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INTRODUCTION
With spring rapidly approaching,
many people’s thoughts turn to the outdoor activities that are forgone during
the long winter months.
Fishing, kayaking, and canoeing enthusiasts look
forward to spending time on the Wisconsin River,
a great resource for recreation.
Experienced navigators of the river, however, are
cautious in pursuing these activities.
The image of a gently flowing river often masks
strong and dangerous undertows that can capsize and pull boats underwater, which
is especially pronounced near dam sites.
The safe enjoyment of these activities requires that
participants not be fooled by appearances.
Similarly in economics, things are
not always as they appear.
Relying solely on aggregate measures of economic
performance can give observers a misleading and incomplete picture of the
economy. Economists, for example, have recorded a dramatic decrease in
macroeconomic volatility over the last two decades.
Variability in real output growth and inflation has
declined significantly since the mid-1980s.
Recessions “have become less frequent and less
severe” (Bernanke, 2004). Macroeconomists have designated this phenomenon “the
Great Moderation.”
Yet, the stable macroeconomic conditions of the last
twenty years have obscured a great deal of economic turbulence at the
microeconomic level.
There is substantial evidence to suggest that both
businesses and households have experienced greater volatility over the same time
period.
The rate of job creation and destruction and of hires and
separations (known as churn) has increased significantly.
Today, for example, “[i]n any given quarter, about
one in twenty establishments opens or
goes out of business, and one in thirteen
jobs begins or ends” (Brown, Haltiwanger, and Lane, 2006, 10).
This paper focuses on the increased economic insecurity
faced by households and businesses at the microeconomic level.
It begins by examining the economic evidence of this
increase in volatility.
Then, the paper discusses the likely causes for as
well as the economic implications of this change in volatility.
Finally, the paper briefly introduces a couple of
policy options to help people deal with its negative effects.
ECONOMIC
EVIDENCE
Since the mid-1990s, labor economists Robert A. Moffitt and
Peter Gottschalk (1994; 2002) have attempted to gauge shifting levels of
economic insecurity by analyzing changes in the variability of annual household
income.
These authors have relied on an extended longitudinal data
series known as the Michigan Panel Series of Income Dynamics (PSID).
The PSID is a “longitudinal survey that has followed
a sample of households from the civilian non-institutional population of the United States since 1968.
Approximately 5,000 households were interviewed in
the initial year of the survey and have been interviewed annually…” (Moffitt and
Gottschalk, 2002, 69).
By adding the children of the original sample to the
survey, the PSID now includes over 7,000 families.
On an annual basis, each household reports its
yearly earnings for the previous year.
From this data, Moffitt and Gottschalk have been
able to measure changes in earnings instability faced by sample families.
In doing so, the authors carefully separated
“permanent” from “transitory” (or short term) movements in earnings.
"Skill-biased
technical change” is an important cause of shifting wage patterns.
“If new technologies tend to increase the
productivity of highly skilled workers relatively more than that of less-skilled
workers – a phenomenon that economists have dubbed ‘skill-biased technical
change’ then market forces will cause the real wages of skilled workers to
increase relatively faster” (Bernanke, 2007, 4).
Yet, such changes do not fully capture the
volatility of household earnings.
“An increase in the price of ‘skill,’ for example,
which is presumably determined by gradual movements in demand, implies that
permanent earnings are affected; there is no reason to expect that such a price
increase would cause wages to fluctuate more from year to year, nor is the
fluctuation in the stock of skills likely to increase” (Gottschalk, Moffitt,
Katz, and Dickens, 1994, 220).
In assessing economic insecurity, these economists
focused on calculating the “transitory variance in earnings” which measures
short-term fluctuations in income. Unlike changes in permanent incomes, these
short-term fluctuations are more unpredictable and therefore are an important
cause of economic insecurity.
Figure
1
Fluctuation of Income around its Overall Trend Path*
Source: Economist Print Edition, January 4, 2007
As shown above, the authors found
that the transitory variance of family income increased slowly, starting in the
late 1970s through the 1980s.
