Regional Economics Northwest Regional Economy Economic information specifically for the Northwest Region of Wisconsin is provided in this chapter. The following data and related analysis addresses population, labor force, unemployment, industry employment, wages, income, housing, and poverty for the ten-county region. Labor Force, Unemployment, Industry, and Wages For labor force data, the universe is the civilian non-institutionalized population, persons 16 years and older, who are not in jails or chronic-care hospitals. This population is divided into those who are in the labor force and those who are not. The ratio between the labor force and the civilian non-institutional population is the labor force participation rate. The labor force is composed of those with a job, the employed, and those without a job and actively looking for one. Persons without a job and not looking for one are not considered to be in the labor force. Labor Force Composition and Participation The size of the labor force is dependent on population growth and composition. Over the three decades prior to 1990, labor force growth occurred as the population of 16-45 year olds ballooned and participation rates, especially for women, increased. The decade of the 1990 s saw a slowing in labor force growth, although the number of participants increased. Because of the change in the composition of the population in the past decade, the labor force will not experience the same amount of growth. is measured in several ways according to the Wisconsin Department of Workforce Development. Local Area Unemployment Statistics (LAUS) are based on where a person lives and includes anybody working, including the self-employed. In other words, it measures the employed residents of a county. The primary source is the Current Population Survey (CPS) conducted each month by the Census Bureau. CPS data counts employed persons at their place of residence and counts them only once even if they hold multiple jobs. CPS data also includes those persons with a job but not at work who earn no wages, e.g., workers on unpaid leaves of absence; unpaid family workers employed 15 hours or more during the survey period; and a significant portion of agricultural and domestic workers, but excludes persons under age 16. 6-1
Nonfarm Wage and Salary (NFWS) is an estimate of jobs based on the county an employer is located in. In other words, it measures jobs in the county. It does not include self-employed persons. The primary source is the Current Statistics program (CES) and is derived from the Quarterly Census of and Wages (QCEW), which is gathered from quarterly reports submitted by over 8 million U.S. employer establishments covered by unemployment insurance. The QCEW program counts jobs at the place of work and count separately each job held by multiple holders. NFWS data takes QCEW data and adds railroad workers, students in work study, church employees, private school workers, etc.; therefore, NFWS are always larger than QCEW figures. Table 6.1 indicates the number and industry for jobs in the Northwest Region using the North American Industry Classification System (NAICS). The numbers are based on NFWS data. The number of Northwest Region residents in the total civilian labor force decreased by 1,132 from May 2009 through May 2010. However, the number of total non-farm employment increased significantly by 1,593 between the same time period. This is extremely interesting as it means one or both of two things are happening in the Northwest Region. First, more people are taking on additional second or multiple jobs to make ends meet; and/or, persons once no longer thought to be in the workforce or previously not looking for work have opted to return to the workforce to earn additional money. 6-2
