Scottie Lee Meyers of Wisconsin Public Radio wrote an article earlier this month about a new state-by-state analysis conducted by The Pew Charitable Trusts which shows that Wisconsin has “experienced the biggest decline in middle-class households in the country between the years 2000 and 2013.” Meyers reported that the study had found “the percentage of households in the middle class dropped in all 50 states, with Wisconsin’s drop from 54.6 percent to 48.9 percent being the most significant.” In addition, Wisconsin saw a 14 percent decline in median household income.
Meyers said that Marc Levine–a professor of history, economic development and urban studies who is director of the University of Wisconsin-Milwaukee Center for Economic Development–had “attributed the state’s shrinking middle class to the Great Recession, among other factors.” Levine said that “reversing the trend would require raising the minimum wage and restoring unions, especially in the manufacturing industry.”
Wisconsin’s economy relies on manufacturing perhaps more than any other state, said Levine. When manufacturing gets hit hard, he said, Wisconsin gets hit hard too.
Since 2000, Wisconsin has lost about 90,000 — between 18 to 20 percent — of its manufacturing jobs, according to Levine, in part due to free trade agreements and Chinese imports.
According to Professor Levine, a major part of the problem has been “downward occupational skidding.” That is, manufacturing workers who have been laid off “have been displaced into lower-paying jobs in the service industry, and those who have been able to continue working in the manufacturing industry have seen stagnant wages.”
Levine, said, “It turns out the manufacturing jobs aren’t paying what they use to anymore, and a big chunk of that is because of the de-unionization that has occurred.”
In the late 1960s, an estimated 35 percent of Wisconsin’s total workforce and 50 percent of manufacturing workers were unionized, according to Levine. Today, roughly 11 percent of Wisconsin workers are in a union. That figure is 17 percent for manufacturing workers.
In order to help grow Wisconsin’s middle class, Levine recommended “raising the minimum wage to a ‘living wage’ and supporting the ability of workers to engage in collective bargaining.” He added, “In Wisconsin, we’ve obviously gone the opposite way over the last three or four years. Act 10 took away the collective bargaining rights for public employees, and the rate of unionization in the public sector has declined by about half in the state. And of course, we just passed a right-to-work law and right-to-work states, the research suggests, tend to have lower wages. Those sorts of policies are pushing us in the wrong direction.”
To be sure, the decline in Wisconsin’s middle class pre-dates Scott Walker’s election as governor—but it appears Walker hasn’t done anything to help the situation in his state. Walker’s policies are likely aggravating the problem of a shrinking middle class.
Laura Clawson (Daily Kos):
…but it’s safe to say that Walker’s terrible job creation record, a poor record even according to the Chamber of Commerce, isn’t helping. Neither is saying the minimum wage “doesn’t serve a purpose,” or attacking the unions that reduce inequality, or slashing education funding. Walker was able to get elected by playing on the fears of voters in a shrinking middle class, but his agenda was always aimed at accelerating the decline.
Mike Ivey of The Capital Times said that Laurel Patrick, a Walker spokeswoman, pointed out that the Pew report covered the period from 2000 through 2013 and included “only the first three years of the Republican’s first term.”
From 2011 to 2013, Wisconsin’s median household income grew by 2.7 percent, 15th best in the nation. Patrick said that shows the progress under Walker’s leadership, which has emphasized tax cuts for business owners and regulatory reform as a way to grow the private sector economy.
Patrick also noted the following in an email: “Other income indicators also that show Wisconsin is heading in the right direction under Governor Walker.”
Those figures include a 1.8 percent growth in personal income in 2013, which is 12th best in the U.S. and above the nation as a whole (1.3 percent) and fourth best of 10 Midwest states behind Nebraska, Illinois and Ohio.
In addition, Patrick noted that the average weekly wage growth in the state was 17th best in the U.S. from the fourth quarter of 2010 through the fourth quarter of 2013, according to the Census of Employment and Wages, considered the most reliable measure of economic performance.
But UW-Madison economist Laura Dresser said income growth in the state for decades has been concentrated among the top 1 percent. She said that would explain the decline in the percentage of families considered “middle class” by federal standards, even if incomes have risen recently.
In a report this past January, Dresser wrote: “Wisconsin’s growth and prosperity are not being widely shared. Over the last 40 years, Wisconsin’s richest residents have experienced dramatic increases in income, while Wisconsinites not among the very highest earners saw little or no income growth.”
According to Ivey, Dresser’s report said that “Wisconsin reached a milestone with a record share of income going to the top 1 percent.”
It would appear that Governor Walker’s right-wing policies certainly aren’t helping most of the residents of Wisconsin–but I’m sure they warm the cockles of the Koch brothers shrunken hearts.
