State Rep. Gordon Hintz
Op Ed

Where Will Foxconn Find Workers?

State’s working age population in decline. Will Foxconn pay enough so workers move here?

By - Aug 16th, 2017 10:08 am
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Foxconn Jet. Photo by Jeramey Jannene.

Foxconn Jet. Photo by Jeramey Jannene.

The shiny object in front of lawmakers’ eyes when talking about the Foxconn proposal is the potential of new jobs. “13,000 direct jobs! Another 22,000 indirect jobs!”

All of these claims ignore the reality in 2017 Wisconsin faces. If the jobs do materialize, where will the workers come from?

The important statistic when considering the availability of labor is the “prime working age” population, which economists classify as people between 25 and 54 years old. Wisconsin had 105,000 fewer prime working age people in 2015 than it did in 2010. Some of the sharpest decreases occurred in Jefferson, Kenosha, Ozaukee, Racine, Walworth, Washington and Waukesha counties. As the state with the 15th oldest population in the U.S., Wisconsin’s prime working age population is expected to continue to shrink through 2040 to just 33% of its total population. This is down from 41% in 2010.

Looking at 2016 census estimates for Racine and Kenosha counties, Racine lost 6,709 (8.3%) of its prime working age population in just the past 6 years. Kenosha lost 2,998 (4.3%) since 2010. So the very region being counted on to fill as many as 35,000 jobs has a smaller number of working aged people, and that number is continuing to decrease.

Wisconsin’s current and future demographic challenge is not new, but considerations for how the state will address this challenge and manage the consequences do not seem to be at the forefront of the Governor’s current decision-making.

In addition to the lost workforce due to the retirements of baby boomers, more than 27,000 people left Wisconsin between 2010 and 2014, according to a study from the Wisconsin Taxpayers Alliance (WISTAX). According to Todd Berry, WISTAX president, Wisconsin lost people “at a faster rate than we should, and this means not only are we not going to grow the workforce, we’re going to see a shrinking workforce if we keep that up.”

If you build it, will they come?

Wisconsin is not alone in facing a labor shortage. Both Illinois and Michigan face shrinking working age populations, while Minnesota and Iowa expect small increases through 2040. Nationwide, there are more than 1 million unfilled manufacturing jobs and there is high demand for skilled labor.

Workers choose where they want to work. Advocates for Foxconn have referenced both Silicon Valley and North Dakota’s oil boom as examples for Wisconsin’s hopes. However, Silicon Valley succeeded primarily because of the open immigration policies of the U.S. and the importance the world’s best and brightest immigrants have played in the tech business. Wisconsin share of foreign-born Wisconsin residents stood at 4.8% in 2015, well below the U.S. percentage of 13.5% for the same year. And the average wage during the oil boom in 2012 in North Dakota for oil field workers was $112,462, while entry level rig workers averaged about $66,000 a year, according to Rigzone, an industry information provider and job website.

It remains unclear what the actual job range will be or what the specific pay for those jobs at Foxconn will be beyond the unverified average annual pay of $53,000. With a significant labor shortage in Wisconsin and neighboring states, will that level of compensation be enough to recruit as many as 13,000 people (not to mention 22,000 more) from around the U.S. to move to southeastern Wisconsin as our existing working age resident population declines? It seems unlikely. The need to increase compensation will drive up labor costs and result in a larger and faster push to automate the Foxconn plant. The result? Far fewer jobs, and a much higher cost to the taxpayer. Lawmakers should not let the shine blind this reality.

Rep. Gordon Hintz (D-Oshkosh) represents the 54th District in the Wisconsin State Assembly and is a member of the Legislature’s budget-writing Joint Committee on Finance.

More about the Foxconn Facility

Categories: Business, Op-Ed, Politics

10 thoughts on “Op Ed: Where Will Foxconn Find Workers?”

  1. Jason Troll says:

    Where does North Western Mutual find workers? Gordon Hintz, is it really your job to worry about that. Private companies find workers. You would think you would be happy that Wisconsinites can find a plentiful amount of jobs to choose from. We should be encouraging rural and urban folks that are down on there luck to attempted to be hired at Foxconn instead of doling out food stamps.

