American Bridge 21st Century says layoffs show economy has tanked under Scott Walker

Job creation was the No. 1 issue for Republican Scott Walker in his first term as Wisconsin governor, and the state’s economic performance will be examined in depth as his presidential campaign gets underway.

The left-leaning American Bridge 21st Century tried to kick-start that conversation with a blog post July 1, 2015 that carried this headline:  "Walker’s economy gets worse."

The item said: "Scott Walker’s Wisconsin: So far in 2015 over 6,685 people have been laid off, already more than in all of 2014."

It continued: "How much has Scott Walker tanked Wisconsin’s economy? In addition to having the slowest job growth in the Midwest, Wisconsin layoff notices just passed the total layoffs in all of 2014 and are set to be the highest of Walker’s tenure by 4,000."

That’s a lot of baggage to unpack.

We have done numerous items about Scott Walker and jobs, this is the first about layoffs.

Is the group right that layoffs for 2015 have surpassed those in 2014, and that the situation is evidence the economy has "tanked"?

How the system works

In Wisconsin, businesses are required to file warning notices with the state when they anticipate ending employment for more than 50 workers. Wisconsin’s law is more strict than federal law, which requires notices for layoffs of more than 100 workers.

As part of its claim, American Bridge linked to a June 30, 2015 report by WKOW-TV in Madison, which compared the number of people covered by layoff warning notices received by the state so far in 2015 with those for all of 2014.

When we looked at the state Department of Workforce Development web site, we could not find the same numbers, but did see the same trend.  As of July 8, 2015, the tally for 2015 was 8,627, compared with 7,239 in all of 2014.

But the warning notices are a lousy tool to assess the economy -- and especially employment.

Why? Some layoffs never trigger a notice, because they don’t reach the 50 person threshold. Also, the notices don’t always mean lost jobs. In cases when a company changes hands, the old firm is required to file a notice, even if all the workers will retain their jobs with the new firm.

So it is wrong to equate the notices with bodies out the door, as American Bridge did.

The "data is interesting, but not very useful," said Brian Jacobsen, an economist at Wells Fargo and a professor at Wisconsin Lutheran College. "If you think about the number of employees affected, it's relatively small."

Jacobsen noted layoffs are sometimes announced and then phased in over a number of years.

"Thankfully, some of those notices change, resulting in fewer employees being affected," he said. "Some employers may err on the side of giving a warning even if there is a chance the layoffs won't occur."

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Another factor that the layoff notices don’t reflect is the number of jobs that have been added to the economy.

Based on the most solid numbers available, through the first four months of 2015, state private sector employers added 13,300 jobs. That compares with 10,600 jobs in the same time frame in 2014. (Numbers for May are preliminary)

Other indicators also suggest more of an upswing rather than a tumble.

-- The Metropolitan Milwaukee Association of Commerce economic trends report from July 1, 2015. "Currently the metro area’s economic environment is marked by a solid majority of indicators in aggregate pointing upward, led largely by an improving job situation," said Bret Mayborne, the MMAC’s economic research director.  "In addition, local housing and real estate indicators have been contributing to this growth trend over the past nine months."

-- The most recent quarterly survey by ManpowerGroup Inc. Issued June 8, 2015, the report said employers in Wisconsin as well as the Milwaukee metro area expect "bullish" and "prosperous" hiring prospects in the coming quarter.

Our rating

American Bridge 21st Century says that Wisconsin’s economy tanked under Scott Walker and uses layoff notices filed with the state as evidence.

But the notices do not represent bodies out the door and, though higher than last year, they are not a reliable economic indicator.  Indeed, other reports say that employers overall added about 13,000 jobs in the first five months of the year, a pace higher than a year ago.

We rate the claim False.

(Editor's note: The paragraph about 2015 job totals was edited for clarity, to reflect the figure is for the first four months of 2015 -- the ones for which final monthly numbers are available. Final numbers for May 2015 are not available.)