It peaked in the early 1990s before beginning to
decline in the mid-1990s.
Recently, Jacob Hacker, a political scientist from
Yale
University, has updated
Moffitt and Gottschalk’s analysis, adopting the same methodology and also
relying on data from PSID.
Hacker has found that earnings instability has been
on the rise since the year 2000.
According to Jacob Hacker, the above figure fails to fully
account for the increase in uncertainty that families face.
In his recent book, The Great Risk Shift,
Hacker finds that typical households experience much larger declines in incomes
than they had in previous periods.
“In the early 1970s the typical income loss was a
bit more than 25 percent of prior income; by the late 1990s it was around 40
percent.
For a family earning $42,000 (the median income for U.S. households in 1999), a 40
percent loss would mean an income drop of almost $17,000.
And remember, this is the median drop:
Half of families whose incomes dropped experienced
even larger declines” (Hacker, 2006, 31).
Using data from PSID, the figure below shows “what
the chance of experiencing a 50 percent or greater family income drop is for an
average person each year.
The probability of a 50 percent or greater drop for
an average person was just 7 percent in the 1970s.
It’s risen dramatically since, and while (like
income volatility) it fell in the strong economy of the 1990s, it has recently
spiked to record levels” (Hacker, 2006, 31-32).
Figure 2
Changes of Average Worker Facing a 50%
or Greater Drop in Income over Time
Source: Economist Print Edition, November 25, 2006
A number of economists directly
tie much of the rising income instability to increased volatility of firm
performance during the same time period.
Diego Comin, Erica Groshen, and Bess Rabin point to
studies showing “that the volatility of firm-level performance, whether measured
by the profit-to-sales ratio or the growth rate of sales, employment, or sales
per worker, has experienced a prominent upward trend since at least 1970”
(Comin, et. al., 2006, 1).
Using the PSID, they examined wage volatility for
workers who did not change jobs.
This was done to isolate effects of changing firm
performance on transitory variance of wages by eliminating the effects of wage
fluctuations that result from changing jobs.
“Using firm data from COMPUSTAT, [they] find rising
volatility of firms’ mean wages that mirrors the rise in volatility of firm
performance and robust evidence that when firms experience more turbulence they
pay more volatile wages” (Comin, et. al., 2006, 32).
In fact, the authors find that the rise in firm
turbulence accounts for 60 percent of the rise in wage volatility.
Without the availability of reliable panel data, it is
difficult to definitively determine the degree of economic turbulence
experienced by Wisconsin
households.
Changes in overall employment, as reported monthly by the
Bureau of Labor statistics, can be misleading.
These “numbers, which are typically about net
changes in hundreds of thousands of jobs, are just the tip of the employment
iceberg, since literally millions of workers will have changed jobs over that
period.
Even though the numbers signal important changes in the
level of economic activity, they’re a little like reporting changes in the level
of a lake, without information about the rivers that flow into and out of the
lake” (Brown, Haltiwanger, and Lane, 2006, 11).
Despite this problem, there are a number of
indicators that suggest that households in Wisconsin and our local area are experiencing
greater economic insecurity today.
According to a study by the
Wisconsin Taxpayer Alliance, “[f]rom
1999 to 2005, Wisconsin’s median household income fell 2.2% from $45,667 to
$44,650 while the national median rose 13.8% from $40,696 to $46,326.
“Wisconsin ranked 50th in the nation in
household income growth during the period” (www.wistax.org).
Though these numbers do not directly measure
volatility per se, they do indicate increasing distress for middle income
families.
Historically, a higher percentage of
Wisconsin families have both parents in the workforce than the
nation as a whole.
The Wisconsin
Taxpayer Alliance attributed much of the decline in median household income
to a recent drop in the number of workers per household.
“In 2000 both spouses worked in 59.5% of married
couple families in Wisconsin,
8.2 percentage points above the national average of 51.3%.
