Gov. Tony Evers will deliver his second State of the State address this coming Wednesday, and it would be a missed opportunity if he did not discuss Wisconsin’s workforce shortage and ever-increasing health care costs. These are the top two issues facing our state’s economy, and the governor should use his platform to lead on both.
In Wisconsin, as with every other state, businesses need customers, schools need students and governments need taxpayers. All of these need workers.
Admittedly, this is an overly simplistic summary of how our economy and society functions, but it helps dramatize what is the biggest economic and societal challenge our state is facing now, and for the coming decades, if we don’t act.
Wisconsin has had below replacement birthrates since the 1990s compounded by more people leaving the state than coming in. The result is a worker shortage, which – among other things – is also a customer, student and taxpayer shortage.
In the past, we have relied on a steady stream of immigrants and migrants to fill the jobs we have had. In fact, during World War II, we recruited workers from the South to overcome a labor shortage in Wisconsin’s factories. Our history is key to our future, but there are two obstacles.
First, our federal immigration system needs to be modernized to make it easier for immigrants with in-demand skills to legally stay or come to Wisconsin. This is especially true for foreign students who study at one of Wisconsin’s fine colleges or universities. They receive a world-class education and often want to say here to pursue their career but are too often denied the necessary visa.
Second, Americans are the least mobile we have been since at least the 1940s. That means it is harder to get people to migrate from one state to another, but it’s not impossible – especially when you tell people about Wisconsin’s diverse economic opportunities, great communities, low cost of living and high quality of life.
On talent attraction, Wisconsin is already doing that with a targeted ad campaign. But, the effort needs more funding and support from policymakers if we are going to reverse demographic trends. The fact that we spend more money annually to lure out-of-staters to vacation here than we do to convince them to relocate here is a disservice to the economic needs of our state.
The most recent economic survey conducted by Wisconsin Manufacturers & Commerce shows 75 percent of private sector employers are having trouble finding workers. That survey is the 10th in a row, dating back to summer 2015, to show at least two-thirds of employers having challenges finding the workers they need.
The same economic survey shows that businesses throughout Wisconsin are also struggling with the spiraling cost of employer-sponsored health care. Business leaders rate health care costs as the second biggest challenge they face behind workforce.
Wisconsin has the second-highest health care prices in the country, according to a study by the Health Care Cost Institute (HCCI). The HCCI data also shows Milwaukee’s health care prices are 29 percent above the national median and Green Bay’s are 25 percent higher.
Study after study show high costs and high quality are not mutually exclusive. A study commissioned by the Business Health Care Group through GNS Healthcare in Cambridge, Massachusetts found unequivocally zero correlation between cost and quality.
One solution that should be pursued at the state level – and is already being pursued by the Trump Administration – is to provide greater transparency on both the actual cost of health care services, as well as the outcomes. Unfortunately, hospitals and health care providers are pushing back strongly – including taking legal action – to stop this. What other product or service do you buy that you don’t actually know the cost of before making the purchase?
There also needs to be incentives for consumers to benefit from making informed choices based on cost and quality. Currently, our health care system has neither the transparencies, nor the incentives that allow consumers to make informed choices about the best care at the lowest price.
We will hear many priorities from Gov. Evers and the legislature over the final months of this session, and it is up to us to keep them focused on what will move our economy forward. Workforce and health care costs cannot be left out of the conversation.
Kurt Bauer is the President and CEO of Wisconsin Manufacturers & Commerce.