WHAT JUST HAPPENED
AND
Wisconsin’s
Economic Outlook
WHERE DO WE GO FROM HERE?
Wisconsin
Economics
Association
December 3, 2010
Dennis K. Winters
Chief, Office of Economic Advisors
Wisconsin Department of Workforce Development
December 3, 2010
WELCOME
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
2
FIRST, YOU HAVE TO UNDERSTAND
WISCONSIN’S ECONOMY
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
http://flowingdata.com/2010/03/02/where-bars-trump-grocery-stores/
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
HOW
BAD
WAS IT?
HOW BAD WAS IT?
THINGS THAT NEVER HAPPENED BEFORE
Wisconsin’s
Economic Outlook
• Longest recession since the Great Depression
• Four negative U.S. GDP quarters in a row
• Global GDP declined
• The U.S. and Japan were in recession at same time
Wisconsin
Economics
Association
December 3, 2010
• Personal consumption expenditures were down 3 out
of four quarters, with the one registering just +0.1%
5
INDUSTRIAL ACTIVITY PLUNGED
U.S. AND ESPECIALLY THE MIDWEST
Wisconsin’s
Economic Outlook
Manufactuing Production Indexes
130
120
110
100
Midwest
U.S.
90
80
70
Wisconsin
Economics
Association
60
50
40
30
Jan-73
December 3, 2010
Jan-82
Source: Chicago Fed, OEA
Jan-91
Jan-00
Jan-09
6
EMPLOYMENT DROPPED PRECIPITIOUSLY
JOB LOSSES WORSE THAN 1981 RECESSION
Total NonFarm Y/Y Job Growth
(unadjusted)
6.0%
Wisconsin’s
Economic Outlook
Growth over 12 Months
4.0%
Wisconsin
Economics
Association
2.0%
0.0%
Wisconsin
-2.0%
U.S.
-4.0%
December 3, 2010
Source: Bureau of Labor Statistics, LMI, OEA
Jan-11
Jan-10
Jan-09
Jan-08
Jan-07
Jan-06
Jan-05
Jan-04
Jan-03
Jan-02
Jan-01
Jan-00
Jan-99
Jan-98
Jan-97
Jan-96
Jan-95
Jan-94
Jan-93
Jan-92
Jan-91
-6.0%
7
UNEMPLOYMENT CLIMBED
NOT QUITE TO LEVELS OF 1981 RECESSION
Wisconsin’s
Economic Outlook
Unemployment Rates
(seasonally adjusted)
12
11
Wisconsin
10
U.S.
Percent
9
8
7
6
Wisconsin
Economics
Association
5
4
December 3, 2010
Source: Bureau of Labor Statistics, LMI, OEA
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1987
1986
1985
1984
1983
1982
1981
1980
1979
1978
1977
1976
3
8
WORKERS DROPPED OUT OF THE WORKFORCE
“MARGINAL” WORKER
U6 - U3 Difference
Wisconsin’s
Economic Outlook
10%
9%
Jan 2010
U3 = 9.7%
U6 = 17.6%
8%
7%
6%
5%
4%
3%
December 3, 2010
J-10
S-09
M-09
J-09
S-08
M-08
J-08
S-07
M-07
J-07
S-06
M-06
J-06
S-05
M-05
2%
J-05
Wisconsin
Economics
Association
Source: U.S. DOL, WI Dept. of Workforce Development; Local Area Unemployment Statistics and National Bureau of Economic Research
9
DURATION OF FINDING NEW JOB
IS PROTRACTED
Average Weeks Unemployed
Wisconsin’s
Economic Outlook
35
30
25
20
15
December 3, 2010
Source: U.S. Dept. of Labor, Bureau of Labor Statistics and National Bureau of Economic Research
Jan 2008
Jan 2003
Jan 1998
Jan 1993
Jan 1988
Jan 1983
Jan 1978
Jan 1973
Jan 1968
Jan 1963
Jan 1958
5
Jan 1953
10
Jan 1948
Wisconsin
Economics
Association
10
WORKER ANGST DIDN’T DECREASE
JUST SHIFTED
CUIC State and Fed Extentions
Wisconsin’s
Economic Outlook
350,000
WI CUIC
300,000
Fed Exts
Total
250,000
200,000
150,000
Wisconsin
Economics
Association
100,000
50,000
0
2008w1 2008w14 2008w27 2008w40 2009w1 2009w14 2009w27 2009w40 2010w1 2010w14 2010w27 2010w40
December 3, 2010
Source: UI, OEA
11
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
YES VIRGINIA,
WE ARE IN
RECOVERY MODE,
BUT…
BOTH MAJOR SECTORS RECOVERING
MANUFACTURING AND NON-MANUFACTURING
Industry Indexes
Wisconsin’s
Economic Outlook
70.0
65.0
60.0
55.0
50.0
45.0
Wisconsin
Economics
Association
Non-Manufacturing
Manufacturing
40.0
35.0
30.0
7
l-9
u
J
December 3, 2010
8
l-9
u
J
9
l-9
u
J
0
l-0
u
J
Source: St. Louis Fed, OEA
1
l-0
u
J
2
l-0
u
J
3
l-0
u
J
4
l-0
u
J
5
l-0
u
J
6
l-0
u
J
7
l-0
u
J
8
l-0
u
J
9
l-0
u
J
0
l-1
u
J
13
HOW DO YOU SPELL
RECOVERY?