Table 6.1: Industry for the Northwest Wisconsin Region 2nd Qtr - 2009 2nd Qtr - 2010 Numeric Change 2009-2010 % Change Total Civilian Labor Force 94,163 93,031-1,132-1.20% 86,116 84,935-351 -1.37% Total Non-Farm 61,628 63,221 1,593 2.58% Agriculture, forestry, fishing & hunting 645 702 57 8.84% Mining 30 49 19 63.33% Utilities 431 425-6 -1.39% Construction 1,916 1,980 64 3.34% Manufacturing 11,061 11,462 401 3.63% Wholesale trade 2,115 2,246 131 6.19% Retail trade 7,089 6,913-176 -2.48% Transportation & Warehousing 2,807 2,726-81 -2.89% Information 681 681 0 0 Finance & Insurance 1,542 1,527-15 -0.97% Real estate and rental and leasing 538 541 3 0.56% Professional, scientific & technical services 1,342 1,294-48 -3.58% Management of companies and enterprises 909 934 25 2.75% Administrative & support, waste management 1,466 1,542 76 5.18% Educational services 6,012 6,229 217 3.61% Health care and social assistance 8,078 8,095 17 0.21% Arts, entertainment and recreation 1,406 1,442 36 2.56% Accommodation and food services 6,081 6,070-11 -0.18% Other services (except public administration) 1,700 1,781 81 4.76% Public administration 5,799 6,226 427 7.36% *Source: U.S. Census Bureau Local Dynamics; DWD - QWI Online [NAICS] Table 6.2 shows unemployment rates for the Northwest Region by county, region, and state for the years 2003 through 2010. The seasonally unadjusted unemployment rate for the Northwest Region rose to 12.3% by the beginning of 2011. Only Douglas County (7.5%) fell below the State and National unemployment rate. The remaining nine counties were all above 10% unemployment. Rusk County posted the highest rate at 15.1%. 6-3
Table 6.2: Unemployment Rates as of Jan. 2011 (not seasonally adjusted) 2003 2004 2005 2006 2007 2008 2009 2010 Ashland 8.4% 5.9% 5.8% 6.0% 5.7% 9.8% 10.2% 10.3% Bayfield 7.0% 6.2% 5.9% 6.4% 6.3% 10.7% 8.2% 12.9% Burnett 5.2% 5.4% 5.3% 5.8% 6.6% 11.4% 10.3% 11.1% Douglas 5.8% 5.7% 5.1% 5.0% 5.0% 7.8% 8.0% 7.5% Iron 8.4% 8.8% 7.9% 8.2% 8.1% 11.3% 12.9% 11.1% Price 6.3% 4.6% 4.7% 5.6% 4.9% 8.5% 11.0% 12.2% Rusk 7.4% 6.4% 6.4% 6.6% 7.0% 12.3% 13.2% 15.1% Sawyer 6.3% 5.9% 5.9% 6.4% 6.8% 11.5% 9.2% 13.4% Taylor 6.3% 5.2% 5.3% 5.0% 5.5% 12.1% 11.5% 13.8% Washburn 7.1% 6.1% 6.0% 6.6% 6.7% 10.3% 9.4% 12.0% Northwest Region 6.6% 5.8% 5.8% 6.2% 6.0% 10.1% 9.9% 12.3% Wisconsin 5.6% 4.9% 4.7% 4.7% 4.9% 7.7% 8.6% 8.2% Source: WI DWD, Office of Economic Advisors, LAUS Projections The Wisconsin Department Workforce Development Office of Economic Advisors has developed employment by industry projections to the year 2018 for the Northwest Region. Total non-farm employment is expected to increase by 2,180 jobs. As shown in Table 6.3, the largest percentage growth is expected in the Hospitals. It must be noted that these projections have been significantly revised from the previous 2006 data reported in the last CEDS document published last year that was based on CES/QCEW data which preceded the financial collapse of September 2007. The difference in the revision of the Northwest Region baseline Total All Non-Farm employment estimates equals 2,170 less jobs from the 2006 data, and 4,440 less than the 2018 employment projections for the Northwest Region. It is not known at this time whether the reductions in region-wide employment estimates are due to circumstances surrounding the financial crises or if they factor in the recent population emigration statistics. 6-4
