Northern Wisconsin rang in the new year with yet more discouraging economic news, with Semco Windows & Doors of Merrill announcing its permanent closure and the loss of at least 120 jobs forever.
It was a fierce sting in a region pockmarked by many such economic stings over the past two decades, and it leaves Merrill and Lincoln County reeling.
But Merrill and Lincoln County are not alone in the northern tier of 23 counties that comprise northern Wisconsin — generally speaking, Marathon and the counties north of it, excluding a few western counties that fly in the suburban orbit of Minneapolis.
In almost all those 23 counties, non-tourism and non-service sector jobs have been disappearing, and with them their populations.
Indeed, Census Bureau data released in the spring of last year showed Wisconsin’s population growing as a whole, by about 21,500 people in 2018. It wasn’t much, but it was enough to keep the state ranked 20th in the U.S. in population.
But the growth was concentrated in urban and suburban areas, mostly in southern Wisconsin. Dane County alone accounted for almost 25% of the state’s total population growth in 2018, for example.
All totaled, between 2010 and 2018, Wisconsin’s net population increased by 126,000 people, but there were population declines or stagnation in about half the counties. Northern Wisconsin’s 23 counties took the brunt of the decline: Eighteen of the 23 suffered population losses, including Oneida County.
Things were much different in suburban and urban southeastern Wisconsin. While Milwaukee County itself was stagnant, gaining just 465 people in that time period, seven of the eight suburban counties surrounding the city saw robust growth, with Waukesha’s net population gain of 13,134 leading the way.
Working-age adults vanishing
But northern Wisconsin is not only bleeding population, it’s losing its working-age population at a faster rate than the rest of the state.
Not that the state as a whole is in great shape. State population estimates based on the 2010 census showed Wisconsin to be on the edge when it comes to working-age adults.
“The traditional working-age population — ages 18 through 64 — will rise modestly from 3,570,000 in 2010 to 3,603,000 in 2020, then begin a slow decline during the 2020s and 2030s to 3,575,000 in 2040, resulting in a 0.1% increase across time,” a state Department of Administration report prepared in December 2013 stated.
But the impacts were projected to be far greater in northern Wisconsin.
“Between 2010 and 2040, the working age population is expected to fall 0.2% statewide,” a 2014 Wisconsin Taxpayer Alliance report stated in an analysis of its own. “In 51 of the state’s 72 counties, the decline will be larger, with northern counties taking the biggest hits.”
Indeed, a combined 11-county area stretching from Barron in the west to Langlade in the east and running to Bayfield, Ashland, and Iron counties in the north — including Oneida County — was projected to suffer an almost 20% drop in the number of working-age residents by 2040, with Price County losing 40% of its working-age population and Bayfield losing 35%.
According to the report, northeastern Wisconsin would suffer declines of more than 10%.
Now, those dour projections are coming to pass, according to a new report by the Wisconsin Policy Forum.
“Notably, the statewide decline in working-age residents has affected most though not all counties,” the report, released in September, states. “Among the state’s 23 most populous counties, 17 have seen their working-age populations shrink since 2011. The working-age population in Wood County (where Wisconsin Rapids and Marshfield are located) has declined by the largest percentage (-5.9%) during that period, followed by Manitowoc County (-4.6%).”
All of which begs the question: Why the decline in working-age adults?
Experts cite a variety of reasons. For one thing, the population as a whole is aging and the working-aged population is declining as the last of the Baby Boomers retire. For another, both younger people and retirees tend to migrate away from the state.
“Whether due to temperature or taxes, residents in their 60s and 70s tend to move out of the state more than they move in,” the Wisconsin Taxpayer Alliance report stated. “The same is true for those in their 20s and early 30s: Students and young professionals leave Wisconsin to attend college, seek employment, or find higher paying work.”
Those factors are undoubtedly in play within the state as well, as young people attracted to cities leave or stay away from the North and other rural areas, and many retiring workers look south, even if it is Lake Geneva.
Draining the North?
But another question which that has popped up is whether the state’s economic development subsidies are helping to drain rather than grow northern Wisconsin, both in terms of jobs and people.
