The United States’ economic outlook has many people concerned. On Sept. 16, the Fed raised interest rates for the first time in three years. Some experts are predicting the end of the AI bubble, and U.S.-Israeli war with Iran is raising prices on goods of all kinds.
Closer to home, the outlook for Wisconsin’s workers seems to be less dire — but still mixed. That’s according to the latest “State of Working Wisconsin,” a report compiled each year by UW-Madison's High Road Strategy Center.
Laura Dresser is the associate director of the center, and she joins Lake Effect’s Joy Powers to discuss the report’s findings.
“We’ve carried a lot of real strengths through the recovery from the pandemic shutdowns," Dresser says. "There are more and more signs that that period of strength is coming to an end.”
This conversation has been edited for length and clarity.
Joy Powers: My first question to you is kind of both a big and a small question. In just a couple of sentences, how would you characterize the state of working Wisconsin?
Laura Dresser: We’ve carried a lot of real strengths through the recovery from the pandemic shutdowns. There are more and more signs that that period of strength is coming to an end.
JP: Looking through the different findings of the report, I'm not surprised to hear you say that — even if it's a little scary. What are some of the signs that you're seeing right now?
LD: In terms of the negative signs, the most significant one really is the rate of job growth. This is true nationally, where it's ground to a halt, but still is positive — but also in the state of Wisconsin, where we remain below November 2024 levels of employment. We were generating jobs steadily across that pandemic recovery. Really strong job growth across that period. That has basically ground to a halt, and that's softening in the labor market.
The other negative sign that I've really noticed is the Black unemployment rate. The overall unemployment rate has stayed very low — around 3.3%, 3.5%. It's higher than it was a few years ago, but it's still a very low unemployment rate. That's good news for workers. But in the last year, Wisconsin’s Black unemployment rate has risen by an entire percentage point, while the white unemployment rate has remained steady. And even that suggests softening as well. But Black workers in the state are facing the softening first. You can see that in their increase in unemployment and the growing inequality that comes out of that.
The unemployment rate really matters for people who aren't working, because it's about how hard it is to get a job, right? But it really matters to people who are working, too, because they know how long the line at the door is, more or less. If you want to bargain for better wages, or better hours, or time off to go see your kid play soccer, when there's a long line at the door, it’s easier for the supervisor to be like, ‘no.’ When the unemployment rate is lower, workers have a little more power. So, the unemployment is a really important indicator for all workers.
JP: Looking at both job growth and unemployment, how are we comparing to what we're seeing on the national level?
LD: Our unemployment rates are low, relative to the national level. This is partly because our age profile skews older than a lot of other states, which means that we're going to have a low unemployment rate. Our job growth has been low across most of the pandemic recovery. Nationally, jobs have grown much more dynamically than in Wisconsin. But Wisconsin jobs have been growing in that period before November, 2024. So, low unemployment and slower job growth is sort of how we compare nationally.
JP: To me, maybe the best news in this report is about wage growth. What did you find there? The good news.
LD: Our wage data only runs through 2025. But what we find in 2025 is new highest median wage ever in Wisconsin. That's even corrected for inflation. And that new median wage is $26.17 an hour. Across that whole period from 2021 to 2025, we see really steady wage growth. And that's really good news.
The second piece of good news is that it’s the lowest wage workers who’ve seen the biggest gains. The worker near the bottom of the labor market and the worker near the top of the labor market have both seen wages increasing faster than inflation. But for the lower wage worker, it's increased more. That doesn't mean lower wage workers have gotten ahead of anything. But they close the gap a little bit across this period.
Of course, the one caveat here is that, at the national level, inflation is running faster than wages. This happened in 2022 as well, a year of really high inflation. Workers’ wages were set back that year by inflation. The warning sign in this great wage series is that inflation may in fact bring wages down in 2026, in terms of purchasing power.
You can listen to Joy Powers' full conversation with Laura Dresser above.
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