Another Record Breaking Labor Market Builds Workers’ Power
With Wisconsin’s unemployment rate near historic lows and the number of jobs and workers reaching historic highs, Wisconsin’s labor market has had another record breaking year. Over the past 12 months, the state added 25,700 jobs to reach 3,035,100 jobs in July. This is down just slightly from the state’s record number of jobs – 3,048,000 – set in June. Job growth remains strong. This is also reflected in Wisconsin’s very low unemployment rate. Unemployment is currently 3.0% in July 2024 and has been below 3.5% since September 2021.
These record setting levels are consistent evidence of a strong economy. 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. Federal policy to invest and build in the U.S. has contributed to job growth and some policies are focused on raising job quality and worker power in the jobs created.
In response to economic opportunity, Wisconsin continues to have a relatively high labor force participation rate – 66.1% of working age people in Wisconsin are in the labor market compared to the national rate of 62.6%. 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.
While economic opportunity is high for workers in the state, it is distributed unequally. Racial and geographic disparities are pronounced. Wisconsin’s well-documented racial disparity remains substantial and gravely concerning. Matching national levels of disparity, Black workers in the state are twice as likely to be unemployed as white workers. Geographically, the county unemployment rates across the state are quite disparate ranging from a low of 2.4% to a high of 6.1%. Again, that is a substantial gap, but it is also the lowest disparity separating high and low unemployment counties in Wisconsin since data has been available in 1990.
The nation added fewer jobs than expected in July raising concerns about economic slowdown or even recession. At the same time, inflation has cooled from a high of 9.1% in June 2022 to a much more normal level, 2.9%, in July 2024. Together lower inflation and softening in job growth may convince the Federal Reserve Bank to lower interest rates in the coming months.
In June 2024, federal data from the Bureau of Labor Statistics showed that Wisconsin posted a record breaking number of jobs: 3,048,000. July 2024 jobs fell slightly, to 3,035,100. Even so, Wisconsin had 25,700 more jobs in July 2024 than it did 12 months before.
Wisconsin’s growth has lagged the national rate of recovery. J1 shows the trajectory of job recovery for Wisconsin and the nation. Wisconsin’s labor market growth outpaced the national rate early in the recovery but has lagged behind it since September 2021. Given the different rates of recovery, the national economy recovered to the pre-pandemic jobs threshold before Wisconsin did. Jobs are still growing faster nationally than in Wisconsin: since September 2021, the national job growth, jobs up 3.4%, is more than twice as fast as Wisconsin’s (1.4%).
J2 shows sectors recovering to pre pandemic levels, but lagging behind the national pace.
At this point in the recovery, most sectors have slightly higher employment than they did before the pandemic shutdown. Three exceptions where jobs have not fully recovered: state and local government, information, and leisure and hospitality. Wisconsin state and local government jobs remain 1.1% below the February 2020 level (even as the sector grew 2.1% nationally). The information sector remains 0.4% behind (compared to an increase of 3.1% nationally). Leisure and hospitality both nationally and in Wisconsin have stayed relatively stagnant. Jobs are just slightly down (0.7%) in the state, and slightly up (0.2%) nationally.
Perhaps just as concerning, since February 2020, several sectors that play an important role in the state economy saw sluggish growth in employment in Wisconsin compared to the national rate. The Professional and Business Services and Education and Health sectors saw weak growth of 2.2% and 2%, respectively, in Wisconsin. This is much slower than national job growth of 7.3% and 7.4% in these sectors. The relatively weak performance of these sectors, which collectively employ half of Wisconsin’s workers, may challenge economic development of the state.
Disparity in Unemployment by Race and Geography
Racial disparities in Wisconsin unemployment 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 J4, which provides estimates of unemployment rates racial and ethnic categories in the first three months of 2024 (Q1 2024). In Wisconsin, the unemployment rate for whites is just 2.3%, closely followed by Asian Americans and Pacific Islanders at 2.6%. Unemployment is more than twice as high for Black workers: 6%. For Hispanics, the unemployment rate of 4.4% is also higher than the white rate.
For decades, Black workers have been well over twice as likely to be unemployed as white workers in the state, and this ratio in Wisconsin has always substantially exceeded the national ratio of disparity. In 2023, with strong job employment growth among Black workers, Wisconsin saw the black-white unemployment gap begin to close, even outpacing the national trend. Progress on the Black/white unemployment gap appears to have stalled out in the first months of 2024 as Black unemployment rose just slightly (up 0.1%) and white unemployment fell slightly (down 0.1%).
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. J7 compares labor force participation in the U.S. and Wisconsin from 1979 to 2023. Wisconsinites have consistently shown a stronger attachment to work over the last 40 years, with the state’s 2023 labor force participation rate at 66.1 percent compared to the national rate of 62.6 percent.
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.
J8 shows that while Wisconsin reflects those national trends, workers in the state – both men and women – have historically shown a greater connection to work. In 2023, 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: Nearly 62 percent of Wisconsin women worked in 2023, compared to 57 percent of women nationally.
While Wisconsin womens’ labor force participation used to dramatically exceed national rates, in recent years, the gap is shrinking. We explore this issue and potential solutions to it in our feature on Women in the Workforce.
