Here is my full column that ran in the Washington County Daily News earlier this week. Verily, if Wisconsin does not stop the bleed of people in their working years, many of the other raucous political debates become somewhat moot.
We are going to return to a topic that this column broached several weeks ago because policymakers in Madison fail to appreciate the severity of what is to come. Wisconsin is losing population. This is happening in a time of national population growth and the negative consequences will be unavoidable. The time to act is now.
According to the U.S. Census Bureau, the United States added 1.8 million, or 0.6%, people between 2020 and 2022. Over the same period, Wisconsin lost 3,372 people, or 0.06%, of its population. After counting all of the people who moved out of the state and subtracting all of the people who moved into the state, Wisconsin’s population is declining despite the fact that the nation, as a whole, is gaining population.
A deeper look into the data reveals an even more dire situation. In the prime working years between 25 and 59 years old, Wisconsin lost nearly 39,000, or 1.5%, of its people. This is the age group that fills jobs, pays the most taxes, and spends the most on things like houses, vehicles, groceries, and the rest that fuels the consumer economy. Even worse, men are leaving the state at a rate faster than women. Given that on average more men participate in the labor force than women, that means that the decline in the available labor force is more pronounced than the overall number suggests.
It gets worse. Coming up behind those working adults, Wisconsin’s population is declining even faster. Between the ages of birth and 19 years old, Wisconsin lost almost 41,000, or 2.8%, of its people. That means that there will be fewer people entering the workforce to replace those exiting.
The only age group that is increasing in Wisconsin is at the top of the age groups. Wisconsin gained almost 67,000, or a whopping 4.6%, people above the age of 60. This age group tends to be at the end of their working career and are drawing down their consumption as they enjoy their well-earned silver years.
All of this is over just a two-year period. As demographics drive destiny, Wisconsin’s destiny is in trouble. As Wisconsin loses its prime labor force, the issue is compounded by the societal shift to a shrinking labor participation rate. Since its peak labor participation rate of 74.7% in December of 1997, more Wisconsinites have been steadily declining to participate in the labor force. As of January 2023, only 64.7% of Wisconsinites were working. There has been a slight uptick in participation in 2023 as people are forced back to work to cope with inflationary prices, but time will tell if that signals the beginning of a trend reversal.
If not reversed, the results of Wisconsin’s declining population are inevitable. As businesses struggle to find workers to fill their jobs and produce their goods, they will look to other states to find their workforce. As businesses leave, the population decline will accelerate.
Meanwhile, those remaining in Wisconsin will see their taxes continue to increase. Wisconsin’s state and local governments have shown a bipartisan unwillingness to restrain spending and there are fewer and fewer people to tax. Again, the overall numbers mask the severity of the issue. Wisconsin’s progressive income tax and reliance on property taxes means that the tax burden is borne by an even smaller subset of the population. That smaller subset are those leaving the state at the highest rate. As the increasing tax burden concentrates in fewer people, more people will seek relief in other states.
Taken to the end of the road, Wisconsin faces economic collapse and government bankruptcy. Fortunately, we are at the beginning of a trend and there is ample time to change direction. That change will take a concerted effort by both parties to change the incentives and disincentives that are driving the trend. Public policy should be focused on easing the burden of government to attract more people to the state while removing the incentives that keep people from participating in the labor force. We must stop punishing people for working hard and raising a family while we reward people for living off of the taxpayers’ misplaced kindness.
While politicians bicker in Madison, people are voting with their feet. That trend will not stop until someone chooses to stop it. Stopping it will become increasingly difficult as it gathers momentum. The time to act is now. Small changes now reduce the need for big, painful changes later.