Indeed, as The Taxpayer Alliance pointed out in its 2014 report, there is a strong link between population and job growth.
“If demography is destiny — and it is — then Wisconsin’s economic future is cloudy,” the report stated. “Politicians tout efforts to promote ‘economic development’ and ‘job creation,’ but if worker counts change little, those efforts will be inadequate. Employment cannot expand beyond the size of the work-eligible population.”
That most certainly is true — there is almost a one-to-one relationship between growth in employment and growth in the working-age population — but almost certainly the trend works in the opposite direction as well, i.e., many people leave the area, or never consider moving to the area, because there are no jobs in the first place.
If state policies incentivize job creation in a region and disincentivize job creation in other regions, that creates a drag on population growth in the disincentivized regions. To cite just the most obvious example, if laid-off Semco workers can’t find new jobs in the region, many will likely try to migrate to places where they can. And if graduating students from area high schools and tech colleges can’t find jobs, they, too, will migrate, no matter how much their hearts are in the Northwoods.
All of which should shine a light on what the government is doing statewide in job creation and economic development.
Indeed, since the Wisconsin Economic Development Corporation was created in 2011, its subsidies have been heavily skewed toward Madison and southeastern Wisconsin. Those who support such a tilt — and the regional industrial clusters they create — say, essentially, that a rising tide will lift all boats.
The Foxconn subsidies, to cite just the biggest example, might kickstart an economic boom in southeastern Wisconsin but it will boost jobs and prosperity in northern Wisconsin and across the state, supporters say.
But critics say those subsidies are just economic development dollars taken from the rest of the state, leaving fewer dollars for investment, lowering demand, and ultimately depleting jobs and population.
While the jury might be out on that argument, suffice it to say at the moment that the suburban and urban counties receiving the largess of WEDC’s subsidies since 2011 are the same counties with the strongest population growth, while the counties receiving corresponding pittances in economic development funds have suffered the state’s mot serious population declines.
State Rep. Janet Bewley (D-Ashland) drew attention to these realities in 2018.
As Bewley observed then, between 2011 and 2018, northwest Wisconsin received less than 5% of the award dollars WEDC had distributed at the time, while 73% of WEDC’s awards went to southern Wisconsin, including 43% to southeastern Wisconsin alone.
According to Nina Bertelsen of the University of Wisconsin School of Journalism and Mass Communications, Milwaukee County received more than $440 million in WEDC awards from July 2011 through September 2017 — nearly five times more than the entire northwest region.
That’s even though northwest Wisconsin accounts for 12% of the state’s population, Bertelsen observed, not much less than Milwaukee County’s 16%.
For the north-central counties that include Vilas, Oneida and Forest, that region has garnered even fewer incentive dollars, less than 3% in fact, and many of those dollars are FAB Lab education grants that create no jobs.
Every one of those northern counties lost population between 2010 and 2018, except for Bayfield, which was stagnant, and Vilas, which gained 500 people. Price County, in fact, was the fastest shrinking county in the state, losing 5.4% of its population between 2010 and 2018.
The Lakeland Times
will be examining in detail WEDC awards around the state and in northern Wisconsin, and their impact on economic growth, in future articles.
Interestingly, the creation of an unfair playing field has not been a particularly partisan enterprise.
While completely in control of state government between 2011 and 2018, Republicans, for example, increased the flow of economic development dollars to the southern part of the state, eschewing what some conservatives and libertarians thought would be a wiser and fairer policy of using those dollars to lower tax rates across the board and give every region a chance to compete.
But Gov. Scott Walker’s predecessor, Democrat Jim Doyle, also suppressed economic development in the North, not merely assigning tourism to be the region’s lone niche in his industrial policy but creating onerous comprehensive planning and land-use laws and rules to thwart any type of serious economic development north of Wausau.
Walker reined in the anti-development and anti-property rights policies of the Doyle era, but his administration too viewed tourism as the only needed economic driver of the region, ignoring studies showing that tourism businesses thrive best in diversified economies where they can avail themselves of larger labor pools and where they can tap into larger local markets to help sustain themselves, especially in off years.