Table 6.3: Industry Projections for Northwest Workforce Development Area, 2008-2018 Industry Title 2008 Estimated 2018 Projected 2008-2016 Change 2006-2018 Percentage Change Total, All Non-Farm 68,200 70,380 2,180 3.2% Construction/Mining/Natural Resources 3,130 3,270 150 4.6% Manufacturing 12,360 11,280-1,080-8.8% Food Manufacturing 1,430 1,430 0 0% Wood Product Manufacturing 4,380 4,040-340 -4.1% Machinery Manufacturing 1,800 1,730-70 -6.5% Trade 10,420 10,400-30 -0.2% General Merchandise Stores 1,950 2,030 90 4.4% Transportation and Utilities (Including US Postal) 4,210 4,360 140 3.4% Financial Activities 2,180 2,220 30 1.6% Education and Health Services (Incl. State and Local Gov., Ed., and Hosp.) 13,370 15,130 1,760 13.2% Educational Services (Including State and Local Government) 5,850 5,930 80 1.3% Hospitals, Nursing and Residential Care Facilities (Incl State & Local Govt) 2,120 2,480 360 16.9% Leisure and Hospitality 8,060 8,930 870 10.8% Information/Professional/& Other Svc s 6,690 7,170 480 7.2% Government (Excluding U.S. Postal, State and Local Educ. and Hosp.) 7,880 8,130 250 3.2% Source: Office of Economic Advisors, Wisconsin Department of Workforce Development April 2011 1. is rounded to the nearest ten. Numbers may not add due to rounding. 2. does not include self-employed and unpaid family workers. Railroad workers are included. 3. An estimate of non-covered employment is included in NAICS 8131 (Religious Organizations), but not in any other industries. 4. Government includes tribal owned operations, which are part of Local Government employment. 5. Information was derived using 2008 CES & QCEW data. To the extent possible, the projections take into account anticipated changes in Wisconsin s economy from 2008 to 2018. Note: unanticipated events may affect the accuracy of the projections. 6-5
Wages Average annual wages for 2010 in the Northwest Region and the State by industry employment are shown in Table 11. Annual wages throughout the Northwest Region are generally one-fifth (20.6%) less than the Wisconsin state average. Only one industry classification exceeded the State average Transportation and Warehousing. The three largest industry classifications by workers located in the Northwest Region are: 1) Manufacturing; 2) Health Care and Social Sciences; and, 3) Retail Trade. Wages were down statewide in 12 of 20 categories, while the Northwest Region fared better with only four categories seeing a reduction in average annual wages. Interestingly, 12 of 20 employment categories in the Northwest Region made gains in closing the gap in wage disparity with state average wages. Eight of the 12 categories where the Northwest Region made gains occurred in categories at the state level that saw decreases in annual average salaries. The four categories in the Northwest Region that saw an annual reduction in wages were in the finance, professional and management sectors. 6-6
Table 6.4: Northwest Region 2010 Average Annual Wage by Industry Average Annual Wage Northwest Region Wisconsin % of State # Employed 2009 2010 2009 2010 2009 2010 2009 2010 All Industries $31,116 32,064 $40,152 40,404 77.5% 79.4% 64,889 63,221 Agriculture, Forestry, and Hunting & Fishing $27,255 24,384 $31,107 29,184 87.6% 83.6% 683 702 Mining $29,685 30,756 $50,514 53,304 58.8% 57.7% 30 49 Utilities $53,163 55,392 $71,706 73,560 74.1% 75.3% 431 425 Construction $39,126 40,260 $48,951 46,644 79.9% 86.3% 1,916 1,980 Manufacturing $36,222 37,884 $47,277 48,720 76.6% 77.8% 11,061 11,462 Transportation / Warehousing $41,442 42,036 $37,482 36,972 110.6% 113.7% 2,807 2,726 Wholesale Trade $42,249 46,128 $53,091 51,396 79.6% 89.8% 2,010 2,246 Retail Trade $21,807 21,828 $24,174 25,128 90.2% 86.8% 7,089 6,913 Information $56,328 32,820 $51,066 46,428 110.3% 70.7% 1,037 681 Financial and Insurance $34,953 32,820 $55,299 53,484 63.2% 61.4% 1,542 1,527 Real Estate & Rental & Leasing $20,403 22,764 $33,153 31,968 61.5% 71.2% 538 541 Professional, Scientific, & Technical Services $41,592 38,544 $58,320 55,848 71.3% 69.0% 1,342 1,294 Management of Companies and Enterprises $36,042 34,164 $63,471 63,552 56.8% 53.8% 909 934 Administrative & Support, Waste Management $38,124 24,252 $27,492 27,960 138.7% 86.7% 1,466 1,542 Educational Services $33,438 42,144 $43,173 50,964 77.5% 82.7% 6,012 6,229 Health Care / Social Assistance $31,473 31,536 $41,484 41,376 75.9% 76.2% 8,078 8,095 Arts/ Entertainment/ Recreation $21,846 23,316 $26,238 24,024 83.3% 97.1% 1,134 1,442 Accommodation/Food Services $11,055 11,232 $12,933 13,284 85.5% 84.6% 6,081 6,070 Other services (Except Public Administration) $20,919 21,552 $24,075 24,036 86.9% 89.7% 1,700 1,781 Public Administration $30,729 31,656 $42,450 40,464 72.4% 78.2% 5,799 6,226 Source: U.S. Census, QWI Online 6-7
