Testimony of Wisconsin Economic Development Corporation Secretary and CEO Missy Hughes
Assembly Committee on Small Business Development
February 8, 2022
I want to thank the Assembly Committee on Small Business Development and Chairman Oldenburg for inviting me to update the committee on the status of Wisconsin’s economy as we continue to recover from the pandemic.
There are many reasons to celebrate the progress our state has made. Wisconsin’s economy continues to grow robustly in every corner of the state. Unemployment has dropped from double-digits in the early days of the pandemic to the lowest levels in decades, while participation in the labor force reaches new highs. Wages are up and new businesses are emerging.
There is plenty of other good news regarding the recovery. Consider the following:
- At the height of the pandemic in April 2020, Wisconsin’s unemployment rate reached a record high of 14.8%. It is now at an all-time low of 2.8%, and Wisconsin is one of only 11 states with an unemployment rate below 3.0%
- In April 2020, the number of unemployed Wisconsin residents hit an all-time high of 453,000. By December 2021, only 86,000 Wisconsin residents were unemployed – a record low. According to our economist, we should not expect a number lower than 86,000 because there are always a certain number of people in transition in the system – moving between jobs and looking for jobs.
- Wisconsin’s total wages and salaries dropped $7.5 billion from 4th quarter 2019 to 2nd quarter 2020. Since then, the state’s wages and salaries have increased by $20.5 billion.
- Businesses have revived. There are now 10,000 businesses more than there were at the end of 2019.
- And finally, in 2021, Wisconsin gained population because 5,500 additional people moved into the state.
In my role at WEDC, I see these positive developments every day as I travel the state and visit with business and community leaders. If the committee will allow me, I’d like to share some of the conversations I have had recently.
First, I’d like to talk about Park Falls. As many of you know, this is a town in northern Wisconsin, in the heart of timber country, the Northwoods. Park Falls has a large paper mill located right in its downtown, and it has dominated the city’s history. Due to ongoing changes and challenges in the paper industry, the mill is now closed. As I traveled there a few weeks ago, I expected my conversations would be dominated by concerns about the mill and its future.
Instead, I heard from a community on the move. Starting with a $250,000 Community Development Investment grant from WEDC, the city and local business leaders have moved to dramatically reinvigorate the downtown – removing blighted buildings, helping a community clinic expand its services, renovating the theater and several restaurants, and beginning to rebuild a park. In other words, as the mayor said, they’re putting the park back in Park Falls. Most importantly, they are taking steps to move forward, and control their future.
I attended a ribbon cutting of a beautiful new community bank – aptly named Forward Bank, where I met community members who are ready to support each other, their local leaders, and businesses. Two companies – Weather Shield and St. Croix Rods – are now the largest employers in the area, employing hundreds of people, and continuing to grow and thrive. We discussed the city’s ongoing need for housing and transportation so these and other businesses can ensure that their workers and their families can live nearby, attend local schools, and be part of the community. I cannot fully convey to you the excitement the residents of this tight-knit community have for the future they’re creating together.
Jumping over to southwest Wisconsin, I’ve visited Prairie du Chien twice in the past few months. Prairie du Chien was one of the first communities I visited when I came to WEDC, and back then, the conversations I had with local leaders were about “smart shrinking,” and preparing for a scaled-back future. This was a community that feared its best years were in the past.
Today, there are at least 14 new businesses in the city, including four on the city’s main street, that have received Mainstreet Bounceback grants from WEDC. The Main Street Bounceback grants provide $10,000 to businesses that move into previously vacant commercial spaces. Funded with $50 million in American Rescue Plan Act dollars, these grants not only help the new businesses that are moving in but ensure that those downtown businesses that withstood the pandemic aren’t left alone amid a slew of empty storefronts.
The effect in Prairie du Chien, and other communities that we’ve seen that have been transformed by the grants, is an exciting mix of new and old businesses, that encourage folks to get out of their cars and walk around. Besides The Sweet Tooth candy store, and the Barbershop – two new businesses that are dreams come true for their owners – I visited the Picket Fence, a quilting store. The Picket Fence is one of those longstanding downtown businesses – around for 25 years, including 16 years on Prairie du Chien’s main street.
The Picket Fence has been around a little too long to qualify for a Main Street Bounceback grant. But here’s what’s inspiring about their business: During the pandemic, Louann, the owner, began offering a Facebook Live session every Tuesday night, a tradition that’s been going on for more than 70 weeks now. The owner estimates she sells $1,500 to $2,000 worth of goods online every week through those sessions, and she has no intention of giving up this new source of revenue.
