Jobs return to pre-pandemic numbers, but the workforce is shrinking

By: - March 10, 2023 6:15 am
Mural depicting workers

Mural depicting workers painted on windows of the Madison-Kipp Corp. by Goodman Community Center students and Madison-Kipp employees with Dane Arts Mural Arts. (Erik Gunn | Wisconsin Examiner)

Wisconsin now has almost as many jobs as it did before the COVID-19 pandemic three years ago, according to the latest numbers from the state labor department, but fewer people are working or available to work than even one year ago.

The state unemployment rate inched down slightly in January to 2.9%, closing in on the record 2.8% low set the same month a year ago, the Wisconsin Department of Workforce Development (DWD) reported Thursday.

“We’re down near historic lows on the unemployment rate, and everybody that is out there that wants a job is getting one,” said Dennis Winters, DWD’s chief economist, at a briefing. “Employers are still looking for workers.” 

With continued hikes in interest rates by the Federal Reserve as it aims to curb inflation, a recession could be in the future, he said, but he doesn’t expect that to have a major impact on Wisconsin. “Even if we do go into a mild recession, we don’t see that [unemployment] number climbing very much just because the workforce is flat.”

Wisconsin employers reported 2.99 million non-farm jobs in January, a gain of nearly 56,000 over January 2022, the department reported. The jobs numbers are calculated based on a survey of a sample of employers.

The January 2023 jobs number is only 8,000 fewer than in February 2020, the last peak before the COVID-19 pandemic, Winters said. 

Some of Wisconsin’s biggest job gains in January over the same month a year ago were in construction, which added more than 5,000 jobs since January 2022 and manufacturing, which added more than 9,000 jobs. 

Private sector services gained 36,500 jobs in the one-year period, including more than 10,000 in retail and wholesale trade, more than 9,000 in health care and more than 8,000 in leisure and hospitality.

A separate survey, conducted of households and asking whether people are working or looking for work, found 3.07 million people in the state’s labor force and just under 3 million people who said they were employed, according to DWD’s January report. Both the labor force and the number of people employed were down by about 24,000 people from January 2022.

The drop is small, less than a percentage point, but long-term trends show no sign of easing. 

“This is a function of demographics and the baby boomers aging out” and retiring from the workforce, Winters said. “And this is true for not only Wisconsin, but the Upper Midwest, the U.S., Western Europe, developed countries, and now we know, even China.”

With the mismatch between job openings and people available to fill them, Winters emphasized the need to bring into the workforce people who have historically been on the sidelines. That makes training and expanding the workforce the top priorities, he said — “the need to try to recruit everybody we can, get them into the workforce, get them skilled up, get them on the job.”


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Erik Gunn
Erik Gunn

Deputy Editor Erik Gunn reports and writes on work and the economy, health policy and related subjects, for the Wisconsin Examiner. He spent 24 years as a freelance writer for Milwaukee Magazine, Isthmus, The Progressive, BNA Inc., and other publications, winning awards for investigative reporting, feature writing, beat coverage, business writing, and commentary.