State economy faces trouble, UW researchers say

With relatively few college-educated people moving here and an economy that is generating large numbers of lower-skill jobs, Wisconsin faces a challenging future, researchers at the University of Wisconsin Extension and UW-Madison argue in a new report.

The state’s workforce has a smaller share of people with a bachelor’s or advanced degree than any of its neighbors, and Wisconsin’s in-migration of such adults is among the lowest in the nation, say researchers Tessa Conroy, Matt Kures and Steven Deller.

“From the perspective of developing an educated labor force that supports both innovation and entrepreneurship,” they write in a paper published earlier this month, “the metrics presented in this report are troubling.”

The extension researchers — Deller and Conroy also are economists with faculty positions at UW-Madison in the department of agricultural and applied economics — are the latest to weigh in on the debate over the direction of the state’s economy.

Wisconsin enjoys low unemployment — the September rate tied Maine for 14th best in the country — but private-sector wages are slightly below average, and the state scores poorly on measures of entrepreneurship.

Occupational projections, meanwhile, suggest that Wisconsin’s economy, relatively speaking, is not on a high-skill track.

Conroy, Deller and Kures analyzed job forecasts for 2012 through 2022, placing most of the hundreds of occupations — from personal care aides to biochemists — in one of three categories based on the amount of education typically needed to enter the field.

Wisconsin ranks last again for start-ups

About two-thirds of the projected employment growth was in occupations requiring only a high school diploma, or no educational credential at all to get started in the field, the researchers concluded. (A graphic in the report shows mistaken figures.)

A Milwaukee Journal Sentinel analysis of projections for 2014 through 2024 that, unlike the extension study, included all occupations, found less-discouraging results. But stacked against the country as a whole, Wisconsin didn’t fare particularly well.

The Bureau of Labor Statistics projects that 49% of the job growth nationwide through 2024 will come in occupations that typically require people entering the field to have education beyond high school.

The comparable figure for Wisconsin: 40%.

Similarly, 34% of jobs here are projected to be in occupations that typically don’t even require a high school diploma to enter, compared with 29% nationwide.

Wisconsin will have so many job openings requiring a high school diploma or less that the state won’t have enough appropriately skilled workers to fill them, the extension researchers say.

On the other hand, they say, the number of college-educated workers will exceed the number of jobs typically requiring a degree.

Still, Deller argues that Wisconsin should be placing more emphasis on higher education, not less.

It’s a bet on an as-yet-unseen future: Educate lots of people — or attract them from elsewhere and hold onto them — and they will create a new, flourishing economy.

It’s holders of bachelor’s degrees, Deller said, who are most likely to start new businesses — long an area in which Wisconsin lags.

Education policy can shape the future of the economy, “and if we want entrepreneurship to be a big piece of that, we want to be investing in higher education,” he said.

Many in manufacturing and other sectors, citing difficulties filling jobs, have called for steps to better align schooling with the needs of business. Deller argues against that approach.

Investing in training programs to meet the currently open job slots is “really very short-sighted,” he said.

“I think we need to be thinking a little bit more of what do we want our economy to look like 10 years from now, and how do we make investments in education now so that we’re moving in that direction,” Deller said.

Tim Sullivan sees things differently. The former CEO of Bucyrus International served as Gov. Scott Walker’s special consultant for business and workforce development a few years ago, and has been a prominent voice speaking on the so-called skills gap that many in industry say has left job openings unfilled.

Sullivan said the approach Deller advocates is “going the wrong direction.”

“If anything, we should be emphasizing our technical college education system,” he said.

In a report he prepared for Walker four years ago, Sullivan said some 34,000 students enrolled in the state’s technical colleges already had four-year degrees — indicating they were struggling to find employment and were seeking more job-specific skills.

“Education’s supposed to really provide you the skill sets to get a job and to go through life being able to provide for yourself and your family,” Sullivan said. “If you’re not marrying or tying the education system to the available job market, it’s just crazy.”

Scott Jansen, an administrator in the State Department of Workforce Development, said the BLS methodology for categorizing occupations by education can make the typical entry requirements appear less demanding than they actually are. The Workforce Development Department uses the same methodology to project occupational growth in Wisconsin.

“When you take a look at our job board at Job Center of Wisconsin, where the employers themselves specify the educational attainment requirement, we don’t have half the job board saying that you only require a high school diploma or less,” Jansen said. “It’s typically some other kind of credential, some kind of post-secondary education, a tech diploma, associate degree,…things that you don’t acquire in high school.”

Wisconsin, like the great majority of Midwestern states, experienced net out-migration of adults with a bachelor’s degree or higher from 2010 through 2014, according to the extension research.

College-educated adults in their 20s leave at particularly high rates, while the inflow and outflow of those 30 to 64 is roughly balanced, the research shows.

Deller said the heart of the problem is that Wisconsin lags in attracting the college-educated.

“We’re not really experiencing a brain drain,” he said. “We’re lacking a brain gain.”

Jansen said out-migration of educated Wisconsinites, and what to do about it, has been a subject of much discussion on the Governor’s Council on Workforce Investment. Initiatives by young-professionals groups, alumni associations and others are seeking to address the problem, he said.

“We’re starting to win more in that space,” said Jansen, who runs the Workforce Development Department’s employment and training division.

Some young people leave after graduation, perhaps seeking big-city experiences, but return later when they are ready to marry and start families, he said.