Friday, November 21st, 2014
True
Bloggers
Wisconsin is "dead last in income growth" among midwestern states during Gov. Scott Walker’s term.

Bloggers on Thursday, August 14th, 2014 in various blogs and Internet comments

Bloggers say Wisconsin ranks last in income growth since Scott Walker became governor

In the heat of a political campaign, no advantage gained by one side goes unnoticed by the other.

We saw that again after rating True a very narrow and specific claim by Gov. Scott Walker that Wisconsin leads 11 other Midwestern states in personal income growth over the one-year period that ended with the first quarter of 2014.

Shortly after Walker blasted out that news, readers and Internet bloggers were contending the picture is not nearly so bright if more of Walker’s tenure is considered.

"What if you examine the entire span of of the Walker administration?" reader and frequent commenter Jim Spice asked in a comment Aug. 14, 2014, on JSOnline.com and on Facebook.

His conclusion: "I downloaded the data set from the BEA web site, and ran the numbers using 2010 Q4 as the starting point, and HEY, what do you know?! WI ranks DEAD LAST in income growth among those 12 states!"

Others made similar claims, including a blogger on the liberal Daily Kos site.

Are they right?

Digging into the numbers

We started with data from the federal Bureau of Economic Analysis, the same source Walker used. The data counts wages, property income and government assistance as "personal income."

We crunched the numbers using that starting point at the end of 2010, the last quarter before Walker took over from Democratic Gov. Jim Doyle. The end point was the first quarter 2014, the latest for which data was available.

First, there is no "Midwest" category in the agency’s geographical breakdowns. Two of the regions the agency uses include states often associated as Midwestern peers for the Badger State.

One is the "Great Lakes" region (Wisconsin, Illinois, Indiana, Michigan, Ohio). The other is the "Plains" region: (Iowa, Minnesota, Missouri, Kansas, Nebraska, North Dakota and South Dakota).

Here's what we found:

State

Personal Income growth since 4th quarter 2010

Rank among 50 states

North Dakota

32.81%

1

Iowa

15.70%

10

Nebraska

15.23%

11

South Dakota

13.53%

18

Ohio

13.42%

19

Kansas

12.61%

31

Indiana

12.48%

33

Minnesota

12.29%

34

Michigan

12.01%

37

Illinois

11.73%

39

Missouri

10.91%

43

Wisconsin

10.87%

44

 

By comparison, in Doyle’s last term, which coincided with the Great Recession, Wisconsin ranked 7th of the 12 states and ranked 26th nationally, one point above the U.S. average.

When we asked the Bureau of Economic Analysis if the 2010 starting point makes sense for judging 2011 and forward, spokesman Thomas Dail said it was correct to use the fourth quarter of 2010 as the baseline.

That allows a comparison of the pre-Walker income level to Walker’s first full year in office, 2011 and forward, he said.

We asked three experts to examine the BEA figures. They were Brian Jacobsen, chief portfolio strategist for Wells Fargo Funds Management; Laura Dresser, a labor economist and associate director of the Center on Wisconsin Strategy; and Dale Knapp, research director at Wisconsin Taxpayers Alliance.

All three cautioned that comparing quarters can lead to distortions -- and we noted that the last quarter before Walker saw an unusually large jump in personal income. That was due in part to an early shift in Medicaid payments to that quarter, the Walker campaign correctly points out.

The statistical effect is a bigger starting point for Walker, meaning any gains on his watch look smaller than they would otherwise.

Another defensible starting point is the first quarter of 2011, our experts said, which takes in Walker’s first three months. But that distorts in the other direction because the Medicaid payments -- having been shifted earlier -- look much lower. Using that baseline, Wisconsin’s growth was second-best in the Midwest.

The Walker campaign doesn’t argue for using the 2011 base. They, and our experts, prefer to look at annual growth rates which smooth out the volatility you see in quarterly data. From 2010 to 2013, we found Wisconsin ranked 9th of the 12 Midwest states.

To be sure, anomalies pop up in the numbers once in a while due to governmental policies.

In his claim of "We’re #1," Walker reached back one year from the latest quarter to a quarter that saw the biggest single-quarter loss in personal income in three years. That of course made the state look better in the comparison he chose.

The loss was partly due to Washington’s "fiscal-cliff legislation," which served to artificially boost incomes in late 2012, thereby depressing personal income in the quarter that was Walker’s one-year base.

And partisans pick the presentation that best makes their case -- in this case, both Walker and his critics chose to compare quarterly figures rather than annual rates.

Walker could have chosen an annual comparison -- 2012 to 2013, which is the most recent for which a full calendar year is available. But by that measure Wisconsin is middle of the pack on growth.

There’s no one right way, our experts said.

"I think it is perfectly honest and accurate to say income grew 10.9 percent from the fourth quarter of 2010 to the first quarter of 2014," Jacobsen said, referring to the comparison that shows Wisconsin last in the Midwest.

Our rating

After Walker correctly pointed out that personal income growth is the best in the Midwest for the last year, commentators alleged that Wisconsin is "dead last in income growth" during Gov. Scott Walker’s three-plus years in office.

The quarterly figures do put Wisconsin at the bottom, based on the starting point endorsed by the agency that compiled the information.

Reader beware: Any such quarterly comparison has its flaws, as we’ve seen in these related claims. But by the numbers, the blogosphere’s claim is on target. We rate it True.