dennis winters chief, office of economic advisors department of workforce development

Wisconsin is Open for Business

November 8, 2013

On the Other On the Other HandHand

Wisconsin Economic

Association

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Dennis WintersChief, Office of Economic Advisors

Department of Workforce DevelopmentNovember 8, 2013

On the Other HandOn the Other Hand

Wisconsin Economics Association


November 8, 2013


Wisconsin Economic

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Average Real GDP Growth First 9 Quarters of Recovery

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0Pe

rcent

2

ECONOMIC RECOVERYHOW IS THIS ONE NOT LIKE THE OTHER ONES


November 8, 2013


Wisconsin Economic

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Average Real GDP Growth First 9 Quarters of Recovery

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0Pe

rcent

9.2%

0%

5%

10%

15%

20%

25%

30%

1949 1954 1958 1960 1970 1975 1980 1982 1991 2001 2009

Real GDP Growth Sixteen Quarters into Recovery

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ECONOMIC RECOVERYHOW IS THIS ONE NOT LIKE THE OTHER ONES


November 8, 2013


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JOBS RECOVERYHOW IS THIS ONE NOT LIKE THE OTHER ONES


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Wisconsin Economic

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GDP = C + I + G + (I-M)


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RECESSION COMPARISONSLAGGING ACROSS ALL INDICATORS

19.421.4

26.7 27.5

38.3

14.1

5.3 6.3

0.5

15.1

3.1

-1.7-5.0

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

GDP Consumption Investment Exports Imports Government

Percent change

Average '60 - '012007 Recession

Source: William Testa, Federal Reserve Bank of Chicago


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It is difficult to increase consumptionwhen you:

1. have stagnant income,2. are losing wealth,3. paying down debt,4. increasing savings,5. and are paying more for food and gas.


November 8, 2013


Wisconsin Economic

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REAL ESTATE EQUITYGETTING A NICE REBOUND


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SECURITIES’ APPRECIATIONIS GETTING US BACK OVER THE HUMP


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MANAGING RISK WHERE IS THE INCENTIVE TO EXPAND


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135.0

140.0

145.0

150.0

155.0

160.0

'05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20

Actual

100 / Mo.

200 / Mo.

300 / Mo.

Thousands5.5%

6.5%

7.5%

8.5%

9.5%Q1 ‘15

Q1 ‘17

Unemployment rates assume a participation rate of 63.5%

JOBS GROWTH SCENARIOSCONTRAINTS ON ECONOMY

Source: William Testa, Federal Reserve Bank of Chicago


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WISCONSIN JOBS ARE SHOWING A STEADY CLIMB


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WISCONSIN MANUFACTURING JOBS ARE ALSO ON THE UPTICK


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WISCONSIN JOBS RECOVERYVERSUS PREVIOUS CYCLES

y = 0.0009x - 0.0822

-7.0%

-6.0%

-5.0%

-4.0%

-3.0%

-2.0%

-1.0%

0.0%

1.0%

2.0%

0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100

Perc

ent

Job

Lose

s S

ince

Rec

essi

on D

ecla

rati

on

Number of Months Since Recession Declaration

Wisconsin: QCEW Total Employment Change in the Last Three Recessions(QCEW data seasonally adjusted using the U.S. Census X12 program)

1990s recession2001 recession2007-2009 recession2010-Linear (2010-)

Estimated breach: July 2015


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AGE COHORTSTREATED DIFFERENTLY

Source: OEA, BLS

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Annual Average Unemployment Rate by Age - Wisconsin Total, 16+ Total, 16 to 19 yearsTotal, 20 to 24 years Total, 25 to 34 yearsTotal, 35 to 44 years Total, 45 to 54 yearsTotal, 55 to 64 years Total, 65 years and over


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Wisconsin Economic

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EDUCATION AND EMPLOYMENT STEADIER WORK


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Wisconsin Economic

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NONFINANCIAL CORPORATIONSHAVE RECOVERED VALUE


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OVERALL NON-CORPORATE PRIVATEBALANCE SHEET IMPROVING


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Wisconsin Economic

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FEDERAL GOVERNMENT DEBTON THE OTHER HAND


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Wisconsin Economic

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SWAPPING SECURITIES FOR CASH


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21Source: Federal Reserve Board, Data Download Program

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$0

$500

$1,000

$1,500

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t-11

Reserves of Depository Institutions(billions of dollars)

Required Reserves

Total reserves

EXTENDING CREDITBANKS ARE RETICENT TO LEND FUNDS


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STATE & LOCAL GOVERNMENTSHAVE LARGELY RECOVERED


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STATE AND LOCAL SPENDING ON A NEW TRAJECTORY


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Wisconsin Economic

Association

He said,

She said.


