Jobs: State of Working Wisconsin 2023

Record breaking labor market builds workers’ power.

With Wisconsin’s unemployment rate dipping to historic lows and the number of jobs and workers reaching historic highs, Wisconsin’s labor market has had a record breaking year. Over the past 12 months, the state added 39,500 jobs to reach the record high of 3,007,200 jobs in July. In the same time, Wisconsin’s unemployment rate, currently 2.6%, has hovered around or below 3% and posted record lows in April and May (2.4%).

These record setting levels are consistent evidence of a strong economy and good news for workers. Sustained job growth and low unemployment rates increase workers’ bargaining power. Workers can leverage abundant opportunities by leaving their jobs for better opportunities or using the credible threat of leaving to secure improvements in the jobs they hold.

Opportunity is not distributed equally across population and geography in the state. Racial disparity in the state remains substantial and gravely concerning, but sustained economic growth is also helping to narrow the racial and ethnic gaps. For example, over the last year in Wisconsin, white unemployment (2.4%) held steady while Black unemployment fell from 5.8% to 4.7%.

Workers have responded. Wisconsin continues to have a relatively high labor force participation rate (65.5% in Wisconsin compared to 62.6% for the US). Engagement with work is above national levels for both women and men in the state, but Wisconsin’s womens’ relative advantage over the national rate appears to be shrinking. The state’s decreasing investment in child care is likely to further challenge working women in this state.

Jobs

With a year of low unemployment rates, workers have the security to seek better pay, schedules, and benefits.

Wisconsin Jobs Hit Record High

In July 2023, federal data from the Bureau of Labor Statistics showed that the Wisconsin economy posted a record breaking number of jobs: 3,007,200. Wisconsin’s labor market is now larger than it has ever been and larger than it was before the pandemic shutdowns of spring 2020. In the last 12 months, the state added 39,500 jobs showing strength despite very low unemployment rates.

Wisconsin’s growth has lagged the national rate of recovery. J.1 shows the trajectory of job recovery for Wisconsin and the US. Wisconsin’s labor market growth outpaced the national average early in the recovery but has lagged behind it since February 2022. Given the different rates of recovery, the national economy recovered to the pre-pandemic jobs threshold a year before Wisconsin did.

J.1 Total Non-Farm Employment Index: US and Wisconsin, January 2020 to July 2023 (February 2020=100)

J.2 shows differences in job growth by sector.

In the pandemic shutdown, the Leisure and Hospitality sector faced the most intense changes. Shedding nearly half its jobs in March 2020, the sector has had a dramatic recovery but still holds fewer jobs than before the pandemic. Workers in this sector faced the most intense unemployment at the beginning of the pandemic, suffering that piled on top of the low wages, insufficient and volatile hours, and few benefits that these jobs tend to offer. While the underlying structure of these jobs is still a challenge, national evidence suggests that workers are securing increases in wages and hours of work. As the recovery has gone on, this sector no longer stands out.

At this point in the recovery, other sectors are showing troubling trends in Wisconsin. Perhaps most remarkable is the 8.3% decline in information jobs in the state since February 2020. Over the same period, information jobs grew by 5.7% nationally. Additionally, Wisconsin’s growth in Professional and Business services (1.6%) appears anemic compared to the national growth of jobs (7.4%). Finally, Wisconsin’s Government Sector is also underperforming national trends. Taken together, weakness in these sectors – which tend to have high job quality and jobs for college graduates – presents an economic development challenge for the state.

J.2 Employment Change by Sector, February 2020 to July 2023, Wisconsin and the US

Unemployment at record lows help workers improve jobs

Over the last year, Wisconsin’s unemployment has fallen to historic lows. As J.3 makes clear, Wisconsin’s unemployment rate is lower than the national rate, and continues to slowly shift down. From a rate of 3.1% last September, Wisconsin unemployment fell below 3% in 2023 and has stayed low, registering the historic low of 2.4% in both April and May. In July, the rate was 2.6%. These are remarkably low rates of unemployment and good news for the state.

Sustained low unemployment rates are not only good news for those who are looking for work. Obviously there are fewer workers seeking jobs, and they have more opportunities to pursue as they look for work. Importantly, low unemployment also allows workers a sense of security and leverage in the jobs they hold. With a year of low unemployment rates, workers have the security to seek better pay, schedules, and benefits. The low unemployment rates are one way to increase workers’ bargaining position in their jobs.