Wisconsin’s
Economic Outlook
• GDP
• DJIA
Wisconsin
Economics
Association
December 3, 2010
• JOBS
14
HOW DO YOU SPELL RECOVERY?
GDP; Five positive quarters, Q3 up 2.5%
Real GDP Growth
Wisconsin’s
Economic Outlook
10.0
8.0
6.0
Percent
4.0
Wisconsin
Economics
Association
2.0
0.0
-2.0
-4.0
-6.0
-8.0
2000q1
December 3, 2010
2002q1
2004q1
Source: Bureau of Economic Analysis, OEA
2006q1
2008q1
2010q1
HOW DO YOU SPELL RECOVERY?
DJIA; UP 72% SINCE MARCH 9, 2009
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
Source: http://moneycentral.msn.com/investor/charts/chartdl.aspx
HOW DO YOU SPELL RECOVERY?
JOBS; STILL DOWN 150,000
Wisconsin Total Nonfarm Jobs (NSA)
Wisconsin’s
Economic Outlook
2,950,000
2,900,000
2,850,000
2,800,000
2,750,000
Wisconsin
Economics
Association
2,700,000
2007
2008
2009
2010
2,650,000
2,600,000
Jan
December 3, 2010
Feb
Mar
Apr
May
Source: Bureau of Labor Statistics, LMI, OEA
Jun
Jul
Aug
Sep
Oct
Nov
Dec
17
JOB RECOVERY
WILL TAKE TIME
Job Losses in Recent Recessions - Wisconsin - # of Months Since Recession Declaration
1.0%
Wisconsin’s
Economic Outlook
0.0%
1
3
5
7
9
11
13
15
17
19
21
23
25
27
29
31
33
35
37
39
41
43
45
47
49
51
53
55
57
59
61
Job Losses Relative to Peak Month
-1.0%
Wisconsin
Economics
Association
-2.0%
-3.0%
-4.0%
1981 Recession
2001 Recession
1990 Recession
Current Recession
-5.0%
-6.0%
-7.0%
Source: DWD, OEA, X12 adjustment of not seasonally adjusted CES via U.S. BLS
December 3, 2010
Source: BLS, OEA
18
EVEN JOB NUMBERS CAN BE DECEIVING
THE UNDEREMPLOYED
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
19
CAUTION STILL REIGNS
MANAGING YEAR-END COSTS
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
20
NEW CLAIMS MOVING SIDEWAYS
INDUSTRIES CONTINUE TO ADJUST
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
21
Wisconsin’s
Economic Outlook
GDP = C + I + G + (I-M)
Wisconsin
Economics
Association
December 3, 2010
Wisconsin’s
Economic Outlook
C = CONSUMPTION
Wisconsin
Economics
Association
December 3, 2010
PERSONAL INCOME
NOT SNAPPING BACK LIKE BEFORE
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
24
RETAIL SALES CLIMBING
WHAT WILL BE THE NEW NORMAL
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
25
EVEN WITH LOW MORTGAGE RATES
NEW HOME SALES AREN’T RESPONDING
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
26
HOUSING MARKETS
WON’T BE AN ECONOMIC DRIVER
U.S. Housing Starts and Permits
Wisconsin’s
Economic Outlook
2,400
Thousands of units
2,000
Wisconsin
Economics
Association
1,600
1,200
800
400
2006
2007
Housing Starts
December 3, 2010
Source: Wisconsin Department of Revenue
2008
2009
2010
Housing Permits (3-Month Moving Average)
27
WHERE HAVE ALL THE YUPPIES GONE?
