Brian Dake

Area Development, a leading national publication covering site selection and facility planning, has recognized the State of Wisconsin for excellence in economic development with its 2018 “Gold Shovel Award.”

Wisconsin is one of just five states to receive the prestigious award for having achieved significant success in terms of job creation and economic impact for projects undertaken in 2017. The award comes as 2017 was a record year for economic development in the state, with 59 companies from Wisconsin and around the world agreeing to locate or expand Wisconsin. Those projects are expected to create or retain nearly 30,000 jobs and result in more than $11.6 billion in capital investment statewide.

Area Development’s Shovel Awards recognize the state economic development agencies – including the Wisconsin Economic Development Corporation – that drive economic development through innovative policies, infrastructure improvements, processes and promotions. In the competition, states are judged based on the number of high-value added jobs per capita, amount of investment, number of new facilities and industry diversity.

Golden Shovel awards were given to states in five categories based on their populations. Wisconsin was the winner among states with a population between 5 million and 8 million. Other Gold Shovel winners include Texas (12 million or more); North Carolina (8 million to 12 million); Kentucky (3 million to 5 million); and Nevada (less than 3 million).

The U.S. economy added 157,000 jobs in July, below expectations, as the job market cooled but remained strong amid a tightening labor market. The unemployment rate fell to 3.9 from 4 percent in June, the Labor Department reported on Friday.

Wage growth remained unchanged with average hourly earnings up only 2.7 percent for the year despite fewer workers who need jobs.

The Federal Reserve is likely to raise interest rates at its next meeting in September to 2.25 percent from 2 percent, in an effort to keep the labor market from reaching a boiling point.

“Overall, the report did little to change perceptions that the labor market is tight but has yet to begin overheating, and it keeps the Fed on track for a rate hike next month,” said Curt Long, chief economist with the National Association of Federally Insured Credit Unions.

On Wednesday, the federal Departments of Health and Human Services, Labor and the Treasury issued a final rule to help Americans struggling to afford health coverage find new, more affordable options.

The rule allows for the sale and renewal of short-term, limited-duration plans that cover longer periods than the previous maximum period of less than three months. Such coverage can now cover an initial period of less than 12 months, and, taking into account any extensions, a maximum duration of no longer than 36 months in total. This action will help increase choices for Americans faced with escalating premiums and dwindling options in the individual insurance market.

In a recent release of three reports on the current state of the individual insurance market, Centers for Medicare & Medicaid Services (CMS) data reveal serious problems. While enrollment data show stable enrollment for subsidized exchange coverage, the number of people enrolled in the individual market without subsidies declined by an alarming 20 percent nationally in 2017, while at the same time premiums rose by 21 percent. Many state markets experienced far more dramatic declines, with unsubsidized enrollment dropping by more than 40 percent in six states, including a 73 percent decline in Arizona.

Short-term, limited-duration insurance, which is not required to comply with federal market requirements governing individual health insurance coverage, can provide coverage for people transitioning between different coverage options, such as an individual who is between jobs, or a student taking time off from school, as well as for middle-class families without access to subsidized ACA plans. Access to these plans has become increasingly important as premiums have escalated for individual market plans, and affordable choices for individuals and families have dwindled.

Back-to-school shopping is in full swing, and shoppers in Wisconsin can get many school supply items tax free starting Wednesday.

It’s part of the state’s first ever sales tax holiday that runs from August 1-5. The tax exemption is part of a bill Governor Scott Walker signed into law in April.

Tax free items will include items such as binders, notebooks and glue. Clothing less than $75 is also on the list.

Electronics, such as desktop computers and tablets are on the list as long as the item is $750 or less.

For a more comprehensive list of items included in the sales tax holiday, click here.

President Donald Trump’s administration signed off Sunday on Gov. Scott Walker’s $200 million plan to lower Affordable Care Act premiums.

Under Walker’s plan, consumer costs are expected to go down by 3.5 percent on average next year for individuals getting insurance through the marketplaces established by the act.

Wisconsin taxpayers will spend $34 million on Walker’s plan. The remaining $166 million will come from federal taxpayers.

Walker and lawmakers approved their plan in February but needed permission from the Centers for Medicare and Medicaid Services because the federal government would fund the bulk of it.

They received the federal approval Sunday, and within hours Walker put his signature on it during his stop here. The plan will take effect Jan. 1.

Under the plan, the number of people getting insurance on the Obamacare marketplace would dip in 2019 to an estimated 184,700.

The program — dubbed the Health Care Stability Plan — is targeted at consumers who buy individual health insurance through the Affordable Care Act but who make too much money to qualify for federal subsidies to lower their premiums. Those consumers saw their premiums go up by 44 percent in 2018 in Wisconsin.

Walker’s plan will help insurers cover the cost of patients with claims of $50,000 to $250,000. With the Walker plan covering half those costs, insurers will be able to charge lower premiums.

Under the plan, premiums on average will drop by 3.5 percent from current levels and will be 11 percent lower than they would have been in 2019 without the plan, according to his administration. Walker noted not everyone will see a reduction in their premiums.

Consumers and government spending powered the economy to a 4.1% rate of gross domestic product growth in the second quarter, the fastest pace in almost four years. Growth was revised up in the first quarter to 2.2% from 2%.

