UW-Madison economist Noah Williams said it would be inaccurate to blame government regulation for the economic slowdown that’s accompanied the COVID-19 pandemic.
“Economic activity started falling early in March, before there were any restrictions in place,” Williams said. “What the lockdowns essentially did was keep that activity at a very low level. Things deteriorated much more quickly than people expected.”
Williams, speaking to the Milwaukee Rotary Club, said Wisconsin’s hopes for a so-called “V-shaped recovery,” with a rapid return to normalcy coming on the heels of a rapid slowdown, were largely dashed along with the nation’s.
Consumption and sales have rebounded relatively quickly, but unemployment is still very high. Williams said that about one-third to 40 percent of the spring’s layoffs are turning out to be permanent.
He forecast the decline in GDP at about 35 percent.
Overall, Wisconsin has fared similarly to the rest of the nation, with serious depression in the leisure and hospitality industry, the beginnings of an employment uptick, and significant pivots to online retail rather than brick-and-mortar.
“There’s nothing unique about Wisconsin; we’ve followed a lot of the general trends,” Williams said.
Wisconsin is doing slightly better than the national average, though, when it comes to unemployment. Williams told WisBusiness.com this could be due to Wisconsin’s heavy reliance on manufacturing, with employment in that sector about double the national average.
Conversely, Wisconsinites aren’t employed in leisure and hospitality at very high rates.
“In April employment in that sector was down about 59 percent in Wisconsin, but the sector only made up less than 10 percent of employment in the state before the crisis,” Williams said.
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-By Caroline Kubzansky