Milwaukee and Wisconsin businesspeople know that our biggest problem is attracting and keeping skilled and creative workers. This has been a constant theme at the Milwaukee Metropolitan Chamber of Commerce and the motivating force behind school reform and integration.
In the brokerage industry, there is an industry wide 85 percent failure rate for new trainees. A typical training class has ten people with an average cost of $150,000 per trainee. This is almost $13 million tossed down the drain per class. It is no wonder that successful brokers are paid so much to move from one firm to another. The industry is not replacing brokers; it is cannibalizing them from each other.
We have a nursing and doctor shortage, with the shortfall for nurses projected to be one million. Welders are in great demand. Indeed, Wisconsin industry imports welders from Indiana.
There are many reasons for these problems, but the situation will worsen. And one reason is the demographic realities of our aging society – and especially Wisconsin’s.
The growth rate of the working age population – that is 21 to 62 years old – is in flux, only masked by the 2008 stock market crash that has forced people to work longer.
Here are some startling figures:
Decade Average Annual Change
1980’s 1,007,000
1990’s 882,000
2000’s 702,000
2010’s (3,000)
2020’s 218,000
As David Pierce Snyder pointed out in a recent talk, birthrates and household formations have fallen 6%-7% since 2007. He expects this to remain low until the unemployment rate drops below 7.5%. This means fewer people coming into the work force.
Three years ago, we graduated 1,524,000 bachelor degrees, but only 450 petroleum engineers and 4,492 chemical engineers. 50% of graduate students are foreign born, but many are returning home where they feel their opportunities are better.
In Wisconsin we have a special problem. Young adults and recent graduates do not find opportunities here and as a result leave. I have talked to a dozen young adults (25 to 35 years old) who are aghast at what Governor Walker is doing. One young lady – a creative – just turned down a job in Wisconsin because of the atmosphere; she already has a higher paid job in Chicago. The problem is really two fold. We are educating and raising our smart young adults, but they are leaving the state to find more attractive prospects. In many ways, Wisconsin is repelling folks from pursuing careers here and building a brighter future for our state.
There is more on Mr. Walker’s agenda here than labor concessions. Labor was so demoralized after the last election that he could have gotten the economic concessions he demanded. No, this is political. He wants to break the unions, legally or otherwise. In Milwaukee County which the Greater Milwaukee Committee says he left in shambles, Walker unilaterally forced workers to take a reduction in pay. The Court of Appeals ruled against his work hour reduction, but Walker knew he would not be around to see the consequences of his actions.
One dangerous outcome from breaking the teachers and public sector unions is that Wisconsin is currently rated #2 in ACT/SAT scores. There are only five states that do not have collective bargaining for educators and have deemed them illegal. Here is a list of those states and their rankings on ACT/SAT scores:
South Carolina 50th
North Carolina 49th
Georgia 48th
Texas 47th
Virginia 44th
Many years ago, Briggs & Stratton had a new “leader” who decided to break their union. The firm’s quality and productivity fell until Stratton returned and worked co-operatively with the union.
Ironically, Walker’s actions have re-energized the union movement as workers see their situation as “good against evil.”
Walker’s anti-union measure coincides with the voter suppression law that was passed and the rejection of the $810,000,000 high speed rail that would have generated about 29,000 jobs for $702,000 a year cost to Wisconsin if the Federal subsidy is included. This is what Walker just gave to a political supporter to expand his business.
Few businesspeople like taxes, but we like what taxes do for us. Few of us like regulation, but all of us know that often these regulations put competitors on an even footing with us and keep the crooks out. We start and operate businesses because we have an idea or invention that we are passionate about. We might want to be independent or we want to acquire wealth for ourselves and our families. These are our motivations.
Taxes and regulations do not top this list. So look closely at what is happening to our state and how this damages our ability to attract the people who will create and build our future.
Bob Chernow is a Milwaukee businessman and futurist.