Activity boomed in the second quarter and the growth does not seem to be due to one-off factors, as some economists had feared.

Over the past year, the economy has expanded at a 2.8% annual pace, up from a 2.6% annual rate in the first quarter. Economists say this is strong enough to keep putting downward pressure on the unemployment rate.

Fed Chairman Jerome Powell has said that strong growth is one reason the central bank should keep raising interest rates. With inflation moderate, the Fed is expected to stay on the pace of a quarter-percentage point rate hike every three months.

Many analysts think growth should stay strong, helped by stimulative fiscal policies, such as tax cuts. There is concern reported in various business surveys that trade disputes could slow activity, but so far there is little evidence of any disruption in the economic data.

President Trump and European Commission President Jean-Claude Juncker on Wednesday announced that they have reached a deal to begin resolving a dispute over tariffs and avoid a trade war.

“We agreed today first of all to work together towards zero tariffs, zero non-tariff barriers and zero subsidies for the non-auto industrial goods,” Trump announced in a joint statement with Juncker in the White House Rose Garden.

U.S. Secretary of Agriculture Sonny Perdue announced that the U.S. Department of Agriculture (USDA) will take several actions to assist farmers in response to trade damage from unjustified retaliation.

President Trump directed Secretary Perdue to craft a short-term relief strategy to protect agricultural producers while the Administration works on free, fair, and reciprocal trade deals to open more markets in the long run to help American farmers compete globally. Specifically, USDA will authorize up to $12 billion in programs, which is in line with the estimated $11 billion impact of the unjustified retaliatory tariffs on U.S. agricultural goods. These programs will assist agricultural producers to meet the costs of disrupted markets.

“This is a short-term solution to allow President Trump time to work on long-term trade deals to benefit agriculture and the entire U.S. economy,” Secretary Perdue said. “The President promised to have the back of every American farmer and rancher, and he knows the importance of keeping our rural economy strong.

Unfortunately, America’s hard-working agricultural producers have been treated unfairly by China’s illegal trading practices and have taken a disproportionate hit when it comes illegal retaliatory tariffs. USDA will not stand by while our hard-working agricultural producers bear the brunt of unfriendly tariffs enacted by foreign nations. The programs we are announcing today help ensure our nation’s agriculture continues to feed the world and innovate to meet the demand.”

While the lack of available talent has been a common complaint amongst businesses over the past several years, data from the U.S. Bureau of Labor Statistics suggest average wages for private sector employees in Wisconsin have increased faster than the United States as a whole over roughly the past two years.

In May, for example, the average weekly private sector wage in Wisconsin increased 6.4 percent from the same time in 2017, to $869.66. Nationwide, the increase was 3.1 percent, to $923.98. Account for inflation, and Wisconsin’s average wage was up $29.36 per week while the country’s was up just $2.27 per week.

Wage gains outpacing the national average are not a one-month phenomena for the state, either. Wisconsin averaged a year-over-year increase of 5.7 percent in the first five months of 2018, compared to 2.7 percent for the U.S. For all of 2017, the state averaged an increase of 3.6 percent, while the country averaged 2.8 percent.

The wage growth roughly coincides with when the state’s unemployment rate dipped below 4.5 percent. It has continued to trend downward, reaching a seasonally-adjusted 2.8 percent in April and May.

The largest increase statewide has been in financial activities, up an average of 8.1 percent. Professional and business activities wages increased an average of 3.8 percent, education and health services averaged a 3.1 percent increase, leisure and hospitality improved 2.1 percent, and construction averaged just a 1.9 percent increase.

Statewide, wages in the manufacturing sector increased an average of 4.7 percent, but pay for production workers was up just 2.9 percent.

On Friday, Governor Walker  sent a letter to President Donald Trump requesting a federal disaster declaration for six northwestern Wisconsin counties that sustained flood damage in June. The request is for federal assistance to help local governments recover from the disaster in Ashland, Bayfield, Burnett, Clark, Douglas and Iron counties.

“Federal damage assessments showed more than $13.1 million in damage to public infrastructure in northwestern Wisconsin. This is an area that is still recovering from major flooding that occurred in 2016,” said Governor Walker. “We are hopeful that officials with the Federal Emergency Management Agency (FEMA) will understand how important it is for our state and these communities to receive federal disaster assistance to help recover from this disaster.”

Earlier this week, FEMA, Wisconsin Department of Transportation, Wisconsin Department of Natural Resources and Wisconsin Emergency Management conducted damage assessments across the impacted area with local officials. They viewed damaged roads, bridges and washed out culverts. FEMA estimated $13.1 million in debris clearance, emergency protective measures and damage to roads, bridges and other infrastructure.

If approved, FEMA’s Public Assistance Program would help communities recover some of the costs incurred through responding to the floods, protecting citizens, removing debris, and repairing roads and other infrastructure. FEMA provides 75 percent of eligible costs. The State of Wisconsin and local communities impacted share the remaining 25 percent.

The program is not for businesses or homeowners as the level of damage in these areas, unfortunately, does not currently meet requirements for federal relief. Those with personal property or businesses that were damaged due to the flooding, should contact 2-1-1 for possible resources.