Sauk County manufacturing, farming, giving way to tourism and retail, UW economist says

Sauk County manufacturing, farming, giving way to tourism and retail, UW economist says

Unemployment rates in the badger state may be some of the lowest on record, but the types of jobs being created are generally on the low or high end of the wage scale, resulting in an absence of mid-level jobs, according to according to Dr. Steven Deller, economist with UW-Madison.

Those mid-level jobs — with an annual wage between $30,000-$50,000 — are typically what is needed to support a family and own a home in Sauk County and other counties across the state.

Deller was one of three speakers at the annual Economic Outlook event held Jan. 16 at the River Arts Center in Prairie du Sac. The event was hosted by the Sauk Prairie Chamber of Commerce in partnership with the Bank of Prairie du Sac.

Deller presented an economic forecast for 2018, which evaluated economic indicators for local, regional and national areas.

With Wisconsin’s unemployment rate being as low as it is, Deller said employers typically offer higher wages to be competitive. This often occurs in a tight labor market. However current numbers aren’t reflecting wage increases, he said.

“That could mean employers are getting creative in attracting employees,” Deller said. It could be in exchange for no wage increase, employers might be offering other benefits such as keeping health care premiums down.”

He said Sauk County has a high concentration of farms, manufacturing, retail and food service jobs, with the latter two stemming from Wisconsin Dells tourism.

The farming industry in general has been declining since the recession a decade ago, with farms consolidating. However, Deller said, there has been an increase in special commodities such as hops, vinegars and even hemp.

Manufacturingis also expected to change, seeing growth in small scale custom manufacturers and the arrival of automation.

A study conducted by MIT estimates more than 50 percent of manufacturing jobs have an 80 percent chance of becoming automated in the future.

“That means employees are slowly being replaced,” Deller said. “That’s cause for concern.”

The retail experience is also changing. Wal-Mart industries recently announced the closing of 63 Sam’s Club stores. Sears is pairing down the size of its stores or closing them outright. Internet juggernaut Amazon is creating the type of competition some brick-and-mortar retailers can’t keep up with.

“It’s about what’s convenient,” Deller said. “The retail industry is shifting. It’s not going to go away completely, but it is shifting.”

Because of that, other industries such as transportation and courier-type services like FedEx and UPS are growing.

“The accommodation and food service industries are experiencing a major growth spurt, and there is no indication it is going to slow down,” Deller said. “Places like Wisconsin Dells are driving the tourism industry.”

He said the economy of Sauk County is shifting, and stakeholders have to decide if they want to encourage it. Jobs that require high school or little formal education are filling the largest job sector. “Wisconsin is generating jobs that aren’t very good, don’t require formal education and don’t pay a lot,” Deller said.

Deller said although Wisconsin wasn’t hit as hard by the recession as others across the nation, Wisconsin’s recovery is going slow. “And which group is going to benefit from reducing U.S. corporate tax rates? Shareholders,” Deller said. “Because they have stock. In general, individuals with lower incomes can’t afford stock.”