A Sampling of Comments that readers posted after reading Meyers’ WPR article:
Scott Walker’s anti-federalist ideology has prevented Wisconsin at every level from being part of the national recovery. He stands with the bitter billionaire club that deeply resents this recovery – for they represent the winners from the looting of this nation prior to the crash of 2008. They wanted to buy and own this and still do today. Notice the increased military budget of the GOP. The war-debt austerity formula was practiced well on Wisconsin, along with blaming your working neighbor. We are a state divided going under – with decreasing debt, as multinational businesses contribute zero tax dollars to support our infrastructure. That’s why we as citizens need to move to amend the Citizens United ruling in order to curtail the billionaire monopolies destroying democracy.
Walker is nothing more than a Koch Brothers (bitter billionaires club) puppet much of the time. They tell him what they want done and he does it. He is relying on their millions of dollars to fund his campaign for the RNC candidacy. Citizens United and Right To work are all part of that ideology as you had noted Rev David. And there will be more thinly veiled voter suppression policies in Wis if they have their way. My husband and I are both on disability and if Walker, Boehner and McConnell had their way we would have a 20% pay cut in the net few years to deal with. And we barely make ends meet now. The GOP see us as parasites and lazy despite the fact that I became disabled at age 38, after struggling constantly with my health and trying to do my job from a hospital bed. And my husband became disabled at age 48 after similar struggles.We both loved our jobs and had built our careers up over the years and were in positions that we would have kept until retirement. Bless President Obama and his administration for vetoing the Social Security/Disability funding reallocation business. That man has an uphill battle everytime he champions the average citizen and the working poor. His tenacity with the ACA was amazing. But expanding Medicaid in every state should have been mandatory. It is cruel the way the low income residents are unable to get any insurance at all. Before all of GOP changes to the ACA, the states did not have the option of refusing to expand it. I bet that if someone in Walker’s family was unable to get coverage you might see that policy change.
Of course Walker and that pack of short sighted idiots in the legislature deserve part of the blame, but in a large part this decline of the middle class is largely self inflicted. By swallowing all the right wing propaganda spewed out of FOX, Rush Limbaugh, etc. and the voting against there own best interests and electing these clowns, they have accomplished what big money had in the past only dreamed of, a completely subservient labor pool.
In reverse order:
The Governor by himself has little impact. The governor backed by a majority in the assembly and the senate combined with teams from ALEC who actually write a portion of the legislation for them not to mention provide in and out of state funding, has plenty of impact. That combination has as much impact as any group could on economic growth, or the lack thereof.
At this point we could look all the way back to Dreyfus if we wanted to bandy about what the root cause might have been. It does not matter. The question is how do we turn the WI situation around. That is Walkers job. He is clearly failing in comparison to other states that started out in worse situations than WI. In the two years of the study that include his term, as well as since. That is abundantly obvious to the most casual of observers. WI was unlikely affected much more or less than any of the rest of the states. WI simply has not done anything other than exacerbate the situation instead of improving it. Fair or unfair, that lands in Walkers lap.
Getting back to the point of the article: The economist argues that policy initiatives that boost what is left of the existing middle class, as well as ease the road to grow the middle class would be helpful. Based on the political rhetoric of politicians of all stripes who during campaigns regurgitate the mantra that the “middle class is the back bone of America”, it would seem that the suggestion merits some thought.
Walker bragged last summer that his administrations policies have saved the tax payer $2B. Not six months later, he is faced with…how much?… oh yeah, $2B budget deficit. Brilliant forsight! So now he has to cut even further to offset the shortfall, or raise taxes. Much like trickle down economics, another scam. Odd thing is, his union-busting is going to make the problem even worse, because now the tax payers have one less tool to use to try to make up for the ever growing wage-to-corporate gowth disparity. His tax payers will have even less to pay taxes on, or with for that matter. Add to that the expanding baby-boomers retirement and WI is set up to become the next Alabama. Bad news, brought on by sleeping through econ 101.
The time frame has been the same for all the states, some that were in worse condition than WI and are now doing better. Bottom line is, he has a job to do, regardless of how that job became tough. Someone is suggesting part of a solution to the problem. Do you have an alternative suggestion? If so, I for one am certainly open to it. I am not open to exuses made for Walker. They don’t matter. What matters is making a change that moves WI forward. If Walker can do it, that is fine by me. His performance thus far does not provide for much confidence. One would think he and others would be open to alternative approaches
SOURCES AND FURTHER READING
The Shrinking Middle Class, Mapped State by State (The Pew Charitable Trusts)
PULLING APART 2015: Focus on Wisconsin’s 1 Percent (COWS/Wisconsin Budget Project)
Report: Wisconsin Drops To 40th In Nation In Job Growth (Wisconsin Public Radio)