Bruce Murphy
Murphy’s Law

Newest Deal Shows Foxconn Flaws

Walker spends 11 times more per job on Foxconn than Haribo candy company?

By - Aug 29th, 2017 12:05 pm
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HARIBO gummy bears. Photo by Thomas Rosenau (Own work) [CC BY-SA 2.5 (http://creativecommons.org/licenses/by-sa/2.5)], via Wikimedia Commons

HARIBO gummy bears. Photo by Thomas Rosenau (Own work) [CC BY-SA 2.5 (http://creativecommons.org/licenses/by-sa/2.5)], via Wikimedia Commons

I’m skeptical of government subsidies to companies. I agree with conservatives that government shouldn’t pick winners and losers, and agree with liberals that corporate welfare is generally a bad idea. But theories are one thing and the reality for governors is that they can get blamed when a company picks some state over ours. In which case it helps to have some metrics by which you decide when and how to award subsidies when pressured to do so.

Take the subsidy to Mercury Marine awarded by Gov. Jim Doyle in 2009, when the company threatened to move its manufacturing plant in Fond du Lac to a plant in Stillwater, Oklahoma if it didn’t get wage concessions from workers. The union did make concessions and the state agreed to award the company $70 million in state tax credits if it kept its nearly 2,000 jobs in Wisconsin.

The Doyle administration typically gave tax credits of up to 7 percent of payroll, with the idea that the state would be repaid over a period of 10 to 15 years from income taxes paid by workers. In the case of Mercury Marine, the company later spent $20 million to expand the Fond du Lac plant (in 2012) and has increased the work force there to 3,200, after closing the plant in Stillwater.

Still, the initial employment saved came at a cost of $35,000 per job, which seems pretty pricey. Doyle’s later deal with Harley Davidson — $25 million to prevent 1,000 jobs from being moved out of state — cost $25,000 per job. Other companies that got subsidies included Republic Airways, Oshkosh Corp. and Uline, Inc.

When Republican Scott Walker became governor, he soon announced he would replace the Department of Commerce with a public-private partnership called the Wisconsin Economic Development Corporation. The WEDC has been an unmitigated disaster that has generated more negative headlines than anything else Walker has done. As for what the metrics were for WEDC, that was never clear.

A May 2017 Legislative Audit Bureau report found that of hundreds of millions in tax credits, grants and loans authorized since 2011, the agency “cannot be certain about the number of jobs actually created or retained as a result of any awards.” In fact only 12.5 percent of the awards “even had an expected result of job creation or retention.”

But the Walker Administration’s recently proposed subsidy for the Haribo candy company at least has some specific metrics that constrain the deal. Haribo, the German manufacturer of gummy bears, chose Pleasant Prairie in Kenosha County as the site of its first North American plant. The Walker administration is offering up to $21 million in refundable tax credits if the company invests $220 million in the plant and maintains the full-time jobs it creates through 2028, as Rick Romell of the Milwaukee Journal Sentinel has reported.

“Haribo expects to employ 385 people at a new, 500,000-square-foot factory in Kenosha County,” Romell reports. “The contract with WEDC calls for the company to hire 50 full-time employees by the end of 2019 and add 50 to 80 a year through 2024” until it reaches 385 employees. To get the full subsidy, it must meet those requirements, according to Mark Maley of the Wisconsin Economic Development Corporation.

That’s a cost of $54,545 per job, a lot pricier than the Harley and Mercury Marine deals.

But still a great deal compared to that for Foxconn, which will give a $3 billion subsidy for 13,000 jobs, or $230,000 per job. That’s 4.2 times more subsidy per job than the Haribo deal.

But the Haribo deal is based on the number of jobs the company creates. The Foxconn deal gives the company a 15 percent tax credit on all capital expenditures it makes for seven years, up to a total of $1.35 billion, even if that money is being spent to add robotics and reduce employment. The company says it will start with 3,000 jobs and grow that to 13,000, but there is no requirement this happen and no penalty if it doesn’t. If just 3,000 jobs are created, the company will collect $1.35 billion plus $345 million in a payroll tax credit and $139 million in promised sales tax exemptions, for a cost to taxpayers of $611,000 per job, or 11 times more per job than the Haribo deal.