WHO WILL BUILD A NEW HOUSE NOW?
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
28
TAKE MY HOUSE
PLEASE
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
29
MORTGAGE RISK
STILL HAS CHALLENGES PENDING
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
ALL SECTORS OVERBUILT
RESIDENTIAL, COMMERCIAL, HEAVY
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
31
INTEREST IS LESS DISMAL
BUT STILL CONTRACTING
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
32
AUTO SALES
LIMITED CONTRIBUTION
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
33
FUTURE UNCERTAINTY
DAMPENS CONSUMER MOOD
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
34
IS THE PHILLIPS CURVE BACK?
IF YES, THEN FED HAS LEEWAY
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
35
Wisconsin’s
Economic Outlook
I = INVESTMENT
Wisconsin
Economics
Association
December 3, 2010
LOW INTEREST RATES
GAVE INCENTIVES TO BORROW
Wisconsin’s
Economic Outlook
All sectors
Wisconsin
Economics
Association
December 3, 2010
Domestic government sector
Source: William R. Emmons, Federal Reserve Bank of St. Louis, May 7, 2010 talk on the District II Economic Outlook
.
37
EXTENDING CREDIT
BANKS ARE RETICENT TO LEND FUNDS
Reserves of Depository Institutions
(billions of dollars)
Wisconsin’s
Economic Outlook
$1,400
Required Reserves
Total reserves
$1,200
$1,000
$800
$600
Wisconsin
Economics
Association
$400
$200
December 3, 2010
Source: Federal Reserve Board, Data Download Program
Jan 2010
Oct 2009
Jul 2009
Apr 2009
Jan 2009
Oct 2008
Jul 2008
Apr 2008
Jan 2008
$0
38
STILL UNCERTAIN
ABOUT ECONOMIC STRENGTH
Yield Spread: BAA Corporate Rate minus
10 Year Treasury Rate
Wisconsin’s
Economic Outlook
7.0
6.0
5.0
4.0
3.0
Wisconsin
Economics
Association
2.0
1.0
Jan
-88
Jan
-89
Jan
-90
Jan
-91
Jan
-92
Jan
-93
Jan
-94
Jan
-95
Jan
-96
Jan
-97
Jan
-98
Jan
-99
Jan
-00
Jan
-01
Jan
-02
Jan
-03
Jan
-04
Jan
-05
Jan
-06
Jan
-07
Jan
-08
Jan
-09
Jan
-10
0.0
December 3, 2010
Source: Prof. Don Nichols, Emeritus
39
MANAGING RISK
WHERE IS THE INCENTIVE TO EXPAND
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
CORPORATE PROFITS LOOK HEALTHY
MOSTLY DUE TO COST CUTTING
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
41
FROM WHERE ELSE
WILL PRIVATE INVESTMENT COME
Corp Profits as % National
Income
Wisconsin’s
Economic Outlook
12%
10%
8%
6%
Wisconsin
Economics
Association
4%
2%
December 3, 2010
Source: Prof. Don Nichols, Emeritus
09
20
07
20
05
20
03
20
01
20
99
19
97
19
95
19
93
19
91
19
89
19
87
19
85
19
83
19
81
19
79
19
19
77
0%
42
DEMAND STILL INSUFFICIENT TO EXPAND
WILL KEEP INFLATION AT BAY
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
43
Wisconsin’s
Economic Outlook
G = GOVERNMENT
Wisconsin
Economics
Association
December 3, 2010
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
Source: http://seekingalpha.com/article/115525-the-scariest-chart-ever?source=article_sb_popular
QE1
TRACK IT
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
http://money.cnn.com/news/specials/storysupplement/stimulus-tracker/index.html
QE2 = MORE MONEY
TO BE APPLIED WHERE?
