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Introduction
Spring has arrived in central
Wisconsin as thoughts turn to the many 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.
In economics, looks can be deceiving as well. Aggregate measures of economic
performance can give unwary observers a misleading and incomplete picture of the
economy. For example, economists 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 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
firms 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 the 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*
*Transitory variance of the logarithm of family
income
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 and firms 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 Portage
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 in employment over time for Portage
County. Variation in the composition of employment may be evidence of economic
turbulence as laborers may be compelled to shift between sectors. Tables 1 and
2, seen below, compare Portage County employment figures for two time periods,
from 1996-2000 and 2001-2005. For years 1996 to 2000, total employment in
Portage County increased by 5.9% to 31,379. Though job growth was robust, the
composition of employment across sectors was largely unaffected. Column three
shows the share of total employment for the different sectors in percentage
terms. Changes in shares of total employment for the 1996 to 2000 period are
captured in column 4. With the exception of the financial activities sector,
the shares of total employment among industrial sectors changed very little over
the five year time period. Though far from conclusive, the absence of dramatic
shifts in employment shares across sectors suggests that residents experienced a
relatively stable economic environment for those years.
Table 1
Portage County Employment: 1996-2000
Source:
Wisconsin Department of Workforce Development
The numbers for years 2001
to 2005 as shown in Table 2 tell a different story. Total employment growth
during this time period slowed to an anemic 0.3%. Much of the tepid growth can
be attributed to the woes of the manufacturing sector which posted a staggering
21.6% decline in employment for the period. According to Wisconsin’s
Department of Workforce Development, food and paper manufacturing in Portage
County was responsible for much of the decrease. This decline had a tremendous
impact on the regional economy, given the area’s heavy reliance on
manufacturing. In 2005, manufacturing accounted for 14.6% of total employment
for the county with its share of total employment falling 4.1% over the five
years. It is particularly significant since much of the job loss in
manufacturing occurred during a period of economic expansion for the nation,
indicating structural rather than cyclical causes for the drop.
Table 2
Portage County Employment
Data: 2001-2005
Source: Wisconsin Department
of Workforce Development
Portage 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 Portage County area. All the wage and payroll figures are
calculated in 1996 dollars to capture changes in purchasing power over time.
For the period 1996 to 2000, the average annual real wage for all industries
increased by 5.3%. (This means that the purchasing power of the average wage
increased by 5.3% over this time period.) All industrial sectors showed gains
in real income. In 2000, manufacturing accounted for 23.9% of all payroll
dollars, the highest share of any industrial sector. Manufacturing lagged only
the financial activities and education & health services sectors in annual
compensation, posting an average real wage of $32,362 in 2000. Though real
wages in manufacturing rose by 3.4% over the period, this increase was small
relative to the gains enjoyed by workers in other sectors, causing its share of
total payroll dollars to fall by 0.6%.
Table 3
Portage County Wage and Payroll Data: 1996-2000
*Wage and Payroll figures
presented in 1996 dollars
Source: Wisconsin Department of Workforce Development
The wage and payroll figures for years 2001 to
2005 paint a rather gloomy picture for Portage county workers. Purchasing power
of the average worker declined sharply during this time period. Deflating wages
to 1996 dollars, average annual wages for all industries in Portage County fell
by 7.1%. The financial activities sector was the only bright spot with average
annual real wages growing by 5.9% and its share of total payroll dollars
increasing by 3.3% over this time period. Nearly all other industrial sectors
endured declines in real wages. The trade, transportation, & utilities;
educational & health services; and manufacturing sectors experienced substantial
declines of 8.6%, 10.3%, and 7.3% in average annual real wages, respectively.
These declines are significant because these three sectors accounted for 56.5%
of total employment in Portage County in 2005. Additionally, manufacturing’s
share of total payroll fell by 3.9% over the time period, largely reflecting the
sharp declines in manufacturing employment.
Table 4
Portage County Wage and Payroll Data: 2001-2005
*Wage and Payroll figures
presented in 1996 dollars
Source: Wisconsin Department of Workforce Development
The dramatic change in economic fortunes
between these two periods indicates that many Portage County workers faced
considerably greater economic insecurity after the turn of the century.
Manufacturing workers experienced a significant amount of dislocation with the
sharp fall in the number of manufacturing jobs from 2001 to 2005. The numbers
also indicate that workers from most sectors had to adjust to substantial
declines in purchasing power during these years. Much of the rise in economic
insecurity can be attributed to the importance of the manufacturing sector to
both the state and county 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 Wood and Marathon County as well. The fall off in manufacturing
employment was greater in Wood than either Portage or Marathon counties. The
numbers suggest that Marathon County performed relatively better than Portage
and Wood counties from 2001 to 2005.
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
employment 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 labor both 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. Many of the
institutional protections that traditionally shielded workers from volatility
have disappeared. Implicit contracts between companies and workers that offer
lifetime employment are increasingly rare in a world in which companies face
greater competitive pressures that threaten their very survival. 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 recent speech,
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. Yet these programs does not adequately address the problems
of structural unemployment.
Economists Lori Kletzer
and Robert Litan have proposed “wage insurance” to help workers cope with
structural unemployment. The problem with current unemployment insurance is
that “the payments under UI are limited, generally replacing a little less than
50 percent of the average worker’s previous salary. However, the compensation
payments do not help workers after they take a new job” (Kletzer and Litan,
2001, 2). Permanent dislocations often force workers to take lower paying
jobs. As Kletzer and Litan explain “[w]age insurance would work as follows:
eligible workers would receive some fraction of their wage loss – which could
vary by age and tenure – for up to two years following the initial date of job
loss, but would only be paid when workers found a new job” (Kletzer and Litan,
2001, 4). Unlike unemployment insurance payments which are received while
unemployed, wage insurance provides incentives for dislocated workers to take
new jobs at lower pay. It also provides incentives to take jobs that provide
important on-the-job training to gain the critical skills necessary to adapt to
the changing economic landscape. Proponents argue that such a program enhances
labor market flexibility by facilitating the transition of workers to new types
of employment.
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. Timothy
Sturgeon lists a few examples of the changes that have occurred over this time.
“The largest single employer in the country is not General Motors, but a
temporary employment agency called Manpower Inc. 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:
1996-2000
Source:
Wisconsin Department of Workforce Development
Table 6
Marathon County Employment:
2001-2005
Source:
Wisconsin Department of Workforce Development
Table 7
Marathon County Wage and Payroll Data: 1996-2000
*Wage and Payroll figures
presented in 1996 dollars
Source: Wisconsin Department of Workforce Development
Table 8
Marathon County Wage and Payroll Data: 2000-2005
*Wage and Payroll figures
presented in 1996 dollars
Source: Wisconsin Department of Workforce Development
Table 9
Wood County Employment: 1996-2000
Source:
Wisconsin Department of Workforce Development
Table 10
Wood County Employment: 2001-2005
Source:
Wisconsin Department of Workforce Development
Table 11
Wood County Wage and Payroll Data: 1996-2000
*Wage and Payroll figures
presented in 1996 dollars
Source: Wisconsin Department of Workforce Development
Table 12
Wood County Wage and Payroll Data: 2001-2005
*Wage and Payroll figures
presented in 1996 dollars
Source: Wisconsin Department of Workforce Development
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