What possible justification is there for spending so much more on just one company? The Foxconn subsidy is 35 times bigger than the largest state subsidy ever awarded. The $3 billion amounts to a contribution of $585 per person for every adult in the state.

The only policy rationale for such an off-the-charts subsidy is that Foxconn will transform southeastern Wisconsin into a mini-Silicon Valley that leads the way in creating the next generation of flat panel screens. But Foxconn has already made the decision to create such a factory complex elsewhere — in Guangzhou, China.

Foxconn has already broken ground on this huge plant, which is expected to be operational by 2019, according to an eye-opening story by Journal Sentinel reporter John Schmid, whose long suit is international economics. Foxconn CEO Terry Gou envisions the plant as the company’s strategic base: “The industrial campus will be the world’s most advanced and largest of its kind, the company says. Its engineers and designers ‘will develop innovative display screens, smart TV’s, electronic whiteboards and other cutting edge display products,’” Schmid reports.

And the assembly employees there are likely to earn the equivalent of $8,000 a year, one-seventh of the average pay Foxconn claims its Wisconsin workers will earn, and about one-fourth the likely starting salary, which is $30,000, the lowest it can pay and still get a state payroll credit. In short it makes no economic sense to do any production in Wisconsin.

So why bother with this state? “Gou’s overriding motivation in considering Wisconsin is to avert and avoid protective U.S. trade tariffs and import restrictions, according to a consensus of Asian analysts contacted by the Journal Sentinel,” Schmid writes. “That would keep open the torrent of Foxconn’s other electronic imports into the country”

In short, Foxconn will do the minimum production necessary in Wisconsin to keep the Trump administration from slapping tariffs on its exports to the U.S. And given the opposition of many Republicans in Congress to creating a trade war, it’s likely there will never be such tariffs and the Wisconsin plant will never be needed.

For state taxpayers, that would be the best news. The worst would be that Foxconn creates a plant with as few employees as possible, while collecting as much of Walker’s massive subsidy as it can.

Economists often talk about “opportunity costs”: what possible projects are you losing which you could spend state dollars on that might present greater opportunities. The Haribo deal is a classic example. As pricey as it is, seven more such deals would create more than the minimum 3,000 jobs promised by Foxconn, at a cost of $168 million, not a couple billion.

Research has repeatedly proven that smaller companies create most new jobs in America, which is why some states emphasize aid to start-up companies. Imagine having a $3 billion fund to help back the most promising start-up companies in bio-tech, alternative energy and other growing industries. Foxconn will likely use up all possible state economic development money for an entire generation, until the 2040s or later, all to create a backstop for Terry Gou in case a trade war occurs. Good for him, terrible for Wisconsin.

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75 thoughts on “Murphy’s Law: Newest Deal Shows Foxconn Flaws”

  1. Rich says:

    Scott Walker isn’t even smart enough to know he’s being played….Too blinded by the campaign slogans he can get from this whether or not it actually happens, he gets 2018, they cancel plans in 2019, etc. He needs four more years to finish destroying the state — next up, eliminating professional licensing and the consumer protections inherent within — before spring boarding to somewhere else and this is perfect opportunity. Voters who fail to forecast will also be blinded by the “jobs jobs jobs” mantra.

  2. Rich, I disagree. Walker knows exactly what he’s doing. The WEDC was never about jobs; it is a secretive means for funneling taxpayer money into GOP campaigns and into its dark-money PACs. Gou gets $3 billion out of taxpayer pockets. He kicks back an agreed-upon percentage. It’s a form of political money laundering, and Walker and the GOP couldn’t care less about the negative impact on the State of Wisconsin.

  3. Adam says:

    @Thomas S.
    Bingo!! This deal has had quid pro quo written all over it from the start.