Gov. Tony Evers’ Democratic administration has continued the trend. The governor’s first budget loaded up Milwaukee and Madison with goodies and removed aid to northern Wisconsin, such as his decision to remove $15 million that the Legislature put into the budget for a regional crisis center to serve northern Wisconsin.
Then, too, the governor appointed an economic development advisory team that was loaded with Madison and Milwaukee viewpoints, and, during the budget process, attempted to impose a gas tax that would have been devastating to the northern region.
Evers also vetoed a $250,000 grant for Lakeland STAR School/Academy, biennial funding for FAB labs, which are critical in rural areas, and a Department of Workforce Development grant to Northcentral Technical College for workforce training in county jail facilities.
While the present doesn’t offer up much in the way of economic promise, the future could be worse.
For one thing, the one industry that is vibrant in northern Wisconsin — tourism — depends in the long run on a diversified economy that can provide the infrastructure and labor pools required to keep tourism itself sustainable.
But already in the Northwoods, seasonal tourism businesses have experienced acute labor shortages as student and overall populations decline.
Without any serious economic development on the horizon, those population shortages are expected to continue, and that is especially so when it comes to the number of children living in northern Wisconsin.
A 2017 report by Tamarine Cornelius, an analyst with the Wisconsin Budget Project, underscored the dramatic expected decline of the children’s populations in rural Wisconsin.
“In some areas of northern and central Wisconsin, the number of children is expected to decline by up to a quarter over the next 25 years, presenting a host of challenges to communities that are already struggling to stay economically vibrant,” Cornelius wrote. “Communities in rural areas with declining numbers of children often have difficulty providing enough resources for their school districts, which often have substantial fixed costs and must shoulder the costs of transporting students across a large geographic area.”
According to Cornelius’s research, the number of children in Wisconsin is projected to grow modestly over the next several decades, but, she wrote, the growth will be concentrated in a few already-populous areas of the state, including southern Wisconsin, the Fox Valley, and the suburban communities around Minneapolis-St. Paul.
The number of children was expected to grow by 87,000 between 2015 and 2040, a 5.9% increase, Cornelius wrote, citing projections by the state’s Department of Administration. Most of the growth is expected to occur in Dane County, Brown County, and Waukesha County, along with several counties in the Minneapolis orbit.
But, Cornelius observed, it was a completely different story in rural and northern Wisconsin.
“The rural counties of northern and central Wisconsin have the largest declines in the number of children in percentage terms,” she wrote. “These counties are already sparsely populated, so while the actual number of children the counties are expected to lose is in many cases fairly small, it represents a large share of the county’s child population.”
Bayfield and Price counties were expected to take the biggest hits in children’s population, but Oneida and Vilas County are projected to lose more than 10% of their 19-and-under population by 2025.
The dwindling number of children in the region poses severe challenges, Cornelius wrote. For one thing, she underscored, they come on top of significant declines that have already occurred.
“Between 2010 and 2015, many rural counties saw double-digit declines in the number of children living there,” she wrote. “For example, the number of children living in Bayfield County dropped by 13% between 2010 and 2015 alone.”
A decline in the number of children can pose financial hardships for school districts, Cornelius asserted. Then, too, as reported above, there are fewer teens to take summer and other seasonal tourism jobs.
But, as Cornelius also observed, the declining number of children in Wisconsin’s northern, rural areas is a sign of a larger problem.
“These communities are not able to offer residents the same economic opportunities that are available in other parts of Wisconsin,” she wrote. “To solve this problem, state policymakers should make the investments necessary to ensure that residents — regardless of where they live in the state — have access to excellent schools, jobs that pay family supporting wages, and safe communities.”
Of course, that brings the population conundrum full circle — right back around to the need for a level playing field when it comes to the state’s involvement in economic development. Right now, that level playing field does not exist, a topic that will be examined in future articles.
Richard Moore is the author of the forthcoming “Storyfinding: From the Journey to the Story” and can be reached at richardmoorebooks.com.