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Scott Walker's Lagging Indicators

Christopher Flavelle writes editorials on health care, energy and environment for Bloomberg View. He was a senior policy analyst for Bloomberg Government and chief speechwriter for the leader of the Liberal Party of Canada.
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At the close of 2010, a year and a half after the recession officially ended, Wisconsin could claim one of the better economic recoveries in the country. Employment had grown at a faster clip than in most states, and the value of Wisconsin's publicly traded companies was up almost 40 percent. Tax revenue, a sign of economic health, had risen more than 50 percent.

Then Scott Walker became governor. Over the four years that followed, Wisconsin's economic performance ranked 35th in the country, according to the Bloomberg Economic Evaluation of States, which tracks the change in a series of economic indicators. The state has lagged Michigan (3rd place), Illinois (14th), Iowa (18th) and Minnesota (19th).

Walker's entry into the top tier of Republican presidential candidates means how well Wisconsin stacks up against its neighbors is more than just an extension of the Badgers-Gophers rivalry. It raises questions about whether he can plausibly claim to offer better economic growth nationwide than he achieved in his own state.

Considering the recent attention to wage growth, that seems like a good place to start examining Walker's record. Since he became governor, average household income in Wisconsin has grown 12.4 percent. That's better than its neighbors, but still half a percentage point less than the median state:

Wisconsin's private-sector job growth has also been lackluster -- a 5.6 percent increase since 2011, smack in the middle of the states but trailing Minnesota (6.8 percent), Michigan (6.7 percent) and Iowa (5.7 percent). Meanwhile, home prices have increased just 1.8 percent, compared with an increase of 6.7 percent for the median state. 

Things weren't much better for the state's corporations. Bloomberg compiles a weighted index of the stock prices for publicly traded companies in each state. The value of shares for Wisconsin companies increased less than those of neighboring states, and less than the median state, from when Walker took office to the close of trading on Monday:

On top of all that, state tax revenue increased just 4 percent between the first quarter of 2011 and the third quarter of last year, compared with a 20 percent increase for the median state. So the news this month that Wisconsin was skipping a scheduled $108 million debt payment, owing to an unexpected budget shortfall, only underlined a trend that's been years in the making. Of the 40 states with general-obligation bonds, 25 have credit ratings from Moody's that are better than Wisconsin's

Maybe the most interesting thing about Walker's economic record is the absence of any noticeable impact on his as-yet-unannounced presidential campaign.  That suggests that party leaders are more interested in Walker's actions than their consequences. Walker has built his profile by going after big conservative targets -- collective bargaining for public-sector unions, school spending, university professors.

Those fights are interesting, but they don't reveal much about Walker's ability to improve the living standards of the people he represents. The data does, and it shows that measured by relative economic outcomes, Walker's tenure falls somewhere between lackluster and a failure. The next few months will reveal whether that matters to his 2016 presidential aspirations.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Christopher Flavelle at cflavelle@bloomberg.net

To contact the editor on this story:
Stacey Shick at sshick@bloomberg.net