By Sammis White, Ph.D.
The Wisconsin economy has continued to generate new jobs. Aside from a modest slowdown in 1991-92, the Wisconsin economy has grown throughout the 1990s. The distribution of employment by industry has evolved and reflects changes occurring at the national level. Basically, service-sector employment is becoming more dominant. This is not to say that Manufacturing employment is disappearing. It is not. In fact, Manufacturing employment has been growing in Wisconsin from 1991-96, but its rate of growth is not sufficient to compete with the far faster growth in the service industries. Thus, in terms of the sheer number of jobs, Manufacturing is becoming relatively less important. Much of the employment growth in the state is still tied in some way to Manufacturing. It is just that direct employment in Manufacturing is relatively less important.
When one looks at the geographic distribution of employment in the state, there are changes as well. That is the focus of this report. With the seemingly ever-increasing urbanization of the state’s population, it is important to understand better how well its metropolitan economies are functioning. Is employment growing? If it is, to what can this be attributed? Is growth coming from a few, specific industries? Is growth coming from large rather than small firms, from businesses that are independent or from those that are part of a larger organization? Answers to these and similar questions will allow us to understand better our local economies and better enable us to build on the strengths that have been developing.
Until two years ago, answers to such questions could only be determined for Milwaukee, but a somewhat similar examination of the changing metropolitan economies was completed by this author in 1995 and focused on the same metropolitan economies as this report does. This report expands upon that prior one to include an examination of the entire state economy by adding a category entitled “the rest of the state.” This catch-all encompasses the smaller metropolitan areas and the rural areas, combined as one. Collectively, these are compared to the eight largest metropolitan areas.
The largest is the Milwaukee area and consists of four counties – Milwaukee, Ozaukee, Washington, and Waukesha. The next largest is Dane County, with the lead city of Madison. The third largest is Brown County with the central city of Green Bay. Three of the remaining metropolitan areas have a central city that shares its name with the surrounding county: Kenosha, La Crosse, and Racine. The other two are Rock County – which has two central cities, Beloit and Janesville – and the Fox Cities, which consists of 16 communities in three counties in the Fox Valley. Among the communities included are Appleton, Neenah, and Menasha. The Fox Cities, for this analy sis, do not include Oshkosh or Fond du Lac, economies that are smaller and somewhat distinct.
The data set used for this analysis is based on the Unemployment Compensation records of the state’s Department of Workforce Development (DWD). By law, every employer (with a few exceptions, such as small farms, family members, and religious organizations) with one or more employees in the previous quarter who received at least $1,500 in pay is supposed to report to the state the employer’s name, address, employment, payroll, industry, and several other characteristics. This information is then aggregated and analyzed at any of several geographic levels, including the individual community, a county, or the state. The state uses these data for its official counts of employment.
The quality of the data has increased in recent years due to extensive efforts by the Department of Industry, Labor, and Human Relations (DILHR) – now DWD – to the point that it now requires only modest editing. We examine the data for inconsistencies, misplaced employers, and the like. We have attempted to correct for all identifiable imperfections. Still, the data set is not perfect. We warn the reader that although it remains the best data set to examine the questions we ask, some error is likely to remain, especially when one looks at small geographic ar eas.
One sector of the economy is particularly susceptible to error, in part because it is counted differently from what one might expect. That sector is Government. For this data set, many workers thought of as Government employees are counted in other industries. For example, post-office workers are counted in Standard Industrial Classification (SIC) 43, U.S. Postal Service. Teachers and university workers are counted in SIC 83, Educational Ser vices. Transit drivers, even though they may work for a county transit authority, are counted as SIC 41, Local Passenger Transit. Additionally, Government workers do not have the same reporting requirement as private-sector workers, so such workers may not be reported as regularly. What this means is that employment in the Government sector will commonly appear to be smaller than most of us would expect.
The dates of the analysis are the period from March 1991 through March 1996, the latest period for which the data are available. The trends identified are likely continuing through the present. The state economy is continuing to grow, and unemployment is down very slightly in January 1997, compared with January 1996. The 0.1 change in rate is small enough to be of little consequence. Regardless, the economy is growing, if somewhat slower than that of the nation.
