Families working longer in downturn

Michael Jacob

The national economic slowdown is hitting Wisconsin hard, according to a report released this Labor Day holiday weekend by the Center on Wisconsin Strategy, the research and policy institute on Wisconsin living standards.

COWS reports that Wisconsin families are working longer hours than the national average, but with stagnating wages. Job growth here has slowed, and the growth in unemployment is higher than it is nationally. Just a year after COWS reported an up-tick in wages and income in its “State of Working Wisconsin, 2000,” the current report “Working Wisconsin: Update 2001,” based largely on data jointly developed with the Economic Policy Institute, shows just how hard Wisconsin has been hit.

After eight years of moderate growth, real wages (adjusted for inflation) in Wisconsin have stagnated. Wisconsin’s median wage in 2000 was the same as in 1999: $12.24 per hour.

While wages stagnate or decline, Wisconsinites compensate by working ever-longer hours. In 2000, 7.1 percent of all workers in Wisconsin held more than one job, well above the national rate of 5.4 percent.

And the average married couple in Wisconsin works 3,952 hours per year, 258 hours more than the national average.

“This sort of coping strategy can’t continue indefinitely,” says Joel Rogers, director of COWS and professor of sociology and law at the University of Wisconsin–Madison. “At some point the body breaks down, or households run out of additional spouses. We need to start talking about job quality and Wisconsin’s wage problem, not just celebrating the numbers of jobs we have.”

Update 2001 shows that Wisconsin is among 14 states experiencing the most significant declines in job growth, increases in unemployment, or outright job loss in manufacturing, a traditionally high-wage core of the state’s economy.

Annual job growth in Wisconsin is now half what it was two years ago: 1.2 percent in 1999 versus 2.4 percent in 2000.

Starting from a lower point than the rest of the nation, Wisconsin’s unemployment has grown about three times as fast, from 3.3 to 4.3 percent over January 2000-June 2001 versus 4.0 to 4.5 percent nationally.

In the last year, Wisconsin manufacturing employment has fallen by 7,000.

“What a difference a year can make,” says Laura Dresser, COWS’ research director. “There were real reasons for celebration last Labor Day in terms of the median wage and other indicators of how workers were doing. Now we see a troubling turnaround. And we’re going to have more before it gets better, unless we change present public policies in the state.”

The State of Working Wisconsin is produced by COWS every two years. This is the first time interim data has been made available.

COWS’ release of this report corresponds with the national release of a paper and related data on the effects of the economic downturn by the Economic Policy Institute, a non-partisan research institute in Washington, D.C.