• TARP
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
–
–
–
–
–
–
–
–
–
AIG
AGP
ASSP
AITP
CPP
CBLI
MHA
PPIP
TIP
• Fed Reserve Rescue Efforts
–
–
–
–
–
–
–
–
–
–
ABCPMMMFL
BoALLB
BSB
CLLB
CPFF
FEDS
GSEDP
GSEMBSP
MMIFF
PDCF
– TABSLF
December 3, 2010
– TAF
– TSLF
– US Bond purchases
47
QE2 = MORE MONEY (continued)
TO BE APPLIED WHERE?
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
• Federal Stimulus
Programs
–
–
–
–
–
–
ESA of 2008
UIBE
SLG
ARRA
ATVMP
CARS
• AIG
–
–
–
–
Asset purchases
Bridge loan
Gov’t stakes in subs
TARP
• FDIC
– 2008 Bank takeovers
– 2009 Bank takeovers
48
QE2 = MORE MONEY (continued again)
TO BE APPLIED WHERE?
• Other Financial Initiatives
Wisconsin’s
Economic Outlook
–
–
–
–
–
CUDIG
MMGP
NCUA Bailout of credit unions
USFCUI
TLGP
• Other Housing Initiatives
Wisconsin
Economics
Association
–
–
–
–
Fannie
Freddie
FHA
MHAI
$11 trillion committed
December 3, 2010
$3 trillion invested
http://money.cnn.com/news/storysupplement/economy/bailouttracker/#TARP
49
LONG-TERM RATES RELATIVELY HIGH
FED TRYING TO BRING THEM DOWN
Yield Curve: Yield on Ten Year Treasury minus
yield on One Year Treasury
Wisconsin’s
Economic Outlook
4
3
2
1
0
-1
Wisconsin
Economics
Association
-2
-3
December 3, 2010
Source: Prof. Don Nichols, Emeritus
201
0
200
8
200
6
200
4
200
2
200
0
199
8
199
6
199
4
199
2
199
0
198
8
198
6
198
4
198
2
198
0
-4
50
Wisconsin’s
Economic Outlook
I-M = NET EXPORTS
Wisconsin
Economics
Association
December 3, 2010
LOWER U.S. DEMAND
HELPING HOLD DOWN TRADE IMBALANCE
U.S. Goods and Services Trade Balance
Wisconsin’s
Economic Outlook
$-20
Billions
$-30
Wisconsin
Economics
Association
$-40
$-50
$-60
$-70
2007
December 3, 2010
Source: Wisconsin Department of Revenue
2008
2009
2010
52
LACK OF U.S. DEMAND
HELPING HOLD DOWN TRADE IMBALANCE
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
53
DOLLAR DROPPING
WHOSE SIDE ARE YOU ON?
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
54
ADD IT ALL UP
AND …
Wisconsin’s
Economic Outlook
GDP = C + I + G + (I-M)
Wisconsin
Economics
Association
December 3, 2010
RECOVERING
BUT STILL LOWER
U.S Gross Domestic Product
(Real 2005 U.S. Dollars)
14,000
Billions
Wisconsin’s
Economic Outlook
13,000
12,000
11,000
10,000
9,000
8,000
7,000
Wisconsin
Economics
Association
6,000
5,000
December 3, 2010
Source: U.S. Bureau of Economic Analysis
q1
20
08
q1
20
04
q1
20
00
q1
19
96
q1
19
92
q1
19
88
q1
19
84
q1
19
80
q1
76
19
19
72
q1
4,000
BIGGEST DIP, SLOWEST RECOVERY
TWELVE Q’s SINCE LAST PEAK, STILL NOT BACK
Time from Peak to New High
3%
Wisconsin’s
Economic Outlook
% of previous GDP peak
2%
Wisconsin
Economics
Association
1%
0%
-1%
1948
1953
1957
1960
1969
1973
1980
1981
1990
2001
2007
-2%
-3%
-4%
-5%
Q1
December 3, 2010
Q2
Q3
Q4
Source: U.S. Bureau of Economic Analysis; OEA
Q5
Q6
Q7
Q8
Quarters
Q9
Q10
Q11
Q12
Q13
IN CONCLUSION
TORTOISE RECOVERY
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010




Slow but sturdy recovery
Low inflation due to excess capacity
Employment breach in 2012?
Strength of recovery subject to consumer
income and wealth uncertainty
Risks
 Financial workouts put too much strain on
economy.
 European Union fiscal problems wash
over the global financial markets.
