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Wednesday, May 23, 2012

Why Recall Scott Walker?

His job-creation claims are not credible

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Last week, Gov. Scott Walker rushed out new, unverified employment data showing the "good news" that the state added 23,321 jobs in 2011, or less than 1% of the 2.7 million jobs in Wisconsin.

But Walker's "good news" of barely perceptible job growth in 2011 contrasts with other employment data that was submitted by the Walker administration and vetted by the U.S. Department of Labor.

That verified data showed that Wisconsin under Walker was dead-last in job creation in 2011, with a loss of 33,900 jobs.

In fact, just a day after Walker's big jobs announcement, the U.S. Bureau of Labor Statistics (BLS) released data—submitted by the Walker administration, then vetted by the federal government—showing Walker's Wisconsin continues to lose jobs, with 6,200 private-sector jobs lost in April 2012.

Wisconsin was one of only seven states to lose non-farm jobs over the past year.

That said, the BLS figures show that Walker did create some jobs in April—500 new jobs in state government. But the added government jobs were offset by heavy losses in the private sector.

More than 205,000 people in Wisconsin were unemployed in April.

Walker had promised to create 250,000 private sector jobs in his first term, an average of 62,500 jobs per year. Even taking Walker at his word, he's helped to create less than half of the jobs he had promised to create in 2011.


Early Release to Prop Up Recall Campaign

Walker took the unprecedented step of releasing his more favorable job data before it was vetted by the U.S. Department of Labor, which will release the corrected numbers on June 28, three weeks after Walker's June 5 recall election.

Walker's data came from the Quarterly Census of Employment and Wages, which is collected from about 95% of the state's employers. Each state collects this data, then sends it to the federal government, which verifies it before releasing the data for every state. In this way, states can compare job growth or shrinkage, since they're all looking at the same data pool.

Since the BLS won't release the verified data for all 50 states until June 28—after Walker's recall election—there's no way of knowing how Walker's claim of 23,000 new jobs holds up to other states' employment trends.

But that didn't stop the Walker campaign from airing new ads in support of Walker's job-creation prowess right after Department of Workforce Development (DWD) Secretary Reggie Newson released them publicly.

Since the ads aired so quickly, the Democratic Party of Wisconsin filed a complaint with the state Government Accountability Board alleging that Walker's campaign ads were the product of illegal coordination between the state government and Walker's campaign.

"There is no way that Walker and [the Walker campaign] could have produced an ad without knowing the numbers from Newson ahead of time," the complaint states. "It is clear that Walker and [the Walker campaign] consulted with a state agency in order to craft a political message intended to support Walker's campaign."

Newson told a reporter that the DWD had not coordinated with Walker or his campaign.

On Friday, state Rep. Jon Richards (D-Milwaukee) sent an open records request to Walker, asking for a breakdown of where jobs were added, whether the jobs were private sector or government jobs and the industries that showed job growth.

Richards wrote in his letter, "Failing to do so should be viewed as nothing other than an admission that your job numbers are not based on solid, verifiable data that can withstand reasonable public scrutiny."



'Anemic'

The Quarterly Census of Employment and Wages isn't the only way to look at employment trends, of course.

Each month, the BLS releases employment figures based on surveys of 3.5% to 5% of the state's employers.

Those are the figures that, when compared to other states' job data, ranks Walker's Wisconsin dead-last in job creation in the past year, with 21,400 jobs lost between April 2011 and April 2012.

Not surprisingly, Walker is challenging those gloomy figures. He's being aided by the Milwaukee Journal Sentinel, which has bought Walker's argument that the standard BLS numbers are "disputed" and "controversial."

Another way to view the state's employment picture is through the Local Area Unemployment Statistics (LAUS), which draws from surveys of households. That survey shows that the unemployment rate has dropped in the past year, including one-tenth of one percent in April, from 6.8% to 6.7%.

James Peoples, economics professor at UW-Milwaukee, said the disparity in job data could be due to what kinds of information is collected by the surveys and payroll reports.

For example, Peoples said, the employer data released by the Walker administration indicates the number of jobs in the state. It doesn't indicate how many jobs are part-time or how many people hold more than one job or are entrepreneurs.

"I really think, to get it right, one would have to take months of digging into the data," Peoples said. "And by then you're onto another month of [data]."

Andrew Reschovsky, professor of public affairs and applied economics at UW-Madison's La Follette School of Public Affairs, said even if Walker's data holds up to scrutiny, Wisconsin's job growth is "anemic."

Reschovsky said he doubted Wisconsin would achieve Walker's goal of 250,000 new jobs within four years.

"It's hard at this point to believe that we could have such acceleration of growth," Reschovsky said.