Walker Approach To Jobs Growth Failing?
National story for Reuters contrasts Wisconsin's Douglas County with next door Minnesota county, which is doing much better.
The fact that Wisconsin is gaining jobs at a slower pace than the nation is by now well-documented. As a story last week by Reuters noted, “Private-sector employment grew by 6.4 percent in Wisconsin between January 2011 and March 2015, lagging the national pace of 10.7 percent, according to the U.S. Bureau of Labor Statistics.”
But Reuters reporter Andy Sullivan decided to go beyond the statistics and take an up-close look at just one part of the state, the city of Superior, in Douglas County, at the Northwest edge of the state, right across the border from its twin city of Duluth, Minnesota. The good news: “Walker has cut state taxes by $2 billion as his state has climbed out of recession. Unemployment in Superior now stands at 4.6 percent, down nearly by half since Walker took office. New businesses are opening downtown and the waterfront docks are humming.”
The bad news: “Ask local officials and business leaders, and they will say Walker’s policies have little to do with a turnaround that has moved in tandem with the national recovery,” Sullivan reports. “Tax cuts haven’t lured many businesses across the bridge from Duluth, Minnesota, they say, while the loss in revenue has prompted steep spending cuts to education, harbor maintenance and road construction…’We should put the $2 billion in roads or education,” said Superior Mayor Bruce Hagen, a self-described conservative.’”
Sullivan continues: “Walker has made no secret of his desire to lure businesses across the border from Minnesota, where Democratic Governor Mark Dayton has hiked taxes. Superior should be poised to benefit: the city of 27,000 has access to the same freeways and port facilities as Duluth, without the steep hills that make construction more expensive on the Minnesota side.
“The tax difference between the two cities is dramatic. Manufacturers will see their corporate tax rate drop to 0.4 percent in Wisconsin in coming years, compared to 9.8 percent in Minnesota. Wisconsin firms also pay less in unemployment insurance, workers’ compensation and sales tax, according to a comparison circulated by Walker’s economic-development agency.
Dayton was first elected governor in 2010, the same time as Walker and has pursued the opposite course, as I’ve written: “While Walker lowered income taxes, delivering 60 percent of the tax cut to those making more than $100,000 a year, Dayton and the Minnesota legislature raised taxes by $2.1 billion,” targeting the top 1 percent of earners to pay 62 percent of the new taxes, almost the exact reverse of what Walker did.
Dayton invested 71 percent of the new revenue in funding for K-12 schools and higher education as well as all-day kindergarten and pre-school education. Walker’s budget included the seventh-sharpest decline in education funding in the nation. And Walker’s approach has left the state trailing Minnesota badly in job growth.
In fact, as Urban Milwaukee’s Data Wonk columnist Bruce Thompson has found, there is little evidence that the recommended conservative approach of cutting state taxes and spending promotes job growth. The comparison between Wisconsin and Minnesota is but one example of how the facts on the ground undercut the theories of Walker and conservative think tanks like the Wisconsin Policy Research Institute and the Cato Institute. Yet Republican presidential aspirant Walker will continue to tout this as the way he helped Wisconsin reduce its unemployment rate, while downplaying the fact that other states, including Minnesota, have done far better at promoting job growth.
In a related story, an analysis by the Wisconsin Center for Investigative Journalism found that the state’s jobs agency, the Wisconsin Economic Development Agency, is spending little money in northern counties like Douglas County and has generated very few jobs.