Prairie du Chien is just one of the places where local leaders and businesses are using Main Street Bounceback grants to transform their communities. Since WEDC started distributing the grants late last summer, nearly 2,400 businesses in 70 of our 72 counties have received them. Think about that for a minute – in less than a year, nearly 2,400 new businesses have opened or expanded in our state. Based on applications in the pipeline with our partners around the state, we fully anticipate deploying all the funds in the next few months.
Finally, for the past two weeks, I’ve been visiting communities like Prairie du Sac and Kenosha, that received the first round of Workforce Innovation Grants. You may recall that in December, Governor Evers awarded 12 grants totaling $59.5 million. Another round of applications will start in the coming weeks, to reach a total of $100 million. These grants encourage grassroots solutions to our biggest workforce challenges by allowing local business, community, education, and nonprofit leaders to identify what their communities need and then giving them the resources to meet those needs.
In Eau Claire, I learned about the collaboration between UW-Eau Claire and Mayo Clinic. This project is aimed at producing more rural health care workers so preventive health care – both physical and behavioral – is accessible to communities in western and northwestern Wisconsin. I also met with the leaders of a consortium of school districts, plus both Chippewa Valley and Northwood tech colleges, who are creating a pipeline of students who have the advanced manufacturing skills that local businesses like Processed Metal Innovators and Advanced Laser, both participants in the grant, say they need most, by creating mobile labs that will go directly to rural school districts to teach those skills.
And in Madison, I learned about a two important workforce projects – one bringing emerging adults into the construction and conservation trades and another focusing on providing student parents with child care while simultaneously training new child care providers.
At each of these projects, I’ve heard from community and business leaders that they understand workforce is more than just getting workers through the company door – it’s about making sure that employees have what they need to be successful, which includes things like housing, child care, access to medical care, good schools and training opportunities, and more. The remarkable thing about these projects is how all these different groups in the community have come together, agreed that change needs to happen, and focused their efforts on accomplishing it. If you are looking for inspiration, I invite you to join me in visiting these projects.
And while these other efforts are all afoot, at WEDC we continue to focus on our traditional economic development efforts, such as the expansion of enterprise zones to create a Global Center of Excellence for HPE in Chippewa Falls, or to support a $350 million expansion at Exact Sciences, which will create 1,300 high-paying jobs. Once again, though, our focus is on supporting businesses in every corner of the state, so we worked with Henry Repeating Arms to expand its current operations from Rice Lake to Ladysmith – and create 100 new jobs in the process.
As we seem to be on the cusp of full recovery, with the pandemic loosening its grip, I want to acknowledge where we are not – we are not in the depths of a recession, we are not facing major layoffs. These are places we certainly could have contemplated a year ago when I last spoke with you, especially given the surprising and difficult sweep of Omicron. And while we can be thankful we are not where we could have been, there are still challenges ahead. Not the least of these is the challenge of our businesses when it comes to workforce.
Many have looked to WEDC for assistance in recruiting new workers to Wisconsin. “If only we could get people to move here…” or “We just need to tell our story…” are phrases we often hear as solutions for our workforce shortages.
Of course, we all know it is much more complicated than that, and that is why at WEDC we are taking a multi-pronged approach to talent retention and attraction. First, the Workforce Innovation Grants will provide solid, replicable solutions to how we get Wisconsinites – high school graduates, tech college students, UW students, parents with children, veterans, previously incarcerated individuals and disabled into the workforce more fully and strongly than ever.
The Workforce Innovation Grants address employers’ real needs in the community because they recognize that people in crisis are not strong employees. People with obstacles in their everyday life – lack of food security, lack of housing, lack of transportation are not sustainable in the workforce. What we hear from businesses again and again is the request for assistance in helping Wisconsinites with their core needs and the businesses can provide the rest.
WEDC is also taking the Wisconsin story to the rest of the world. We have launched a national media campaign so audiences outside our state will be hearing stories of success from some of our most exciting business and community leaders. As part of this effort, WEDC is creating a toolkit for our partners around the state to guarantee we are all singing Wisconsin’s praises with one voice.
We want to make sure we take care to tell all of Wisconsin’s story, especially our rural and tribal communities. I am pleased to share with you that the Office of Rural Prosperity has launched the ruralwi.com website, which we’ve described as rural Wisconsin’s front porch, bringing together information about rural development and enabling residents to share ideas and develop best-practices to grow their communities.
With the committee’s permission, I would like to close my testimony with a video the Office of Rural Prosperity recently completed for the ruralwi.com website. It shows the Wisconsin we all know and love – creative, diverse, pulling together, and working hard.