Wisconsin unemployment rate at 3.3%, aging workforce challenges loom large

At the same time, the percentage of working-age Wisconsinites currently employed or actively seeking work dipped from 65.6% in September to 65.3% in October, according to preliminary numbers from the state Department of Workforce Development. That still tracks above the national workforce participation rate of 62.6% last month.

Wisconsin’s unemployment rate sat at 3.3% last month, compared with a national rate of 3.7%. All told, the state needs to add nearly 49,000 more jobs in order to reach Wisconsin’s pre-pandemic employment level, said DWD chief economist Dennis Winters.

“The state has recovered more than 98% of the jobs that we lost during COVID,” Winters told reporters last week. “We still have a little ways to go, but for the most part we’re on the cusp of doing that.”

But underlying labor challenges, due in large part to an aging population nearing retirement age, continue to present looming concerns.

“This continues to be a focus on how we need to get everybody we can find and get everybody trained up and get them into the workforce and make them contributors,” Winters said.

A September report from the Wisconsin Counties Association’s nonpartisan research arm Forward Analytics detailed how migration trends in the state — which show more working-age people moving out of the state rather than in — underscored Wisconsin’s need to attract and retain more out-of-state talent in order to address ongoing workforce challenges.

The report, titled “Moving In? Exploring Wisconsin’s Migration Challenges,” found that more than 460,000 families left Wisconsin from 2012 to 2020, compared to just under 430,000 individuals moving into the state. Over that nine-year span, the state lost more than 105,000 tax filers identifying as families under the age of 26 while gaining fewer than 89,000 from other states. Typically, such filers are single individuals, the report notes.

More than one-third of the families that left Wisconsin between 2012 and 2020 moved to a bordering state. Of the nearly 160,000 Wisconsin residents to move to a neighboring state, more than 62,000 moved to Illinois while more than 65,000 moved to Minnesota.

The state’s labor force challenges will almost certainly be a focus of the 2023-25 budget that Democratic Gov. Tony Evers and the Republican-led Legislature will take up the next legislative session. The state enters 2023 with a more than $6.5 billion projected surplus.

Speaking at a WisPolitics.com luncheon Tuesday, Assembly Speaker Robin Vos, R-Rochester, pointed to several GOP-authored bills that Evers vetoed last session as one possible solution. Those bills would have limited how many weeks an individual can claim unemployment payments, as well as add other restrictions to benefits.

“The first thing we have to do is make it so that people know they have to work to eat,” Vos said.

Opponents of such measures have said the state needs to provide better training opportunities and eliminate barriers to employment like transportation and child care services.

Other options being kicked around by the Legislature to attract more talent to the state include tax breaks, addressing the high cost of child care and easing local government levy limits to help communities generate more revenue for amenities and services.

A recent study by the Center on Budget and Policy found that of all 50 states, Wisconsin allocated the largest portion of federal American Rescue Plan Act funds to economic development measures.

All told, nearly 56% of the state’s ARPA allocation, or about $1.1 billion, was spent on the state’s economy through Aug. 31. The state spent more than $363 million on general economic development, $130 million on workforce development and more than $641 million on assistance to businesses.

“These investments are good for the whole community because when one new business opens, it’s a chance for other local businesses to benefit from increased foot traffic and supply chain relationships,” said Melissa Hughes, secretary and CEO of the Wisconsin Economic Development Corp. “It’s really a win for everyone.”