  4. Tom D says:

    It’s comical that Walker claims Wisconsin couldn’t afford $7 million/year for the Chicago-Milwaukee-Madison train (which, over its first 20 years, would average over 800 jobs, mostly during construction).

    Even if you just treated the train extension as a job program (ignoring the benefits of the trains themselves, and ignoring how the trains could reduce the need for highway expansion), each train job would have cost the State under $150,000 (vs $611,000 for Foxconn)

  5. Bruce Hall says:

    Both liberal and conservative economists agree that special incentives to bring in companies to a state are generally without merit.

    Liberal:
    http://econbrowser.com/archives/2017/08/guest-contribution-why-tax-breaks-for-iffy-jobs-are-bad-economic-development

    Conservative:
    http://www.aei.org/publication/a-waste-of-70-billion-a-year-states-please-stop-it-with-the-tax-incentives-to-attract-businesses/
    http://www.michigancapitolconfidential.com/favored-businesses-getting-taxdollars

    It appears that it doesn’t matter which party is in power. Both Republican and Democratic governors love to brag about how many jobs they are bringing into a state.

    “Michigan has set aside the $860 million to pay subsidies the state agreed to mostly when former (Democratic Party) Gov. Jennifer Granholm was in office. In fact, $638 million of the total $860 million are from Granholm-era deals, largely in the form of select tax incentives.”

    The only clear winners are the corporations who pit one state against another until they obtain the sweetest deals. Of course, the politicians usually get some votes from this process, as well.

  6. Let’s not forget Republicans what to get rid of all corporate taxes.

  7. Jerry says:

    The question that my legislators refuse to answer yet support the bill is where on earth are we going to come up with an additional $250-$300 million annually for 15 straight years? They say that the money will come out of the general fund. If that is so then we are going to have significant cuts in existing programs. We will hear the 2010 refrain…..”The state is broke…..we must cut schools, the U W, the DNR and other services that serve Wisconsin’s citizens.”

  8. “…public-private partnership called the Wisconsin Economic Development Corporation…” So where does the private part come in? How much private investment does WEDC get?

    “…refundable tax credits…” at the current and proposed future corporate tax rates of near zero…shouldn’t these be labeled subsidies instead of tax credits (as Bruce has done for the Foxconn largesse)?

    “… transform southeastern Wisconsin into a mini-Silicon Valley…” well Silicon Valley invents stuff and develops stuff and births new businesses…we are just talking about a manufacturing plant at this point (and its auxiliary suppliers).

  9. Jake formerly of the LP says:

    Jerry- You’ve hit the biggest problem with this giveaway. We already have a $1 billion structural deficit before we even account for the Fox-con. It seems to be one last money-grab for Walker, his cronies (hi, Keith Gilkes!), and kickbacks to his business donors. Then the bill comes due in the next 2 years, after the election, and screws everyone else that isn’t in on the Fox-con.

    And the fact that the WEDC slush fund is a part of these incentives for both Foxconn and Haribo is another major red flag, especially since WisGOP has already cut taxes for manufacturers nearly to zero, which means these guys will be getting bags of cash taken directly from the taxes we pay to the state. That’s not sketchy at all, no….

  10. tim haering says:

    Bruce, you forgot to use dynamic scoring. I don’t know why Walker didn’t take that $3B and buy Powerball tickets last week. Hope is a mighty hallucinogenic. WI will forever think more of itself than our miserable climate merits. Our best chance is in Kohler, where we could become the Disney World of golf, had we more than 5 months of golf weather. BUt you know, the Foxconn really isn’t that different from the liberal folk who want to throw money at education.

  11. Thomas says:

    Walker would squirm more than a mark at a meeting with Trump if he had the stones to try to address Murphy’s analysis of the Foxcon deal point by point. The # 10 post’s red hearing about liberals throwing money at education is hilarious in this context. I spent much of my career in education, and I never saw money thrown at it. If the Foxcon deal goes down as it is being presented, we will see millions of dollars flying in the sky above us – those millions being the scattered missed money from the billions that Walker’s cronies fail to grasp in their excitement over this promiscuous giveaway.

