WisBusiness: Labor economist notes problems for economic development in Wisconsin

By Tracy Will


WISCONSIN DELLS — Retired state labor economist Terry Ludeman opened his remarks at a Wisconsin Economic Development Association conference this week by saying, “I’m here to provide you with a list of things you may not wish to know.”

He told the audience about a litany of problems facing Wisconsin’s economic future, including aging population, declining wages for workers and pitfalls for economic development.

The only way to solve this predicament, Ludeman said, is to develop businesses that add to the wealth of communities, improve the tax base so government can improve its infrastructure and work to improve the wages and quality of life for those earning the lowest wages in our communities.

“Because economic development is enhancing the life of the community,” Ludeman said.

Ludeman said Wisconsin is a low-wage state, ranked 31 out of 50 with average wages per Wisconsin wage-earner of $36,000 per year, below the national average of $41,000. Neighboring Illinois ranks seventh at $42,000, followed by Minnesota and Michigan each with average wages also around $42,000 per wage-earner.

“In the 1970s, we were better than Minnesota, now we trail them,” Ludeman said, “and they are considered an agricultural state. We still beat the dickens out of Iowa though.”

Household income was higher in Wisconsin, he said, because there are 1.4 wage earners in each household, ranking household income at 18th place nationally.

“But household income only depends on our demographic makeup, which we can’t maintain,” he said, in part due to our aging population. Ludemann added that the average state household income dropped four places since 2000, due to the state’s aging population.

To solve the problem, Ludeman said that maintaining wealth in the community is paramount, which means attracting businesses that invest capital to produce goods. In communities where businesses are owned by outsiders, all the wealth produced is in wages for workers, not capital.

Ludeman said one final problem creates a climate that prevents the success of economic development.

“Over past 25 years we’ve developed an anti-government attitude,” he said.

“We have said that investment in government is counter-productive. Investments made by our governments on behalf of its citizenry is as important or more so than private investment,” he said.

“Stop believing the myth that trickle-down works. Giving back tax money to the wealthiest does not result in money for the lowest-tier,” Ludeman said. “I don’t want to get political so I’ll say this quietly. This propaganda notion that welfare is socialism while corporate welfare is capitalism is ridiculous.”