Over the next five years, Wisconsin’s percentage
fell to 58.8%, while the U.S. share rose to 52.1%, shrinking the difference to
6.7 points” (www.wistax.org).
Even though the reasons for such high workforce
participation rates are difficult to pinpoint, having both parents in the labor
force can be a form of private risk-sharing.
“The analogy here might be a stock portfolio.
Rather than holding a single stock (the husband’s
earnings), the modern family holds two stocks (the husband’s and wife’s
earnings) - and holding two stocks is never more risky than holding one”
(Hacker, 2006, 91).
In the fall of 2006, the
Wall Street Journal published an
article listing a number of interesting observations based on the
Census Bureau’s American Community Survey.
According to this survey, 83.8% of all children
under the age of six in Portage
County have both parents in the
workforce, the highest of any county in the United States (Lovely, 2006, D1).
“The county, in the middle of the state, also has a
high percentage of its adults in the work force (74.1%, compared with a national
average of 65.4%).
While the county’s median family income is a bit
higher than the national average, the population’s educational level is a bit
below average” (Lovely, 2006, D1).
If the risk-sharing hypothesis is accurate, central
Wisconsin households perceive their economic environment to be
highly insecure.
Other measures strongly indicate that economic insecurity
has increased for the citizens of
Wood
County.
Instead of relying solely on aggregate employment
figures (i.e. the level of the lake), this paper uses data collected by
Wisconsin’s
Department of
Workforce Development to break down employment
by industrial sector (i.e. the rivers that flow into and out of the lake).
These figures are helpful in assessing changes in
the composition of employment over time for
Wood
County.
Variation in the composition of employment among
industries may be evidence of economic turbulence as laborers are compelled to
shift between sectors.
Tables 1 and 2, seen below, compare
Wood
County employment
figures for two time periods, from 1997-2001 and 2002-2006.
Table 1 shows that
Wood
County experienced a
2.3% decline in total employment from 1997 to 2001 despite the rapid economic
growth occurring at the national level.
This decrease was largely attributable to the poor
performance of the manufacturing sector which posted a 10.6% decline in
employment.
(We strongly suspect that the very sharp changes in the
employment figures for the Public Administration and Education & Health Service
sectors reflect a geographic code change in Wood County that spanned from 1994
to 1998.)
Table 1
Wood County
Employment:
1997-2001
Source: Wisconsin Department of Workforce Development
The numbers for years
2002 to 2006 in Table 2 show continued weakness in the manufacturing sector as
employment fell by a staggering 17.4%.
Much of this decline was concentrated in paper and
wood product manufacturing areas which experienced reductions in employment of
over 2000 jobs (Hodek, 2007, 5).
The dramatic declines in manufacturing employment
appear to be structural given that much of the job loss occurred during periods
of economic expansion.
By contrast, total employment in Education & Health
Services grew impressively, increasing by 7.3%.
“Wood
County
is home to a booming healthcare cluster, because the county is home to the
Marshfield Clinic, one of the largest multi-specialty group practices in the United States.
Wood
County
also has two hospitals and numerous residential care facilities” (Hodek, 2007,
5).
During this time period, the Education & Health Services
sector’s share of total employment increased by 2.1% while Manufacturing’s share
fell by 3.4%.
These striking shifts in the composition of employment
during a relatively short time period indicate significant economic turbulence.
Given the very different skill sets of occupations
in these two industrial sectors, it is difficult to imagine that the expansion
of health care absorbed much of the dislocation caused by the decline in
manufacturing.
Table 2
Wood County
Employment Data:
2002-2006
Source: Wisconsin Department of Workforce Development
Wood
County
wage and payroll data by industrial sector is provided in Tables 3 and 4 for the
same time periods.
These figures are useful in assessing the likely
fluctuations in income workers experienced in the
Wood
County area.
All the wage and payroll figures are calculated in
1997 dollars to capture changes in purchasing power over time.