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HE SAID,HEY BABE, LOOK THE ECONOMY IS GROWING NICELY


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Wisconsin Economic

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SHE SAID,WE STILL HAVE A WAYS TO GO, DEAR


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HE SAIDLOOK HONEY, HOUSING MARKET IS UP NICELY


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Wisconsin Economic

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SHE SAIDSWEETHEART, WE’RE NEVER GETTING BACK THERE


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HE SAID,SUGAR, JOBS ARE CLIMBING

thou

sand

s


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SHE SAID,DARLING, DON’T PISS OFF YOUR BOSS


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HE SAID, LOVE, THEY’RE JACKING UP WAGES EVERYWHERE

• The minimum wage will increase in 10 states on January 1, 2013.

• Employers to be more generous with pay raises next year, CNNMoney.

• An improving job market is boosting wages, Herald and News.

• SHRM consensus is for an average budget increase of 3 percent.

• Hay Group says 3 percent salary increases in 2013.


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Wisconsin Economic

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SHE SAID, JIM, GET A GRIP


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HE SAID, DREAMBOAT, WE’RE GONNA BE RICH

INCOME GROWTH(Q1:2010 – Q3:2012)

Source: BEA, OEA


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SHE SAID,WILL YOU WAKE UP AND SMELL THE COFFEE


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Who is in

demand?


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Wisconsin Economic

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*Job Openings includes both turnover and new jobs that are created.

MOST JOB OPENINGSBY OCCUPATION


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MOST JOB OPENINGSON JOB CENTER OF WISCONSIN


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MOST OFTEN HEARD POSITION CHALLENGESCHARACTERISTICS

OccupationAnnual % Growth

Growth Openings

Replacement Openings

Total Openings

Typical Entry Education

Median Wage

Heavy truck drivers 1.90 9,490 9,040 18,530 H.S. diploma $38,300

Welders 1.50 1,840 3,010 4,850 H.S. diploma $37,980

Customer service representatives

1.50 7,760 14,180 21,940 H.S. diploma $31,430

CNC machine operators 2.20 1,310 1,020 2,330 H.S. diploma $35,860

Maintenance workers, machinery

0.70 180 440 620 H.S. diploma $39,460

CNC machine operators 2.20 1,310 1,020 2,330 H.S. diploma $35,860

Nursing aides 1.50 6,300 4,900 11,200 Postsecondary $25,020

Registered nurses 2.20 13,780 10,450 24,230 Associate’s

degree$62,860

Mechanical engineers 0.70 470 2,010 2,480 Bachelor’s

degree$68,340

Food preparation and serving workers

2.30 15,360 17,140 32,500 < high school $17,910


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WHAT TRAINING TO PURSUEFIVE MAKE ALL THREE LISTS

Make all three lists Total OpeningsTypical Entry

EducationMedian Wage

Food preparation 32,500 < high school $17,910

Customer service 21,940 H.S. diploma $31,430

Registered nurses 24,230 AD/BS $62,860

Heavy truck drivers 18,530 H.S. diploma $38,300

Health care aides 11,200 Postsecondary $25,020

Make two lists

Welders 4,850 H.S. diploma $37,980

Material Movers 38,900 H.S. diploma $23,590

Retail sales 69,030 < high school $20,570


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Questions ?


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Wisconsin Economic

Association

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Dennis Winters

Phone: 608-267-3262

Email: [email protected]

Website: www.dwd.wisconsin.gov

OEA website: www.dwd.wisconsin.gov/oea

CONTACT INFORMATION

dennis winters chief, office of economic advisors department of workforce development

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