Per Capita Personal Income Per capita personal income (PCPI) is widely used and accepted as an indicator of economic well-being of residents of an area. Personal income is the sum of net earnings, other labor income, proprietor s income, rental income, personal dividend income, personal interest income, and personal transfer (government) receipts. In 2009 Wisconsin had a per capita personal income (PCPI) of $37,373. This PCPI ranked 21st in the United States and was 94 percent of the national average, $39,138. The 2009 PCPI reflected a decrease of -1.4 percent from 2008. The 2008-2009 national change was -2.6 percent. PCPI is defined as a location s total personal income divided by its total resident population. Table 6.5 presents the 2009 Per Capita Personal Income by county and its percent of the State s average income (the most recent year for which data is available. Rusk County (69.5%) had the lowest income, and Price County (86.9%) had the highest PCPI in the Northwest District. The Northwest Region had the lowest Per Capita Personal Income of the 11 regions in the State of Wisconsin. Table 6.5: Per Capita Personal Income by County December 2009 Percent of Percent of Nation BEA - PCPI State Rank in State* Ashland $32,079 85.8% 80.9% 42 Bayfield $32,020 85.7% 80.7% 43 Burnett $30,281 81.0% 76.4% 59 Douglas $30,404 81.4% 76.7% 57 Iron $30,377 81.3% 76.6% 58 Price $32,486 86.9% 82.0% 37 Rusk $25,970 69.5% 65.5% 71 Sawyer $31,667 84.7% 79.9% 46 Taylor $29,243 78.2% 73.8% 64 Washburn $29,543 79.0% 74.5% 61 Northwest Region* $30,402 81.3% 76.71% 11 Wisconsin $37,373 100.0% 94.3% ------ U.S. $39,635 106.1% 100.0% ------ Source: US Census: Labor Statistics: BEA; StatsAmerica; DWD OEA: & BearFacts * Rank in State based on total of 72 counties and 11 identified regions in Wisconsin 6-8
Low wages are prevalent in the Northwest Region, resulting in high poverty rates. There are several reasons for the low wages that are endemic in the Region. Approximately one-fourth of all employment is in the leisure and hospitality, trade, and accommodation and food services industry classifications, which have many seasonal and part time jobs. Therefore, the people in these jobs do not work the standard number of hours in a year and that reduces the average annual wage. In addition to being part time and seasonal, many of these jobs are in trades where hourly wages are low. Furthermore, because of the seasonality of many jobs, there is more turnover and every time someone starts a new job, they generally start at the lowest wage. Table 6.6 provides 2009 poverty data for the ten (10) Northwest Region counties in comparison to the State and National figures. This information is useful to counties, municipalities, and local units of government, as it is often required when seeking grant funds. Table 6.6: County Level Poverty Rates 2007 2008 2009 Ashland 17.5% 14.9% 18.0% Bayfield 11.5% 12.1% 13.7% Burnett 13.2% 14.1% 15.2% Douglas 14.6% 11.7% 14.1% Iron 11.6% 13.7% 15.0% Price 11.1% 12.1% 15.1% Rusk 14.4% 14.2% 17.1% Sawyer 12.3% 15.3% 18.2% Taylor 11.1% 12.1% 12.7% Washburn 12.4% 12.2% 15.0% NW Region 13.0% 13.2% 15.4% Wisconsin 10.8% 10.5% 12.4% United States 13.0% 13.2% 14.3% Tourism Impact to the Local Economy Tourism is a key segment of the economy for many of the counties in the Northwest Region. This section provides information on the economic benefit derived by residents and governments in the ten counties by traveler expenditures for 2010. The ten counties of the Northwest Region are located within Wisconsin s Northwoods Region and are a vacationland for local and distance travelers. Local events and natural resources significantly contribute to the number of visitors to the region. According to Census 2000, over 28 percent of total housing units in the region are for seasonal, recreational, or occasional use. Businesses that cater to tourism, such as motels, 6-9