For the period 1997 to 2001, the average annual real
wage for all industries increased by 7.7%.
(This means that the purchasing power of the average
wage increased by 7.7% over this time period.)
The sharp increase in real wages in the Education &
Health Services sector more than compensated for the 2.7% decline in the
Manufacturing sector.
In 2001, wages in Manufacturing accounted for 24.9%
of all Wood
County payroll dollars,
a decline of 5.2% from 1997.
Table 3
Wood County
Wage and Payroll Data:
1997-2001
*Wage and Payroll figures presented in 1997 dollars
Source: Wisconsin Department of Workforce Development
The figures for years 2002 to 2006
in Table 4 show that the purchasing power of the average worker remained
unchanged.
Deflating wages to 1997 dollars, average annual wages
increased by only 0.8%.
This measure alone doesn’t reveal much because few
workers can be considered average.
The decline in real wages in manufacturing
accelerated to 4.5% during this period.
Additionally, manufacturing’s share of total payroll
fell by 5.2%, reflecting declines in both real wages and employment.
Average real wages in the Education & Health
Services sector continued to climb, increasing by 3.9% over the period.
Table 4
Wood
County Wage and
Payroll Data: 2002-2006
*Wage and Payroll figures
presented in 1997 dollars
S= Suppressed data (not available)
Source: Wisconsin Department of Workforce Development
Analysis of the two time periods
reveals a steep decline in manufacturing.
Workers in this sector faced a significant amount of
dislocation with a sharp fall in both jobs and real wages.
Much of the rise in economic insecurity can be
attributed to the importance of the manufacturing sector to both the state and
regional economies.
Wisconsin is second only to Indiana in terms of annual manufacturing
payroll calculated on a per capita basis (www.statemaster.com).
A rapid secular decline in manufacturing employment
disproportionately impacts Wisconsin
and helps to explain the state’s poor performance in terms of income growth over
the last several years.
Though not discussed in this paper, the appendix provides
employment, payroll and wage data for the same time periods for both
Portage and Marathon
County as
well.
CREATIVE
DESTRUCTION AND ECONOMIC TURBULENCE
Economic insecurity, to a great
degree, is a byproduct of the workings of a rapidly growing, well-functioning
market economy.
In market-oriented economies, competitive forces
drive firms to create new products and develop new technological processes to
attain and maintain an edge on their rivals.
Businesses that fail to innovate often shrink or are
driven from the market.
These competitive pressures constantly act to
disrupt the economic status quo, requiring an unending shuffling and reshuffling
of economic resources.
“Turbulence can result from new, more productive
firms replacing old, less productive ones, even within the same industry.
This process, which Joseph Schumpeter called
‘creative destruction’ means that jobs get reallocated from one set of firms to
another and accounts for a large fraction of aggregate (industry)
productivity growth” (Brown, Haltiwanger, and Lane,
2006, 4).
Despite its disruptive nature, the process of creative
destruction has been responsible for improving the standards of living of
citizens residing in highly developed market economies.
As Nobel Prize winner Edmund Phelps describes:
The main benefit of an innovative
economy is commonly said to be a higher level of productivity – and thus higher
hourly wages and a higher quality of life.
There is a huge element of truth in this belief, no
matter how many tens of qualifications might be in order.
Much of the rise in productivity since the 1920s can
be traced to commercial products and business methods developed and launched in
the U.S.
and kindred economies.
(These include household appliances, sound movies,
frozen food, pasteurized orange juice, television, semiconductor chips, the
Internet browser, the redesign of cinemas and recent retailing methods.)
There were often engineering tasks along the way,
yet business entrepreneurs were the drivers (Phelps, 2006, A14).
Both the revival in productivity
growth since the early 1990s and the rise in economic insecurity appear to be
related.
Important structural changes in the economy over the last
25 years have been largely responsible for creating an increasingly dynamic and
competitive economy.
