Overall, employment growth and mean hourly wage growth for 'All Occupations', total employment, in the state of Wisconsin lag the nation while median hourly wage growth in the nation lags the state. In addition Wisconsin performed midpack among the states. For example, employment growth in 'All Occupations' was 6.8% with a state ranking of 31st. The mean hourly wage growth rate was 11.7% and the median hourly wage rate grew by 11.0% with respective rankings of 29th and 20th.
Whereas the mean is the simple weighted average, the median is value that splits the sample in half. In other words, the median hourly wage paints a more realistic picture of the actual hourly wage rates earned by workers, because the median hourly wage rate is greater than the hourly wage rate earned by half the employed population. Combined, mean and median can tell us a lot about the distribution of hourly wage rates. For example, if the mean exceeds the median, then there is a large concentration of individuals earning a low wages and a small number of individuals earning very high wages.
Another interesting possibility occurs when there is a significant shift in the number of people earning a higher wage than before such that the median hourly wage growth exceeds mean hourly wage growth. One potential explanation for the prior arises when the labor markets are tight and labor has gained the upperhand in labor market negotiations. The prior sounds familiar given the persistently low state unemployment rate, and the long-run forecasts by many government agencies predicting further tightening of labor markets attributed to substantial labor market shortages in the state of Wisconsin. On the other hand, median growth exceeding mean growth can occur when the state, as a result of pubic policy, is adding more high skill jobs that offer hourly wages above the median and below the mean.
Whereas the tight labor market conditions are not showing up in 'All Occupations', there are a number of major occupations where the median hourly wages are growing faster than the mean hourly wage growth. For example, some of these major occupations include Office and Administrative Support Positions, Forestry, Farming, and Fishing Occupations, and Personal Care and Service Occupations.
The top three fastest growing major occupations in Wisconsin were Personal Service and Care, Computer and Mathematical, and Community and Social Service. The three major occupations contracting the fastest were Healthcare Support, Building and Grounds Cleaning and Maintenance, and Office and Administrative Support. The top three major occupations in terms of median wage growth were Healthcare Support, Protective Services, and Farming, Fishing and Forestry.
While the previous offers a concise understanding of occupational changes in the state over the period, the measures do not provide any perspective into how the state is doing relative to the nation. The shift-share analysis is a tool from regional economics that intentionally addresses this problem by isolating the various sources of regional growth. In its most simplitistic form, growth can come from least three sources. First, the regional growth that is attributed to national trends, the national growth effect. Second, the regional growth attributed to the intricacies of the state industry mix, the industrial mix effect. Third, is what remains after accounting for both of the prior, the regional effect.
Here, we will study the regional effects by major occupation where in the regional effect can easily be described as regional growth net national growth by occupation. In other words, these measures illustrate the occupations facing either competitive advantages or disadvantages in the state relative to the nation. For example, when the regional effect is calculated to be negative, the major occupation is facing some headwinds in the state that are not felt nationally. Alternatively, a positive regional effect suggests something unique in the region is facilitating growth in that major occupation.
There are four quadrants to the figure. Let the top-right quadrant be quadant 1. Quadrant 1 is where both regional effects are positive; namely, an occpuation experiencing both increased employment and higher median wages. The prior can arise following a positive demand shock attributable to favorable conditions in the state relative to the nation. Notice, there are no major occupations in the state of Wisconsin where both regional effects are calucated to be positive over the interval from May 2011 to May 2017.
Moving in a counter clockwise direction, the top-left quadrant is quadrant 2. Here are located the occupations where regional employment growth lags the nation while median hourly wage growth exceeds the nation. These conditions can be attributed to a reduction in the supply of workers in a particular occupation. This can occur when workers are enticed to either leave the state or stay in state but change occupations for relatively better employment opportunities. These include major occupations such as Healthcare Support, Management, and Transportation and Material Moving.
Continuing in a counter clockwise fashion, the bottom-left quadrant is quadrant 3. This is where regional employment growth and median hourly wage growth lag the nation. These conditions can be attributed to negative labor demand shocks. These include, for examples, Business and Financial Operations occupations as well as Arts, Design, Entertainment, Sports, and Media occupations. Last, the bottom-right quadrant is quadrant 4 where regional employment growth exceeds the nation while median hourly wage growth lags the nation; major occupations such as Community and Social Service as well as Production. These conditions can be attributed to an increase in the supply of workers in a particular occupation. This can happen as government policies that encourage youth towards particular occupations shift with changing generational workforce needs.
All occupations that have a median hourly wage less than $17 are growing slower in Wisconsin realtive to nation. There are, however, only 6 occupations that are growing faster in Wisconsin than they are nationally, and all of those exhibit a median hourly wage in excess of $17. In addition, excluding Production occupations, these growing occupations do not make up a very large share of total state employment. In other words, a large number of the major occupations in the state of Wisconsin that pay less than $17 are intense in terms of the share of total state employment. Relative to the state, employment in the majority of the major occupations are growing faster nationally than they are in Wisconsin.
There are three major occupations that have a median hourly wage in excess of $28 and sizeable employment levels, but employment growth in those occupations is lagging the nation. These include Business and Financial Operations Occupations, Healthcare Practictioners and Technical Occupations, and Management Occupations.
Total employment change measured by 'All Occupations' in the state places Wisconsin midpack among the states over the period from 2011 to 2017. After accounting for national trends in the growth of employment, median hourly wage, and mean hourly wage by major occupation, it was shown that, in Wisconsin, no major occupation exhibits positive regional effects in both employment growth and median hourly wage. While six occupations exhibit positive regional effects on employment growth and all pay more than $17, they do not make up a very large share of total employment. Among those occupations with sizeable employment levels there are three major occupations that have a median hourly wage in excess of $28, but employment growth in those occupations is being hindered at the state level.