20 one-dollar bills with a hand erasing one of them.
While wages in Wisconsin went up last year, most workers didn’t feel the benefit. Instead, as prices went up, “three years of wage growth were erased” by inflation, according to data in a new report from the Center On Wisconsin Strategy (COWS), a think tank based on the UW-Madison campus.
Wisconsin’s median real wage — what a typical worker makes adjusted for inflation — declined by more than 5% in 2022. But larger gains made by low-wage workers kept them ahead of inflation and slightly shrank the state’s racial wage gap.
“Wages grew in 2022, but not fast enough to keep pace with inflation, so purchasing power dropped for the first time in a decade,” according to “The State of Working Wisconsin 2023” released Sept. 1 in time for Labor Day. Adjusting for inflation, the median wage in Wisconsin dropped from $23.27 in 2021 to $22.02 in 2022.
A tight labor market with low unemployment, however, helped low-wage workers keep up with those sharp price hikes. Unemployment in Wisconsin hovered around 3% in 2022, which the report says gave workers leverage to negotiate better conditions at their jobs: “With a year of low unemployment rates, workers have the security to seek better pay, schedules, and benefits.” Lower unemployment rates mean fewer workers compete for each job opening, making replacement workers harder to find and hire.
“It’s especially evident that workers with lower wages have made the strongest gains,” says Laura Dresser, associate director of COWS, in a news release. “Their progress is helping reduce some of Wisconsin’s most troubling inequities.”
Black men and Hispanic women posted the biggest wage gains in recent years, according to the report. But large gaps based on race and gender still persisted: The median wage for Black women in Wisconsin was about $8 an hour less than the median wage of white men — $17 instead of $25. Racial disparities also extended to unemployment rates, though they narrowed slightly in 2022.
The report also noted that fewer Wisconsin women are working due in part to struggles finding child care, which the report expects to continue: “The state’s decreasing investment in child care is likely to further challenge working women in this state.” Last month, Gov. Tony Evers called a special session of the Legislature “to prevent a looming collapse of the state’s child care industry and ensure child care is affordable and accessible.” Republican lawmakers are expected to adjourn the session immediately without passing spending measures favored by the governor.
Wisconsin had more jobs than ever before in 2022, topping 3 million, but fewer of them were union jobs. Since 2011, according to the report, the percentage of Wisconsin workers in unions has dropped from 14% to 8%. “The Wisconsin decline is three times faster than the national decline and the greatest decline among neighboring states.”
About 19% of public sector workers were members of a union in 2022; two decades ago, more than half belonged to a union. About 5% of private sector workers in the state are members of a union.
Among neighboring states, the report groups Wisconsin with Indiana and Iowa as the worst for union decline, while Minnesota’s union rate of about 15% has held steady since 2011.
Some industries in Wisconsin bucked national jobs trends over the course of the year. The construction sector grew more in Wisconsin than it did nationally. The information sector shed jobs in the state while adding them in the overall U.S. economy. Government and the leisure and hospitality sector shrank faster in Wisconsin than they did elsewhere.
An Aug. 25 report from the Bureau of Labor Statistics found that while Madison’s median wage mirrored the national median wage in 2022, workers in some fields did better than others. Healthcare, construction and protective service workers in Madison tended to earn more than their national counterparts. Those in STEM and legal fields, as well as in media and entertainment, tended to earn less.