The unleashing of competitive forces has spurred
higher rates of creative destruction that simultaneously fuel economic growth
and increase volatility.
The following represent a few highly interrelated
factors that account for rising productivity and concomitant increases in
economic turbulence.
·
Globalization
By the late 1970s, the United States faced fierce
competition from abroad.
The revival of European and Japanese economies from
the devastation of World War II and the expansion of trade with less-developed
nations increased competitive pressures on American businesses.
The significant fall in global transportation costs
with the introduction of container shipping also dramatically expanded the
geographical extent of the market.
·
Capital Formation
Higher rates of investment
spending since the early 1990s accounted for the increasing use of capital in
production, including labor-saving technologies.
Automation has both increased productivity and
displaced workers, especially in the manufacturing sector.
·
Technological Change
Advances in communication and
information technologies made possible the implementation of new supply chain
methods by facilitating coordination among businesses and their suppliers.
These technologies allowed businesses to lower costs
by outsourcing non-core activities to specialized, independent firms.
The internet sparked increased competition in many
arenas by dramatically reducing customer search costs and by extending the
geographical reach of firms.
New technologies in steel production and electricity
generation dramatically reduced the minimum efficient scale of production,
leading to lower costs.
·
Decline in Unionization
Along with the decline in
manufacturing came a fall in union membership.
In 1977, 23.8% of all wage and salary workers were
union members.
By 2005, union participation had fallen to 13.7% of
the labor force (www.trinity.edu/bhirsh/unionstats).
The decline in unions had the effect of increasing
both labor market flexibility and wage volatility.
·
Deregulation
Extensive deregulation in
telecommunications, airlines, railroads, trucking, energy, financial and other
industries exposed a significant portion of the economy to competition.
“In 1977 fully regulated industries produced 17
percent of the U.S. Gross National Product.
By 1988 this figure had been reduced to 6.6 percent”
(Viscusi, et. al, 2000, 306).
Competitive forces freed up economic resources for
alternative uses by reducing many of the inefficiencies that arose during
regulation.
·
Changes in Corporate Governance
The decades of the 1980s and 1990s
witnessed a tremendous amount of business restructuring.
In the 1980s, hostile takeover activity reduced
excess capacity in mature industries and spurred a return to specialization by
disassembling poorly performing conglomerates.
In the 1990s, changes in executive compensation
promoted “voluntary” restructuring of businesses.
The use of stock options and other
pay-for-performance schemes were successful in aligning managerial and
shareholder interest.
Active monitoring by large institutional
shareholders and private equity firms also reinforced these trends (Holmstrom
and Kaplan, 2001).
While stimulating economic growth, the combined effects of
these factors forced changes in the employment relationship, subjecting
employees to greater economic risk.
The variance of pay both within and across firms has
increased as human resource practices have adapted to this new environment
(Lazear and Shaw, 2007, 27).
“Gain-sharing” and “pay-for-performance” schemes
have been replacing fixed salaries with regards to compensation.
Many of the institutional protections that
traditionally shielded workers from volatility have disappeared.
Companies are increasingly replacing
“defined-benefit” pensions with riskier “defined-contribution” 401(k) plans.
“Since 2000 the proportion of employers offering
health coverage to their workers has fallen by nearly ten percentage points, and
the proportion of employers that finance the full cost of coverage – once the
norm – has plummeted from 29 percent to 17 percent for individual health
insurance and from 11 percent to 6 percent for family health premiums” (Hacker,
2006, 139).
This sea change in the sharing of risk between employers
and their workers has prompted a number of public policy proposals.
The next section briefly looks at two such
proposals.
PUBLIC POLICY OPTIONS
In a speech from last year,
Chairman of the Federal Reserve Ben Bernanke argued that new policy options need
to be consistent with principles held by a majority of Americans.
These principles include “that economic
opportunity should be as widely
distributed and as equal as possible; that economic
outcomes need not be equal but should
be linked to the contributions each person makes to the economy; and that people
should receive some insurance against
the most adverse economic outcomes, especially arising from events largely
outside the person’s control” (Bernanke, 2007).
