Unemployment is down, wages are up, and workers in Wisconsin are more willing to talk union this Labor Day.
This is the summary of the latest State of Working Wisconsin report from COWS, a research center at the University of Wisconsin that examines the state of the economy through the eyes of the entire workforce.
“The question we always try to track is what is the relative balance of power between employers and workers,” says Laura Dresser, associate director at COWS and lead author of the report. “This is a time when I see more consistent signs of increased worker power.”
Seeking better working conditions, whether by changing employers or staying and demanding a better deal, “workers see opportunities and take those opportunities individually and collectively,” says Dresser.
This in no way means that the state has become a paradise for workers, according to the report.
“Certainly deep underlying issues – job quality in low-wage jobs, severe racial inequality and the long-term decline of unions – are still there and this year’s gains could easily be lost if we are entering a recession,” the report states. “But this year, workers seized opportunities to improve their working conditions. If formal and informal worker organizing continues, Wisconsin could begin to see longer-term change.
Working-age Wisconsin residents are more likely to be working or looking for work than the national average, as measured by the state’s labor force participation rate: 66.4% in July, down from 62% for the whole of the United States. Wisconsin’s unemployment rate, measuring the number of people actively seeking work but unable to find it, was 3% in July, lower than the nation’s 3.5%.
Yet among black and Hispanic workers, unemployment rates remain higher. The same is true in rural northern counties, where the economic base has continued to deteriorate with the loss of farms and other work opportunities.
At the same time, employers won’t find it any easier to fill positions in the years to come. According to the report, demographics in the form of an aging population and a declining share of people aged 25 to 54, the ‘peak working’ age bracket, are shrinking the labor force. This will continue, “leaving public and private employers to compete for the smaller pool of potential workers”.
The report firmly rejects a persistent trope in today’s workplace discussions: the title of a chapter is “The Myth of the Great Resignation.”
According to the report, this conventional slogan has “misinterpreted” what has happened as employers struggle to fill vacancies. “It’s more appropriate to see it as a ‘big renegotiation’ or a ‘big reassignment’.”
Hiring exceeds the number of quits in the whole economy. “Workers don’t quit their jobs, they progress,” the report says. Total employment in Wisconsin reached more than 3.05 million in May 2022, belying the notion that there is a huge pool of people who have simply chosen not to work.
But job growth varies widely. Leisure and hospitality jobs, which saw the most drastic decline at the start of the COVID-19 pandemic, have recovered significantly, but they still remain 6% below their pre-pandemic numbers, according to the report. Compared to February 2020, jobs in a range of other services are down 6.8%, as well as in government (5.6%) and education and healthcare (3.7%) . The biggest gains were in construction, up 4.5% from pre-pandemic. Manufacturing fell by less than 1% during this period.
According to the report, wages in Wisconsin increased from 2019 to 2021, and disparities by gender and ethnicity narrowed slightly. For black women, wage gains were the largest during this period: 14%. White women’s salaries increased by 9%, Hispanic women’s salaries by 4.2%, Hispanic men’s salaries by 5.2%, and black men’s salaries by 2.9%. White men saw their average earnings drop 2.3%.
Overall, the impact has been to “raise the bottom” of the labor force, slightly narrowing the gaps between the highest and lowest paid levels. “It’s just the low-wage sectors where this year wages are rising faster than inflation,” Dresser said.
As employers continue to struggle to fill vacancies, the terms have allowed “workers to see their worth and demand more from the job,” says Dresser. “The power of a strong exit threat is a game-changer.”
They also show more interest in organizing.
Union representation was hit hard in Wisconsin after 2011, with the passage of Bill 10 that year, severely limiting collective bargaining for most public employees and weakening their unions, followed by the Right to Labor Act. state labor that undermined private sector worker unions in 2015. Unions made up 20% of Wisconsin workers in 1989; the number was less than 10% in 2021.
In recent years, there have been wide-ranging labor organizing efforts in Wisconsin, from baristas at Starbucks and Colectivo Coffee to nurses at UW Health and other groups seeking union representation. These alone won’t reverse the decline of state unionization, Dresser says, but they do represent a change in direction.
“When workers make demands, you see employers pre-emptively offering them things to stop them from making demands,” she says — and some workers see the message of their own power as a consequence. “The cycle is really getting stronger.”
The report cites a recent Gallup poll that found 71% of the US population has a favorable view of unions – “as high as it was in the 1960s”, observes Dresser. “There is a kind of awareness of corporate power and inequality that is emerging that sees organizing unions as a way to address this issue.”
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