Economist Says De-Unionization, Recession, Erosion Of Manufacturing Are Factors
A new state-by-state analysis from the Pew Charitable Trusts shows that Wisconsin experienced the biggest decline in middle-class households in the country between the years 2000 and 2013.
The study found that the percentage of households in the middle class dropped in all 50 states, with Wisconsin’s drop from 54.6 percent to 48.9 percent being the most significant. Moreover, Wisconsin saw a 14 percent decline in median household income.
Marc Levine — professor of history, economic development and urban studies, and director of the University of Wisconsin-Milwaukee Center for Economic Development — attributed the state’s shrinking middle class to the Great Recession, among other factors. He said reversing the trend would require raising the minimum wage and restoring unions, especially in the manufacturing industry.
Wisconsin’s economy relies on manufacturing perhaps more than any other state, said Levine. When manufacturing gets hit hard, he said, Wisconsin gets hit hard too.
Since 2000, Wisconsin has lost about 90,000 — between 18 to 20 percent — of its manufacturing jobs, according to Levine, in part due to free trade agreements and Chinese imports.
Levine said another big part of the story has been “downward occupational skidding.” Laid-off manufacturing workers have been displaced into lower-paying jobs in the service industry, and those who have been able to continue working in the manufacturing industry have seen stagnant wages.
“It turns out the manufacturing jobs aren’t paying what they use to anymore, and a big chunk of that is because of the de-unionization that has occurred,” said Levine.
In the late 1960s, an estimated 35 percent of Wisconsin’s total workforce and 50 percent of manufacturing workers were unionized, according to Levine. Today, roughly 11 percent of Wisconsin workers are in a union. That figure is 17 percent for manufacturing workers.
To grow Wisconsin’s middle class, Levine recommends raising the minimum wage to a “living wage” and supporting the ability of workers to engage in collective bargaining.
“In Wisconsin, we’ve obviously gone the opposite way over the last three or four years,” Levine said. “Act 10 took away the collective bargaining rights for public employees, and the rate of unionization in the public sector has declined by about half in the state. And of course, we just passed a right-to-work law and right-to-work states, the research suggests, tend to have lower wages. Those sorts of policies are pushing us in the wrong direction.”
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Article Photo: Wisconsin’s middle class saw the steepest decline in the country since 2000, according to a new study. Photo: U.S. Department of Agriculture (CC-BY)