In addition, policymakers need to consider the
effects of these proposals on overall economic activity.
With regard to providing insurance against economic
volatility, the challenge for public policy is to provide greater security for
workers without unduly diminishing the competitive forces that drive economic
growth.
In other words, how can we insulate workers from the
vagaries of a market economy without slaying the goose that lays the golden
eggs?
Nobel-prize winning economist Michael Spence summarizes
these concerns:
Institutions and policies that retard the movement of
people and resources will also retard growth, a fact that is true in advanced as
well as developing economies.
Such policies may nevertheless be justified on the
ground of protecting people from the full effect of market forces.
But such protections are best if they are transitory
and not permanent, and generally it is better to protect people and incomes
rather than jobs and firms.
The latter approach impedes the competitive
responses of firms in the private sector and, in the context of the global
economy, becomes very expensive (Spence, 2007, A19).
New economic realities call for a rethinking of existing
social insurance programs that are designed to shield workers from the full
brunt of economic fluctuations.
“Traditionally, unemployment was ‘cyclical’:
workers lost their jobs when production contracted
and were then re-employed in lines of work similar to their previous employment
when production re-expanded.
Today, however, unemployment is increasingly likely
to be ‘structural’ – persistent, perhaps even permanent, and ending only when
workers accept a new job that often implies major cuts in pay, hours, or both”
(Hacker, 2006, 68).
Unemployment insurance programs created during the
New Deal were developed to help workers deal with temporary downturns in
economic activity.
These programs are not designed to help workers cope
with the more difficult challenges arising from structural unemployment.
Labor economist Jeffrey Kling has
proposed reforms to existing unemployment insurance programs to address the
challenges of permanent dislocation and falling compensation.
In his revenue-neutral proposal, Kling calls for a
combination of “wage loss insurance” and “temporary earnings replacement
accounts” to replace the current system.
According to Kling, wage-loss insurance is designed
to “augment the hourly wages of individuals who take jobs that pay a lower wage
than was paid at their previous jobs.
The reform proposal could reduce by half the share
of laid-off workers who experience very large drops in wages at new jobs – from
14 percent to 7 percent” (Kling, 2006, 1).
Unlike compensation under traditional unemployment
insurance which is received while unemployed, wage insurance provides incentives
for dislocated workers to take new jobs at lower pay.
The policy enhances labor market flexibility by
providing incentives to take jobs that offer important on-the-job training to
gain the critical skills to adapt to new economic realities.
The temporary earnings replacement accounts “would
be structured to provide workers with the same ability to maintain living
standards during unemployment as does the current UI system, while providing a
mechanism through which workers could accumulate savings prior to unemployment
and could borrow against future earnings” (Kling, 2006, 1).
The principle of equal economic
opportunity singled out by Bernanke
can inform change in another critical area in dealing with economic security:
education.
The level of educational attainment is a decisive
factor in determining the level of economic insecurity.
“Volatility is indeed higher for less educated
Americans than for more educated Americans – slightly more than twice as high”
(Hacker, 2006, 27).
Greater access to educational opportunities at all
stages of life is necessary for workers to update their skills to meet the
shifting demands of employers.
“Yet the fundamental way most people prepare to be
productive citizens has not changed much. . . .
Despite their longer life spans, most people stop
formal education early on in life, much as they did a hundred years ago” (Rajan
and Zingales, 2003, 303-04).
According to David Wessel, the current education
system is failing to adequately meet the growing demand for more educated
workers.
“The shortage is evident from this fact:
Employers are paying the typical four-year college
graduate [without graduate school] 75% more than they pay high-school grads.
Twenty-five years ago, they were paying 40% more”
(Wessel, 2007, A2).
Unfavorable demographic trends combined with the
leveling off of average years of schooling means that skill shortages are likely
to get worse.
