Higher wages do not translate into buying power for Wisconsin’s average hourly earners
According to those folks in the Wisconsin Government, they will tote and claim that “wage rates” are up. While certainly not the worst in our country, Wisconsin actually ranks 36th out of every state in our country in terms of actual take-home wages for the average person which is still nearly $7,000 below the national average of the same demographic. That means on average, an hourly wage worker only makes $37,371/year in most cities and towns across our state or $18/hr. This doesn’t account for much given the current rate of inflation and the soaring cost of goods and the diminished buying power of most Wisconsinites.
The current CPI-W rate (Consumer Price Index for Urban Wage Earners) has risen nearly 0.5% (6.2%=>6.8%) over the last year since Covid Pandemic was declared over with the Core CPI Inflation rate being reported to have increased a further 0.3% (4.6% => 4.9%) in the same period of time.
This also follows a raise in our state’s labor participation rate of nearly an entire percentage point (65.5% => 66.4%) and that was after Wisconsin had declared itself “reopened” and recovered. Prior to Governor Ever’s seating as our governor, the rate was not much higher and has since stayed the same except for a single month, during 2020 (September where there was an influx of workers due to cancelation/expiration of the covid recovery dollars and distribution of the federal relief funding. This influx did not last once workers began losing their jobs due to vax requirements, not mandated but imposed by the larger employers in the retail and manufacturing sectors in our state.
Pre-pandemic Wisconsin was already experiencing a downturn in LPR and still has not recovered from that with nearly 3% of the state’s population never returning to the labor pool. We are currently below that with only a slight bump and that was largely due to seasonal workers during the holiday months from July 2021 to September 2021 as well as the end of November to the end of December 2021.
Those workers have since been sent home and are assumed that the rate will drop further now with increasing layoffs and firing due to vax mandates by larger employers in retail, medical, education, and manufacturing.
It is this stagnation and slight drop which is currently affecting our hourly labor rates and driving that wage up. Normally, this would be a good thing and celebrated, but due to the national supply shortage and restrictions imposed for environmental agendas, this has resulted in nearly 1.25% since the start of the year and is estimated to double over the next 3 months. That means normal Wisconsin residents making the average hourly wage are now paying at least 3% more for the goods they consume with the forecasted increases expected to reach 4.3% by June of 2022.
The overall effect is more workers are leaving the workforce as employment rises and UI benefits expire. Tony Ever’s however is still out there touting his “tax cuts” which didn’t result from his own economic policy which has since failed. These tax cuts also did not translate into lower taxable amounts for average hourly employees, leaving them in limbo as their bottom line gets stretched further and their cost of living rises on everything from new leases, gas prices, and increased food costs.
With UI benefits expiring, there is an increased demand for relief from Madison which is showing no signs of coming leading into the end of the 2021 tax year.
Many of the Ever’s supporting news outlets are making claims about how much better the unemployment rate is but despite the compounding fact that we still have not returned to pre-pandemic rates. UI claims are only typically counted when they are new and do not include existing or lapsed claims of those folks who no longer can receive them or are no longer eligible for them. Almost 35% of all Wisconsinites remain unemployed and that figure is only expected to get worse as companies face higher costs of doing business and material shortages.
We can only hope that a candidate running for Governor can or has a plan to put folks back to work and mitigate the barriers holding employers back from expanding operations and increasing their employee counts.
There is currently no plan being proposed from Madison which has any certainty of success. Statehouse Republicans have proposed distributing funds into public sector job markets such as law enforcement in order to curb the violence we are seeing within our larger cities however are uneasy with voting on the dispersal of those funds, no longer confident in Governor Ever’s intentions to use those funds in for the state republicans intentions of providing relief and further funding to police departments.