 High unemployment saps consumption.
58
Wisconsin’s
Economic Outlook
So, what will be the
biggest socio-economic
policy challenge
in the next 20 years?
Wisconsin
Economics
Association
December 3, 2010
59
ELDERLY NUMBERS WILL SWELL
WIDEN THE SIDEWALKS WILL YA !?
Wisconsin’s
Economic Outlook
Wisconsin
Economics
Association
December 3, 2010
60
Wisconsin’s
Economic Outlook
QUANTITY
Wisconsin
Economics
Association
December 3, 2010
WISCONSIN’S WORKFORCE GROWTH
BECOMES FLAT
Wisconsin Population and Labor Force
Wisconsin’s
Economic Outlook
7,000
POPULATION
6,000
CIVILIAN LABOR FORCE
( x 1000 )
5,000
4,000
3,000
Wisconsin
Economics
Association
2,000
1,000
1960
December 3, 2010
1970
1980
Source: Bureau of Labor Statistics, OEA
1990
2000
2010
2020
2030
62
BLS RAISED LFPR FOR THE FUTURE
PARTICULARLY FOR OLDER COHORTS
Changes in LFPR by Age Cohort
Wisconsin’s
Economic Outlook
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
Constant
2000
2010
2020
2030
30.0%
Wisconsin
Economics
Association
20.0%
10.0%
0.0%
16-19
December 3, 2010
20-24
25-34
35-44
45-54
55-59
60-64
Source: Bureau of Labor Statistics, Bureau of the Census, OEA
65-69
70-74
75+
63
WISCONSIN’S WORKFORCE
HIGHER LFPRs OFFER LIMITED GAINS
Wisconsin’s
Economic Outlook
Worker Difference from Census 2000
140,000
120,000
100,000
80,000
60,000
40,000
Wisconsin
Economics
Association
20,000
(20,000)
December 3, 2010
2010
2010
2020
2020
2030
2030
New BLS
Plus 3%
New BLS
Plus 3%
New BLS
Plus 3%
Source: Bureau of Labor Statistics, OEA
64
LITTLE CHANGES EVEN WITH HIGHER LFPR
RETIREMENTS SWAMP PARTICIPATION
Wisconsin Population and Labor Force
Wisconsin’s
Economic Outlook
7,000,000
Population
Labor force base case
BLS prj. change
Elevated LFPR of 3 percentage points
6,000,000
5,000,000
4,000,000
3,000,000
Wisconsin
Economics
Association
2,000,000
1,000,000
1960
December 3, 2010
1970
1980
Source: Bureau of the Census, DOA, OEA
1990
2000
2010
2020
2030
65
NURSING WORKFORCE IN WISCONSIN
DEMOGRAPHICS AT WORK
Wisconsin Nurses by Age
Wisconsin’s
Economic Outlook
14,000
12,000
10,000
8,000
6,000
Wisconsin
Economics
Association
4,000
2,000
0
< 25
December 3, 2010
25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74
75 +
Source: Office of Economic Advisors
66
Wisconsin’s
Economic Outlook
QUALITY
Wisconsin
Economics
Association
December 3, 2010
Data:
March Supplement of CPS, 1992-2007 (via IPUMS)
Population projections from DOA
Wisconsin’s
Economic Outlook
Age Groups:
Wisconsin
Economics
Association
December 3, 2010
15-24
25-34
35-44
45-54
55-64
65-74
over 75
Education Categories:
Less than high school
High school graduate
Some college, no degree
Associate degree,
Bachelor’s degree,
Graduate or Professional degree
Income Categories:
Earnings
Transfer payments
Dividends (interest, rent, and other income)
Total income
68
AS BOOMERS RETIRE
INCOME COMPONENTS CHANGE
Year: 2000
7.6%
Income stream shifts with
age from earned income
to transfer payments.
Wisconsin’s
Economic Outlook
10.3%
82.1%
Earnings
Transfers
Dividends
6.9%
Wisconsin
Economics
Association
December 3, 2010
Real escalation in transfer
payments is near zero –
essentially eliminating gains
from this income source.