resorts, campgrounds, Bed & Breakfasts, and retail stores complement the hundreds of miles of biking, snowmobiling, and ATV trails as well as the many parks, golf courses, historic sites, waterfalls, ski hills, crosscountry ski trails, Lake Superior, and area attractions. According to the Wisconsin Department of Tourism, traveler spending in the Northwest Region in 2010 was $730,116,214. This represents over a 10-percent increase from 2009, but still has not recovered completely from the $100-million loss sustained following the high water mark set in 2008. Table 6.7 gives traveler expenditures from 2008 to 2010 in the Northwest Region. Of the ten counties, travelers spent the most dollars in Sawyer, Bayfield, and Douglas Counties. Table 6.7: Northwest Region Traveler Expenditures County 2008 2009 2010 % change 2009-2010 Ashland $64,574,340 $61,724,687 $64,099,294 3.85% Bayfield $134,149,491 $130,203,365 $118,799,311-8.76% Burnett $61,100,677 $57,242,164 $60,779,272 6.18% Douglas $110,502,902 $105,553,091 $108,872,326 3.14% Iron $70,957,036 $66,335,739 $72,195,205 8.83% Price $53,187,107 $50,963,125 $50,183,833-1.53% Rusk $40,285,285 $37,336,032 $37,008,280-7.32% Sawyer $143,783,165 $137,299,744 $136,337,711-0.70% Taylor $25,385,376 $24,239,071 $23,713,168-2.17% Washburn $59,488,256 $57,976,082 $58,127,814-0.26% NW Region 763,413,635 $662,538,009 $730,116,214 10.20% Statewide $13,115,616,078 $12,091,745,226 $12,303,015,785 1.75% Source: Wisconsin Department of Tourism, April 2011 According to Table 6.8, the number of full-time equivalent jobs in the region supported by traveler expenditures equaled 17,829 a mere one-percent increase from 2009. 6-10
Table 6.8: 2010 Direct Economic Impact of Traveler Expenditures in Northwest Region 2009-2010 2009 2009 State 2009 2010 FTE 2010 2010 Resident 2010 Revenue 2010 %Chg Jobs %Chg Income %Chg Captured %Chg Local Revenue Captured 2010 County Expenditures Ashland $64,099,294 3.85% 1,513 5.80 $39,641,222-4.19 $7,871,608 4.05 $3,316,472 4.40 Bayfield $118,799,311-8.76% 3,419-8.75 $41,116,000-2.94 $10,060,000-8.76 $5,481,000-8.76 Burnett $60,779,272 6.18% 1,434 8.14 $37,588,008-6.09 $7,463,898 6.38 $3,114,695 6.74 Douglas $108,872,326 3.14% 2,567 4.95 $67,330,417-4.25 $13,369,885 3.34 $5,633,011 3.69 Iron $72,195,205 8.83% 1,703 10.66 $44,648,015-6.29 $8,865,810 9.04 $3,735,351 9.41 Price $50,183,833-1.53% 1,185-1.58 $18,315,000-4.18 $4,801,000-1.54 $2,615,000-1.54 Rusk $37,008,280-7.32% 874 0.92 $22,887,201-7.10 $4,544,740-0.69 $1,914,792-0.35 Sawyer $136,337,711-0.70% 3,205-0.71 $48,693,000-4.51 $11,840,000-0.70 $6,451,000-0.69 Taylor $23,713,168-2.17% 558-0.71 $14,665,044-4.29 $2,912,055-1.98 $1,226,911-1.65 Washburn $58,127,814-0.26% 1,371 1.93 $35,948,253-2.31 $7,138,290 0.45 $3,007,509 0.80 Total Region $730,116,214 10.20% 17,829 1.01 $370,832,160 1.01 $78,867,286 1.01 $36,495,741 1.06 Source: Wisconsin Department of Tourism, April 2010 The economic benefit of tourism extends far into the counties within the Region, making a contribution to schools and local governments. Local revenues (property tax, sales taxes, lodging taxes, etc.) collected as a result of tourist spending were almost $36.5-million in 2010. State revenues (lodging, sales and meal taxes) amounted to almost $79-million as a result of tourism in the Northwest Region. 2009 2010 %Chg 6-11