  12. Max says:

    Clearly, someone is planning yet another presidential run, someone who failed miserably last time around, and is seriously fishing for big donor kickbacks, with the bait being your and my tax dollars.

  13. Eileen says:

    Corporate welfare at its most ludicrous! Spending more on a foreign firm than on the entire UW System. Up to now, WEDC has been nothing but a multi-million dollar piggy bank for Walker donors and slick, carpet-bagging New Yorkers. Now it’s funding wealthy foreigners. Consequently, our extortive property taxes will rise even higher and schools will suffer. Charity begins at home, where the money is hard-earned.

  14. AG says:

    For those worrying about how to pay for 250-300 million per year… remember that, at least using preliminary reports, the worst you have to fear is coming up with just under $200 million for a 4 year period. This is because the net taxes on construction jobs and wages for the first several years will outweigh the costs and then after the initial capital expenditures are made the state tax income will nearly equal or be greater than the state’s costs.

    Meanwhile, during the first few years, Foxconn will be bringing $2.4 billion dollars of salaries and benefits to Wisconsin construction workers and the state economy. Not to mention they will bring in potentially $700 million in pay and benefits to their Wisconsin workers every year.

    This doesn’t take into account the savings of entitlement programs for anyone who is moving from a lower paying job to the higher paying Foxconn jobs (that start around $42k a year as reported in the Journal Sentinel but for some reason not on UrbanMilwaukee?).

    On top of that, you have over a billion dollars in indirect payroll and benefits being added to the state.

    Plus we haven’t even considered all the development that is going to take place, which will increase property values.

    Lest we forget, the competition for workers will also likely increase wages at other companies. This will only have a positive effect on state taxes, the economy, and workers (at both the lowest levels and highly skilled positions).

    If this is built in Racine County, it will be surrounded by three counties in Wisconsin with some of the highest poverty rates in the state (Milwaukee, Kenosha, and Walworth). If we need to invest anywhere for jobs, this is it! And this isn’t just $10/hr amazon jobs, these are $42,000+ jobs minimum!

    I realize that this is a LOT of government assistance and brings considerable risk. However, the benefits if this is fully realized are transformative for this part of the state and for people who need this the most. It can also usher in an educational change and a workforce that is going to be highly prized in the future as more and more manufacturing becomes automated. I’d personally rather spend $15k per job for 4 years (and a few thousand for some years before/after that) to get people working and improve their wages than to spend thousands of dollars supporting unemployed and underemployed people who can’t find good work.

  15. Dave Reid says:

    AG The $42k minimum is not in the bill. Neither is the $53k average that was tossed around. But if you look in the bill you will see the tax credits kick in at $30k in Tier II counties and well $22,620 in Tier I counties (7.25*1.5*2080).
    https://docs.legis.wisconsin.gov/2017/related/proposals/au7_ab1

  16. Max says:

    AG … you wrote “I realize that this is a LOT of government assistance and brings considerable risk” but ignored the risks altogether by engaging in nothing but wishful thinking, talking points, and layered it with figures that are emphereral at best. Do you also believe in the Tooth Fairy? Read the article again and compare the deal Foxconn got with the one HARIBO got. Now ask yourself, why did Wisconsin taxpayers get a concrete deal with HARIBO with measurables, and got nothing but a bunch of suspect promises from Foxconn?

  17. Adam says:

    @ Dave Reid
    So we literally would be subsidizing the creation of minimum wage jobs in Tier 1 counties?

  18. AG says:

    Dave, I recognize it is not in the bill. (and neither of the counties in question are Tier I so there is no point in bringing in the 22k minimum) However, there’s a lot being reported that is not in the bill. It seems Urban Milwaukee is mainly choosing to report on negative conjecture and rumors and few of the positives. I could have missed it, but has there been any mention of the starting wages being touted at $42k? Even if you hedge the reporting that it is not guaranteed… I’d still imagine that it is important enough to inform your readers of.

  19. AG says:

    See Dave, Adam’s comment proves my point… bringing in unrelated information only confuses your readers.

