Labor in the Stateline Counties
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There has been a noted improvement in the general employment picture within the Stateline Region. The measure of improvement is based on the sheer number of jobs and the level of unemployment. Table 1 provides quarterly information on the labor force and the proportion of the labor force that is employed and unemployed. The aggregate size of the labor pool can increase or decrease. This can occur as a result of changes in the size of the pool of available labor itself (caused by factors such as population increases), but can also increase or decrease with changes in hidden unemployment. When people report they are not employed or looking for work on surveys of employment, this can be because they’ve essentially stopped looking even though they would like to work. This is hidden unemployment, or the discouraged worker effect. Unfortunately, the data does not specify which of these effects is changing the size of the labor force. As a result, it is speculation as to which force (changes in population vs. changes in hidden unemployment) is driving changes.
Also presented in the table is information regarding the percentage change over the previous year for the most recent quarters for which data is available as of this writing. County-level data is not seasonally adjusted. Unemployment rates have regular seasonal swings related to holidays, harvests and a plethora of other regular ups and downs in job needs. Comparing data on a quarter to that same quarter a year earlier provides a method to evaluate long-term changes based on a similar point in the seasonal cycle.
Labor Force Size
The size of the labor force has recently experienced moderate gyrations. As the economy improves, prospective workers continue to enter and leave the labor force. While the State of Wisconsin saw its labor force size decline during 05Q4 (fourth quarter of 2005), it had a year-on-year increase in 06Q1. Rock and Jefferson counties mirrored this pattern. Green County showed increases in each period. However, 05Q4 saw a substantial 4.6% increase in the labor force in over a year previously. Lafayette County experienced a yearly increase in 05Q4 with little change for 06Q1. Walworth County on the other hand shows a pattern of loss in the labor force size. Employment changes broadly mirrored changes in the labor force, which itself could be an indicator that changes in the labor force size are biased toward changes in labor force participation and thus hidden unemployment. Green County showed particularly strong year-on-year employment growth in both recent quarters; Jefferson and Rock in the first quarter of this year. Lafayette showed a modest increase, Walworth a modest decline.
Unemployment Rate
Unemployment rates were only slightly higher in the fourth quarter of 2005 compared to a year earlier. Green, Lafayette, and Walworth counties showed increases in the unemployment rate of 0.1 percentage points. Rock County held steady as did the unemployment rate for the state as a whole. Jefferson County showed a decline over the previous year. The first quarter of 2006 was better, with every county but Lafayette having at least some decline in the unemployment rate compared to the previous year; Rock County showing a large 1.6 percentage-point decrease. Rock County’s change was more than 5 times the decrease for the state as a whole and accompanied by a particularly large 28% decrease in the absolute number of unemployed persons. Jefferson County experienced a consistent decline in unemployment rate over the two periods with significant decreases in the absolute number of unemployed as well.
Based on these observations, it would seem that the labor picture in Green County is one of consistent and gathering strength over the two quarters straddling year-end. Rock County also shows signs of significant strengthening. Jefferson County is seeing improvement primarily in falling unemployment rates, while Lafayette and Walworth labor markets could perhaps be described as treading water. This may be due to the fact that those counties are approaching their natural rate of unemployment. Jefferson County still maintains the lowest unemployment rates among the 5 counties, while Rock County has the highest unemployment rate and is also the only county with higher unemployment rates than the state average.
Sectoral Composition
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Table 2 presents information on the industry composition of employment.
The industries in which the jobs are created provide a gauge regarding the development of “good-paying” jobs. Significant changes in the sectoral mix of jobs can make it difficult to reallocate labor resources (i.e. manufacturing workers may not be able to transfer their skills into health care work easily). One fact immediately seen is that the private, non-farm sector has employed more persons in every county over both periods, meaning that any employment declines have been due to either declines in farming employment or declines in employment by the various levels of government. Declines in employment by branches of government were particularly pronounced in Walworth County (at the state level) and Lafayette County (at the local level). Rock and Green counties also saw small declines in government employment. However, Jefferson saw increases in local government employment.
Manufacturing often attracts a great deal of attention in Wisconsin given its historical prominence in the state, its ability to produce a working wage and the pressure the sector has faced over the past decade. The past two quarters show a rebound in the Manufacturing sector. Green County showed employment gains in manufacturing of over 4% each quarter. Lafayette and Rock counties showed similar gains in 06Q1 over the previous year. Only Jefferson County experienced a steady decline in the sector. It is important to note that Jefferson County is heavily dependent on manufacturing employment, as manufacturing provides nearly a third of all private sector employment in the county.
Another sector worthy of note is Information, Professional and Business Services, the one most associated with Information Technology (along with other service roles). Though the sector employed less persons state-wide on a year-to-year basis, over the two periods the sector held steady or showed growth in all of our state-line counties and has become a significant employer overall, accounting for 12% of all employment in overwhelmingly rural Lafayette County. In Leisure and Hospitality however, the sector showed growth statewide. However, with the exception of Lafayette County, employment in Leisure and Hospitality declined in the Stateline region.
County Transformations
Looking at each county individually, Green County had its strongest growth in Information, Professional and Business and Services. This sector, which is also Green County’s third-largest private sector by employment, had year-to-year increases in excess of 10%. Though small, Transport and Utilities showed strong employment growth as did the much more significant Manufacturing sector. Only the Leisure and Hospitality sector showed consistent decline.
Most sectors in Jefferson County showed modest growth. More sizable growth was in the Resources and Construction sector. Manufacturing, by far the largest sector in the county, showed modest employment declines. The only other sector with consistent declines was Educational and Health Services. Private sector employment in Lafayette County is dominated by the Wholesale and Retail Trade sector which did have yearly growth of over 8% in 05Q4. Most other sectors also showed meaningful growth, with declines appearing in the relatively small Transport and Utilities and Financial Activities sectors.
The fastest-growing sector in Rock County is clearly Resources and Construction, perhaps due to retail construction, such as the Wal-Mart and Sam’s Club superstores in Janesville. Manufacturing in Rock showed some employment recovery. Leisure and Educational/Health Services showed consistently modest yearly declines, with more significant employment reductions in Transportation, Warehousing and Utilities. Walworth County stands out as having no sector that generated a large percentage of employment increases. Service sectors of all types consistently grew over the second quarter of the previous year to around 3%. At the same time, neither is any sector showing very large decreases in employment besides Resources and Construction which is one of the smaller employers in the county. Transportation and Utilities did see consistent employment reductions, but of a modest amount.