J.3 Unemployment Rate, Wisconsin and US, January 2021 – July 2023

Unemployment disparities are substantial, but closed over the last year

Racial disparities in the state are substantial with Black and brown workers much more likely to be unemployed than whites in the state. The disparity between Black and white workers has been extreme, and we have documented the high level of disparity, especially in unemployment in previous editions of the State of Working Wisconsin. (See Race in the Heartland for a summary of Wisconsin’s extreme racial disparity.)

Disparity in unemployment is evident in J.4, which provides estimates of unemployment rates racial and ethnic categories in the first three months of 2023 (Q1 2023). In Wisconsin, the unemployment rate for whites is just 2.4% and even lower for Asian Americans and Pacific Islanders at 2.1%. Unemployment is nearly twice as high for Black workers: 4.7%. For Hispanics, the unemployment rate of 3.3% is also higher than the white rate.

J.4 Unemployment rates by race and ethnicity Wisconsin and US Q1 2023 — Source: EPI analysis of Bureau of Labor Statistics Local Area Unemployment Statistics (LAUS) data and Current Population Survey (CPS) data.

J.5 Change in unemployment by race and ethnicity Wisconsin and US, (percentage) percentage point change, 2020 Q1 to 2023 Q1 — Source: EPI analysis of Bureau of Labor Statistics Local Area Unemployment Statistics (LAUS) data and Current Population Survey (CPS) data.

Equally remarkable, given the long history of extreme disparity, is the decline in the Black/white unemployment gap. For decades, Black people have been well over twice as likely to be unemployed as white workers in the state, and this ratio has always substantially exceeded the national ratio of disparity. There is good news in these estimates which show that for Q1 2023, unemployment was lower for Black people in Wisconsin than the national average. Over the last year, the Black unemployment rate fell by 1.1 percentage points, even as the white rate stayed constant. As a result, Black and white unemployment is actually less disparate than the national racial gap. Given years of analysis of racial disparities, this closing of the gap warrants attention. To be sure, the disparity is still unacceptably high, but the direction of the trend is good news in Wisconsin. Sustained low unemployment in the state appears to be reducing the pronounced gap in unemployment rates.

Opportunity and unemployment show geographic variation as well. In June 2023, eleven counties had unemployment rates below 3 percent. At the other extreme, unemployment is above 5 percent in two counties. J.6 shows the range of unemployment rates across counties in the state. The geographic variability of unemployment provides evidence that not all counties have the same level of opportunity. But, as with racial and ethnic disparity, sustained low unemployment means that there is less range in unemployment this year than even a year ago.

J.6 Wisconsin Unemployment Rate by County, June 2023

Wisconsinites are Committed to Work

Wisconsin’s labor force participation rate has been higher than the national average since 1979.

One way Wisconsin’s commitment to work is evident is in its share of working age people who are in the labor force. J.7 compares labor force participation in the US and Wisconsin from 1979 to 2022. Wisconsinites have consistently shown a stronger attachment to work over the last 40 years, with the state’s 2022 labor force participation rate at 64.5 percent compared to the national rate of 62.2 percent.

J.7 Labor Force Participation Wisconsin and US 1979-2022 — Source: Economic Policy Institute analysis of Current Population Survey microdata from the U.S. Census Bureau

Labor force participation by gender, 1979-2022 — Source: Economic Policy Institute analysis of Current Population Survey microdata from the U.S. Census Bureau

While Wisconsin womens' labor force participation used to dramatically exceed national rates, in recent years, the gap is shrinking...

Women in Wisconsin are especially committed to work.

Over the last 40 years, men’s labor force participation has been declining while women’s participation rose substantially from 1979-1999 and then drifted down in recent years.

J.8 shows that while Wisconsin reflects those national trends, workers in the state – both men and women – have historically shown greater connection to work. In 2022, 70 percent of Wisconsin’s men participated in the labor force (higher than the national 68 percent rate).

Wisconsin women’s labor force participation is also consistently above national rates of participation: 59 percent of Wisconsin women worked in 2022, compared to 57 percent of women nationally. One concern is clear. While Wisconsin womens’ labor force participation used to dramatically exceed national rates, in recent years, the gap is shrinking. This makes the state legislature’s lack of investment in child care infrastructure in the state especially troubling, as it is often women who carry a disproportionate burden of care for children.