University
of Chicago
economists Raghuram Rajan and Luigi Zingales believe “there may be reason to
rethink the entire structure of higher education, a system designed at a time
when students typically left the university for a career with one employer.
We need more modular degrees and lifelong admission
to a university (at least for the general programs) – so that the student can
pick and choose what she wants and when she needs it” (Rajan and Zingales, 2003,
304).
Technical and community colleges currently offer workers
opportunities for improving their skills but four year schools need to be more
creative in providing more flexible course offerings.
In terms of providing financial support, job
retraining initiatives are often inadequate and are only eligible to workers
that already have suffered dislocation.
Gene Sperling (2005) recommends that the government
provide “preemptive retraining assistance” that would be available to workers
before they lose their jobs.
Such assistance can come in the form of a Flexible
Education Account that gives workers a credit to cover a portion of their
retraining expenses.
The Flexible Education Account “recognizes that what
most workers need is a great deal of new education or training in a concentrated
period – a few times in any given decade or more in many cases.
The Flexible Education Account gives workers a
larger credit when they need training, but gives them the power to concentrate
or spread out their resources over a decade as they see fit – not only if they
are laid off, but also when they sense their jobs are at risk or simply want a
promotion or job change” (Sperling, 2005, 74).
CONCLUSION
The economic landscape today is
very different than it was twenty five years ago.
The largest employer in America today is
Wal-Mart, not General Motors.
“The largest owner of passenger jets is not United
Airlines, or any other major carrier, but the aircraft leasing arm of General
Electric.
American automakers have spun-off their in-house parts
subsidiaries and outsourced the design and manufacture of entire automotive
sub-systems to first tier suppliers” (Sturgeon, 2002, 454).
Technology experts Andrew McAfee and Erik
Brynjolfsson do not expect the rate of change to decline any time soon.
They write, “because every industry will become even
more IT-intensive over the next decade, we expect competition to become even
more Schumpeterian” (McAfee and Brynjolfsson, 2007, R10).
Such forecasts promise both high rates of economic
growth and greater insecurity
The crafting of the right type of
policy to address economic insecurity is critically important.
As stated above, policies need to “protect people
and incomes rather than jobs and firms.”
Trade protection and industry subsidies harm
consumers and can have long-term negative effects on economic growth by
diminishing competitive pressures for change.
It is crucial to get the balance right.
Policies should cushion the blow of job dislocation
and provide workers the skills to adapt to rapidly changing economic realities.
In the absence of such responses, citizens will
continue to have difficulty in adjusting to change.
The alternative approach of protectionism is likely
to result in economic stagnation that presents its own array of pathologies.
Neither of these options is particularly appealing.
APPENDIX
Table 5
Marathon
County
Employment: 1997-2001
Source: Wisconsin Department of Workforce Development
Table 6
Marathon
County
Employment: 2002-2006
Source: Wisconsin Department of Workforce Development
Table 7
Marathon
County Wage and
Payroll Data: 1997-2001
*Wage and Payroll figures
presented in 1997 dollars
S= Suppressed (not available)
Source: Wisconsin Department of Workforce Development
Table 8
Marathon
County Wage and
Payroll Data: 2002-2006
*Wage and Payroll figures
presented in 1997 dollars
S= Suppressed (not available)
Source: Wisconsin Department of Workforce Development
Table 9
Portage
County
Employment: 1997-2001
Source: Wisconsin Department of
Workforce Development
Table 10
Portage
County
Employment: 2002-2006
Source: Wisconsin Department
of Workforce Development
Table 11
Portage
County
Wage and Payroll Data:
1997-2001
*Wage and Payroll figures presented in 1997
dollars
S= Suppressed (not available)
Source: Wisconsin Department of Workforce Development
Table 12
Portage
County
Wage and Payroll Data:
2002-2006
*Wage and Payroll figures presented in 1997 dollars
S= Suppressed (not available)
Source: Wisconsin Department of Workforce Development
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