureau of Labor Statistics if the state broke any rules by releasing the numbers now. "No," an official emailed the Journal, "BLS does not have any concerns. Wisconsin is free to publish its data when it wishes."
*Correction: This report originally stated that John Koskinen signed the Walker recall petition. According to a reliable source, the John Koskinen who signed the petition is the son of the chief economist at the Department of Revenue.