'Wisconsin is recovering more slowly than other parts of the region,' according to the CEO of the Minneapolis Fed.

The economic recovery to the coronavirus pandemic in the Midwest has been mixed, Neel Kashkari, president and CEO of the Federal Reserve Bank of Minneapolis, said Tuesday. 

Wisconsin has been recovering, but the upturn has not been even across all industries, Kashkari said during a virtual presentation at the Midwest Economic Forecast Forum.  

“Wisconsin started recovering more quickly than Minnesota did, but then the recovery has been slower over the last six months, over the last year,” Kashkari said. 

The event was presented by the Wisconsin Bankers Association in partnership with the Illinois Bankers Association, Michigan Bankers Association, Minnesota Bankers Association, Montana Bankers Association and South Dakota Bankers Association.

Kashkari pointed out that climate conditions have had a greater negative impact on other Midwest states than on Wisconsin. 

“A lot of Wisconsin farmers have done pretty well,” Kashkari said. “The drought has been less severe there, but, of course, dairy producers have had their own challenges in Wisconsin.” 

Since 2000, the state has lost nearly 70% of its dairy farms. 

Read more: Dairyland in Distress

Other industries like lumber have seen their prices rise and fall during the pandemic, Kashkari said. 

“Obviously, that’s good for the lumber mills,” Kashkari said. “But if you’re in the construction business, that obviously affected your bottom line and affected affordability for your customers.” 

There are multiple factors that contribute to determining if a state is recovering, Kashkari said, but the pandemic could still make an impact on the local economy. 

“I would say Wisconsin is recovering more slowly than other parts of our region, but overall, our region as a whole, looks a lot like the U.S. economy,” Kashkari said. “And of course, what happens with the variants, what happens with COVID, is going to continue to have a big effect on the economic recovery.” 

Even without local government mandates, Kashkari said the omicron variant could have a significant impact on the economy. 

“I’m talking about if omicron continues to spread as rapidly as it is, we’re going to continue to see disruptions just because workers are going to get sick, workers are going to have to stay home,” Kashkari said. 

More:Half of working women in Wisconsin are thinking about quitting, a new survey says

Across the country, businesses are competing with each other for workers, which is not a new phenomenon. 

In the years before the pandemic, Kashkari said the Federal Reserve saw “a curious thing.”  

“Employment rate kept going down, but wages were staying low, and inflation was still low,” Kashkari said. “Which suggests to me that there was still slack in the labor market, and it was not tied to raising interest rates.” 

Kashkari estimates the country is missing 4 million to 6 million workers from the labor force. 

But since the pandemic started, Kashkari said evaluating the economy is “more complicated now.” 

“Businesses are always saying ‘there’s a worker shortage,’” Kashkari said. “By many measures, it actually looks like the demand for workers is exceeding the supply, and the evidence is wages are now climbing across the board and they’re climbing fastest for the lowest-income workers.”