RIVER FALLS – The head of Wisconsin’s biggest business group gave his thoughts on the state of the economy and elections unfolding in Wisconsin at a River Falls Area Chamber of Commerce Business Breakfast held Sept. 15 at the St. Croix Valley Business Innovation Center.

It was the first time the informative event was held since the COVID pandemic, and chamber Executive Director Russ Korpela said the chamber is working hard for the community with a full slate of programs and events. He credited the work of chamber stau, Emily Ko vach-Erickson, the event and program manager, and Alexandra Pashina, marketing and communication special- ist, for their euorts in helping get chamber operations back to “normal.”

“The chamber team has been together for almost a year-and-a-half; I want to recognize the work they are doing. It’s wonderful to have gone through one full cycle of events together, and that stability has been very fruitful for us at the chamber,” Korpela said.

The event was sponsored by Royal Credit Union. Joe Fischer of RCU is also board chair of the St. Croix Valley Innovation Center.

“I want to thank you for being in attendance this morning,” he said. “This is a fabulous facility.”

Shari Marnell, director of the SCVBIC, said the facility’s lower level is 96 percent full, and the 7,300-squarefoot upper level is ready to be converted into business space.

Kurt Bauer took the podium and gave an insightful view of the Wisconsin fall elections and also a glimpse into the work Wisconsin Manufacturers and Commerce does to support its 3,800 business members statewide. Bauer is CEO of the Madison-based organization.

“We’re not exactly the most popular group in Madison,” he admitted. “In fact, our building was firebombed during one of the riots during the summer of 2020. Fortunately, we installed bullet resistant glass in the inner vestibule. That saved the building from going up in flames." He said the organization works with businesses of all sizes.

“Most people associate us with big businesses, but actually, we represent more small businesses because that’s what business in Wisconsin looks like,” Bauer said.

Bauer said 20 percent of the state gross domestic product is manufacturing.

On the economy, Bauer said, “I do have some disclaimers. I am a pessimist. The reason why I say I’m a pessimist is that when you’re a pessimist, you’re usually right. When you’re wrong, you’re happy about it.”

Bauer said that the coun- try has hit the technical defi nition of a recession. He said he was told at a meeting of a group of economists that WMC hosts quarterly that there are six benchmarks to determine whether the country is in a recession.

“We haven’t triggered all of them yet,” he said. “The one that really separates us is that we’re basically at full employment.”

He said a survey of the WMC membership showed pessimism in the economy.

“I would say that even if they didn’t think we were in a recession, 70 percent of them thought we’d see a recession within the next six months,” Bauer said. “We’re kind of in that zone right now.”

He said Wisconsin’s broad manufacturing base helps the state stability.

“It’s not just manufacturing. It’s that supply chain that supports it. For every one job in a factory, you have about four jobs in the supporting industries: banking, transportation, energy, healthcare, hospitality, etc. that support it. It has that multiplier effect,” said Bauer.

He said there are signs of a “white collar recession,” with layous in the banking industry as interest rates rise.

The biggest challenge Wisconsin manufacturers see is workforce shortages.

“We still have members telling us they can't find workers,” he said.

He gave credit to the state technical college and university system for readying the workforce.

The biggest problem perhaps is that family size is decreasing, which means without a lot of people moving into the state, the workforce eventually shrinks.

“It’s a math problem. It takes 19 years to make an 18-year-old, and we weren’t making enough 18-yearolds, so of course you’re going to have a problem,” he said. “This has all translated into a real challenge for us, and it remains the biggest challenge that we have in the state. We just don’t have enough workers.”

The state also needs help in the area of childcare.

“We have a lot of childcare deserts. We lost about 30 percent of childcare slots during the pandemic. Access is a big challenge. Auord ability is a challenge. I think it’s one of the things that’s going to slap us in the face if we don't find a way to deal with it,” he said.

Turning to politics, Bauer said, “My guess is that there’s a lot of political fatigue with all the ads. It’s going to be a slog through November with all the spending in Wisconsin, considering that we’ve got a very consequential gubernatorial race. We also have a U.S. Senate race, of course, that will maybe shift control of the U.S. Senate from Democrats to Republicans.”

In the question and answer period, he predicted, “Wisconsin residents are going to be up late on election night.”

He said WMC polling shows what other polls indicate, which is that the governor and U.S. Senate races are a toss-up.

Crime has become a central issue in the state.

“Crime in Wisconsin has gone up dramatically. It’s particularly bad in Milwaukee. Milwaukee has a higher murder rate than Chicago per capita right now. It’s the fourth-highest in the United States,” Bauer said. “But it’s not just Milwaukee. It’s everywhere. To the extent that voters blame Gov. Evers, (Republican candidate) Tim Michels will benefit from that. If you’re Evers, you’re going to want to talk about abortion, and he’s got ads hitting on abortion.”