Wisconsin under Scott Walker is near bottom in new businesses, Mary Burke says

In a Milwaukee Public Radio interview on Sept. 22, 2014, Democrat Mary Burke critiqued Gov. Scott Walker’s jobs strategy, saying the Republican governor "generally believes that you give tax breaks to those at the top and the special interests and somehow it trickles down and creates jobs."

"Well, I’m a business person. That’s not how jobs get created," countered Burke, who formerly served as a Trek Bicycle Corp. executive and state Commerce secretary.

"So, it’s a flawed model and I have a very different model and I lay out in my jobs plan the five core strategies on how we’re going to do this," Burke continued, before making a claim we want to check.

"It means we need to have a more entrepreneurial climate in Wisconsin. That’s one of them (her five strategies). Right now, we’re 46th in the country in terms of new businesses started."

Just the other day, we rated True a Walker claim that Wisconsin ranks 11th "in total business establishment growth," compared with 47th in the years that Burke was Commerce secretary.

So we wondered whether Burke’s claim contradicts that.

As we’ll see, terminology is key.

Different measures

Walker referred to "business establishments," a term that means a business location, such as a new store or factory or farm. A single company can have multiple "establishments," and new "establishments" can be opened by existing or new firms. So it’s a particular measure.

Burke’s terminology is different than Walker’s, and refers to a different measuring stick.

In October 2013, days after announcing her candidacy for governor, Burke said Wisconsin was 49th in the United States in "new businesses created." We rated her statement Mostly True.

Burke cited the Kauffman Index of Entrepreneurial Activity, an annual study produced by the nonpartisan Kauffman Foundation, a Kansas City-based group that works to foster entrepreneurial activity.

Business administration professor Stewart Thornhill, executive director of the Institute for Entrepreneurial Studies at the University of Michigan, told us it is a widely cited measure.

The index uses U.S. Census data to capture the number of new business owners in their first month of significant business activity.

In Kauffman’s 2013 index, Wisconsin tied with Michigan for 48th among the states in the number of entrepreneurs per 100,000 people, ahead of only Nebraska and Minnesota.

So, what’s the landscape now?

Burke’s evidence

To back Burke’s new claim, her campaign cited the 2014 Kauffman index. Here are the states rated lowest in terms of new business owners in their first month of significant business activity:

Rank/State

Entrepreneurs per 100,000 people

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U.S. average

280

1. (tie) Wisconsin and Washington               

170

1. (tie) Minnesota and Indiana

160

1. Rhode Island

140

1. Iowa

110

So, Wisconsin is actually one notch higher than Burke indicated.

On one hand, tying for 45th is an improvement from 48th in the 2013 index.

On the other hand, Wisconsin’s 2014 rate of 170 entrepreneurs per 100,000 people is actually lower than its 2013 rate of 180.

(Montana ranked first in both 2013 and 2014. Its 2014 rate was 610 entrepreneurs per 100,000 people.)

Walker’s response

Walker campaign spokeswoman Alleigh Marré pointed out that in our earlier Burke factcheck, the Kauffman Foundation warned that its index isn’t meant to provide a precise ranking of states. But its report in effect does that by reporting precise ratings and singling out states in the top five highest and lowest groups.

Marré also cited other business-creation statistics, including the Walker claim about total business establishment growth.

But, again, that is a different measure than the one Burke cites.

Our rating

Burke said Wisconsin is "46th in the country in terms of new businesses started."

Wisconsin actually ties for 45th in the well-known Kauffman index, in terms of new business owners in their first month of significant business activity.

We rate the statement Mostly True.

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