What is Wisconsin's true unemployment rate?

Posted at 1:16 PM, Jun 16, 2016
and last updated 2016-06-16 21:50:45-04

On Thursday, Wisconsin officials released new unemployment numbers, claiming that Wisconsin’s unemployment rate is at the lowest point in 15 years.

Wisconsin’s Department of Workforce Development (DWD) says the rate dropped from 4.4 percent in April to 4.2 percent in May.

However, experts tell TODAY’S TMJ4 that those numbers may not tell the whole story.

“The major concern with the statistic is that anyone who does not have a job and is not actively looking for one is not counted as unemployed and is also not counted as member of the labor force,” said Dr. Scott Drewianka, an Associate Labor Economics Professor at the University of Wisconsin-Milwaukee.

Drewianka says most economists would argue that the state’s numbers aren’t the best indication of the status of labor demand.

Another issue he raised with the DWD numbers –---  the numbers don’t speak to the quality of jobs.

"It is certainly possible for the unemployment rate to be low and yet for many workers to have jobs beneath their qualifications or with lower-than-expected compensation,” Drewianka said.

The numbers also don’t factor in those working less than full-time hours.

He also noted that Wisconsin's business cycle tends to lag behind the national cycle by a few months.

“So it is possible that things might not get much better from here, Drewianka added.

A Marquette University professor found additional problems with Wisconsin’s stats.

“The main problem is that the 4.2 number is the BLS preliminary estimate. In other words it is subject to final revision. Hence, I wouldn’t claim a record just yet,” said Marquette University Economics professor Dr. Joseph Daniels.

At least one elected official agreed. 

"Gov. Walker shouldn’t pop the cork on the champagne just yet. While unemployment is down, poverty is up, and that is not something anyone should celebrate," said Senator Lena Taylor (D-Milwaukee) in a written statement to TODAY'S TMJ4.

According to Daniels, the last confirmed full unemployment rate for Wisconsin was 8.3 percent. That number comes from the Bureau of Labor and Statistics.   

Noting that Milwaukee is the primary economic driver of the state, Daniel’s says that number also doesn’t discern among racial and ethnic groups.

“You will see that  African American unemployment was 9.6% and for African American men 10.3%. For the state of Wisconsin the respective numbers are 11.1% and 11.3%,” Daniels said.

That’s nearly three times the numbers the state released.

“I would assume any claimed record (by Wisconsin officials) will bring little comfort to African Americans in Wisconsin,” Daniels added.

University of Wisconsin-Milwaukee Economics professor Scott Adams agreed.

“Black unemployment remains very high. This 4.2% only includes those who are out of work and looking for a job, not those who have left the labor force, taken part-time jobs for economic reasons, are underemployed, etc.,”  Adams said.

Gov. Scott Walker fell short when it came to his top 2010 campaign promise -- that the state would add 250,000 private-sector jobs in his first term, reports PolitiFact.

State employers added an estimated 53,400 jobs in 2014, bringing the total numbers of new jobs for his four-year term to 146,795.

That's about 59 percent of the total Walker promised as a candidate, PolitiFact says.

TODAY'S TMJ4 reached out to Gov. Walker's office, but no one was available for comment.

A Marquette University Law School poll released Wednesday showed pessimism about the state's economy. The poll says 29 percent of respondents think Wisconsin's economy got worse over the past year while 25 percent say it improved and 44 percent think it has remained about the same.

Gov. Scott Walker blamed the poll results on the media, saying "headlines are always about negative and bad things."

TODAY'S TMJ4 also reached out to DWD officials. They released the following statement. 

It is important to look at multiple indicators to understand the complete picture of the state of Wisconsin's economy and workforce. Whether through monthly job estimates, quarterly wage data or Unemployment Insurance claims, the indicators show Wisconsin's economy is growing and adding jobs:

Wisconsin had the nation's sixth-highest rate of growth in average weekly private sector wages from December 2014 to December 2015, according to Quarterly Census of Employment & Wages data.
More people are employed in Wisconsin than ever before in state history.
The state unemployment rate of 4.2% is a half percentage point below the national rate of 4.7% and hasn't been this low since March 2001. This is the rate that the federal government publishes every month and is the most commonly cited rate across the country. The 8.3% rate attributed to Wisconsin in your story is below the comparable US rate of 10.4% and is the 13th lowest in the country, below Illinois (10.9%), Michigan (11.4%), Indiana (9%) and Ohio (10.1)%.
Our state's labor force participation rate outpaces the nation's by 6.1%.
Year 2016 initial Unemployment Insurance claims are at their lowest levels since 1989.
Wisconsin was one of only 10 states with an annual average unemployment rate in 2015 lower than 2007, the year that the Great Recession began.
Today's count has 88,903 job postings.