  2. Vincent Hanna says:

    This is a real issue Troll (and NML isn’t an apples to apples comparison at all and you know it). Manufacturing workers are quitting their jobs at the highest rate in a decade. You should try you know reading a little before you spout off.

    Trump tried to save their jobs. These workers are quitting anyway. https://www.washingtonpost.com/business/economy/trump-tried-to-save-their-jobs-these-workers-are-quitting-anyway/2017/08/15/6a555f2a-7d50-11e7-a669-b400c5c7e1cc_story.html?utm_term=.d93cef611b0e

  3. Jason Troll says:

    Vince, for a quarter of a century the State of Wisconsin has been losing population compared to other states and college graduates. Investing in Foxconn will draw workers from all over the world. There is nothing wrong with non Wisconsinites coming in and buying houses and condos in southeastern Wisconsin. Foxconn will be a financial nuclear bomb that will put the whole midwest on economic steroids.

  4. Vincent Hanna says:

    People are not going to move from all over the world to Wisconsin because of $20 an hour wages Troll. You are delusional if you believe that. Walker and the legislature aren’t even making that claim. It’s laughable.

  5. Dave Reid says:

    @Vincent The tax credits kick in at $30k so heck many of the jobs will be closer to $15 an hour, not even $20.

  6. Vincent Hanna says:

    Exactly. No one moves across the state, much less the country, for $15 an hour. Troll is smoking something funny.

  7. AG says:

    I know of a large city that has a very high percentage of the population that is not employed. Manufacturing jobs would be a wonderful place for them to join/rejoin the workforce. Let’s get some MATC/WCTC/Gateway programs rollin’!

  8. Ron says:

    I hate to sound a wake-up call, but this Foxconn construction will never take place. This is much ado about nothing. The current business climate is scrambling to show they are cooperating with Trump’s initiative to avoid tariff penalties. The pressure started with Apple, who as we all know does most of their manufacturing overseas without a conscience. In turn, Apple has pressed those manufacturers like Foxconn, to make an effort to bring manufacturing to the US. Foxconn is not only notorious for human rights violations, including the factory living quarters with installed safety nets to keep workers from jumping to their deaths, but they are also well known for not following through with these promised investments. The corporations involved are all banking on avoiding tariffs in the short term, and waiting until Trump is out of office to let people know they are pulling out of the deal. Meanwhile, Walker loves the illusion because it makes it look like his promises to bring industry to the state are finally coming to fruition. He has tremendous motivation to make it all look real. If you look closely at the deal, there is no way it would ever come to be reality. Finding workers is just one of the myriad of issues connected with this project. I know we are all hungry for even more jobs, and would like to call ourselves the new Silicon Valley, but someone needs to just say the emperor has no clothes!

  9. Tom says:

    College graduates are fleeing Walker’s Wisconsin. I regularly speak to hundreds of students who are in their junior and senior years in colleges across Wisconsin. These students, mostly education majors, attend my presentations to learn of the drastic differences that they will face upon graduation if they choose to pursue their teaching careers in Walker’s Wisconsin instead of going to a state where teachers and educated people in general have not been demonized. I show them the facts of how teaching is no longer a career in Walker’s Wisconsin but rather the ticket to a low paying, dead-end job. I encourage them to spend no more than five years teaching in Walker’s Wisconsin before fleeing to another state, (Minnesota is a great choice) where they can still earn middle class wages and raise a family on a teacher’s salary.

    The feedback I receive from my presentations indicates that many of the attendees at my seminars are not education majors, but also future engineers, nurses, and scientists. These young people also recognize that they have no future in the state that Walker’s Wisconsin has become. No wonder that so many Minnesota companies have such success in recruiting new talent from Wisconsin colleges. The Fox-Con deal will change little in keeping our talented young people here, or recruiting younger workers into Wisconsin. Talented young people have a lot of great choices in America on where to live. They don’t want to live in a state that has crashed the middle class and destroyed the public schools that their future children will attend.

  10. anon says:

    When it becomes clear that Foxconn will need large quantities of water from Lake Michigan to allow for their manufacturing process, a reflexive lawsuit is almost certain. Such a practice would fall outside of legal boundaries.

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