Source: 1992-2007 CPS (Wisconsin) & DOA Pop Projections
18.5%
Year: 2035
74.6%
AGGREGATE REAL INCOME GROWTH
FLATTENS WITH WORKFORCE AND SOURCE
Aggregate. Real Income
Historic 1992-2007, and Projected 2010-2035
Billions
Wisconsin’s
Economic Outlook
$200
$175
Historic
$150
Version 2.0
Wisconsin
Economics
Association
$125
$100
1992
December 3, 2010
1997
2002
2007
2012
Source: 1992-2007 CPS (Wisconsin) & DOA Pop Projections
2017
2022
2027
2032
70
UNDER BASE CASE ASSUMPTIONS
PCI DECREASES STARTING IN 2015
Wisconsin’s
Economic Outlook
Graph 1: Population vs Agg Real Income Change,
1995-2035
25%
Pop 15+ Change
Agg Income Change (Base)
20%
15%
10%
5%
Wisconsin
Economics
Association
0%
-5%
19952000
December 3, 2010
20002005
20052010
20102015
20152020
Source: Bureau of Labor Statistics, Bureau of the Census, OEA
20202025
20252030
20302035
LAYING IN EDUCATION PROJECTIONS
TO ACCOUNT FOR ATTAINMENT TRENDS
15-24
Wisconsin’s
Economic Outlook
50.0%
25.0%
0.0%
Less HS
HS
Some
AA
BA
Grad
25-34
50.0%
25.0%
December 3, 2010
25.0%
2034
2031
2028
2025
2022
2019
2016
2013
2010
2007
0.0%
2004
199
2
199
7
200
2
200
7
201
2
201
7
202
2
202
7
203
2
0.0%
45-54
2001
25.0%
Less HS
HS
Some
AA
BA
Grad
1998
Wisconsin
Economics
Association
35-44
1995
50.0%
50.0%
1992
199
2
199
7
200
2
200
7
201
2
201
7
202
2
202
7
203
2
19
92
19
94
19
96
19
98
20
00
20
02
20
04
20
06
20
08
20
10
20
12
20
14
20
16
20
18
20
20
20
22
20
24
20
26
20
28
20
30
20
32
20
34
0.0%
72
WE GET A BOOST IN PERSONAL INCOME
FROM MORE EDUATION AND TRAINING
Aggregate Real Income
Historic 1992-2007, and Projected 2010-2035
Billions
Wisconsin’s
Economic Outlook
$200
$175
Historic
$150
Version 2.0
Version 3.0
Wisconsin
Economics
Association
$125
$100
1992
December 3, 2010
1997
2002
2007
2012
Source: 1992-2007 CPS (Wisconsin) & DOA Pop Projections
2017
2022
2027
2032
73
THE INCOME BOOST ONLY DELAYS
THE PCI LOSS FOR A FEW YEARS
Wisconsin’s
Economic Outlook
Graph 1: Population vs Agg Real Income Change,
1995-2035
25%
20%
Pop 15+ Change
Agg Income Change (Base)
Agg Income Change (New )
15%
10%
5%
Wisconsin
Economics
Association
0%
-5%
19952000
December 3, 2010
20002005
20052010
20102015
20152020
Source: Bureau of Labor Statistics, Bureau of the Census, OEA
20202025
20252030
20302035
74
WORKFORCE TRENDS
ARE:
Wisconsin’s
Economic Outlook
 Unprecedented – we have never faced a
declining workforce before;
 Assured – demographics will change little;
 Largely unalterable – demographics and
migration patterns do not change abruptly.
Wisconsin
Economics
Association
December 3, 2010
75
RAMIFICATIONS OF WORKFORCE TRENDS
ARE:
Wisconsin’s
Economic Outlook
 Potentially devastating – without sufficient
productivity gains the state’s economy will
stagnate;
 Necessitating a focus on talent – large
investments in education and training are
needed; best ROI is early childhood
Wisconsin
Economics
Association
December 3, 2010
 Requiring match – talent supply and industry
demand must be matched or you lose both.
76
Wisconsin’s
Economic Outlook
QUESTIONS?
Wisconsin
Economics
Association
December 3, 2010
77
CONTACT INFORMATION
Wisconsin’s
Economic Outlook
 Dennis Winters
 Phone: 608-267-3262
 Email: dennis.winters@dwd.wisconsin.gov
Wisconsin
Economics
Association
December 3, 2010
 Website: www.dwd.wisconsin.gov
 OEA website: www.dwd.wisconsin.gov/oea
78