    Adam, no there can not be any jobs created at less than $30k per year if Foxconn wants to get a tax credit for that job because both locations they are looking at are in tier II counties.

  20. Dave Reid says:

    AG I know the $53k average was mentioned many times but not sure on the $42k starting, but the fact is that the tax credits kick in at $30k.

  21. AG says:

    Max, I’m not fully defending the deal, I’m just trying to provide some balance to the negative campaigning that Urban Milwaukee is doing. As I said, I see plenty of risk… but as of right now, I am erring on the side of supporting the legislation. I do also hope that in final negotiation they put solid restrictions/safeguards in place. But even if not, I’d probably still sway towards support rather than opposition because this is an industry creating project and not just a couple hundred basic unskilled manufacturing jobs.

  22. Vincent Hanna says:

    AG you claim to be providing balance but for weeks now all of your posts here have read like Walker press releases. They have only focused on the rosiest of predictions. You have been fully defending the deal, despite your most recent post.

  23. Max says:

    AG … you wrote that the Foxconn deal will create ” $42,000+ jobs minimum!”. Really?? At that rate, Foxconn would risk loosing a ton of money on each device made, unless they robotize the entire manufacturing process. That’s more than 10x what Foxconn pays human employees now. You believe Apple or any other companies that outsources manufacturing will say “OK Foxconn, charge signficantly more than you do now, we wouldn’t mind”? Unlikely, Apple and other are much more likely to go to others to supplement their supply chain.

  24. AG says:

    Max, if $42,000 was the starting wage and they did indeed plan on hiring thousands of people as purported, would you support the project then?

  25. Max says:

    AG, I support the flag, Mother’s Day, applie pie with Wisconson cheddar, and employment opportunities with family supporting wages for all. It’s difficult to see however, that Foxconn has a real pathway to the dreamy, wishful figures they’ve cast about and that Wisconsin government is buying hook line sinker. Btw, your repeated disparaging of Urban Milwaukee for actually reporting based on facts, your cheerleading tendencies, your feeble attempt to own all sides of the argument, your whataboutism (if this happens, then would you support) pegs you as a disinformation specialist. Care to divulge who you work for? Shucks, I can guess who.

  26. Thomas says:

    Enthusiasm for the Fox-con deal as proposed so far requires trust in Walker, Trump, and the CEO of Fox-con: a puppet, a con-man, and an unknown entity.

  27. AG says:

    Yes, Max. All the “facts” are reported that support their decided stance on the deal. The idea I need to work for someone in order to desire balanced reporting elicits a big eye roll from me… so good job if that’s what you were going for. I see plenty of items being reported out that are worst case scenario conjecture… just as I see blind proponents touting only the best case scenario. Yes, I included best case scenario’s above, only to show the counterpoints of what we could be looking at. I believe it should be Urban Milwaukee’s job to show both sides though… not mine.

    I will grant that at least I haven’t seen outright falsehoods or false information being pushed like I’ve heard on some liberal talk shows and coming from democrat politicians.

  28. Vincent Hanna says:

    Why does this story comparing two deals need to spend more time talking about the positive possibilities of the Foxconn deal? The entire premise of it is to compare/contrast Foxconn and Haribo. So any beef you have should be with the comparison itself.

    What liberal talk shows do you listen to that talk about Foxconn?

  29. Max says:

    AG … Urban Milwaukee routinely publishes the Governor’s press releases, isn’t that your “both sides”? Being able to read something from a local source that actually anlyzes the deal in a comparative fashion is a breath of fresh air, filling a void left by the only major newspaper in town which for some time now hasa strong tendency of balancing between Milquetoast and Servile Submissiveness.

  30. Aggie says:

    If you talk to any manufacturing company in WI right now, they will tell you that it is nearly impossible to find skilled employees for the many unfilled technical positions they currently have. This means that “if” Foxconn creates jobs at or above the living wage level, they will either be poaching employees from existing WI companies, making it harder for these companies to survive, or importing them from IL.

    When companies look at moving/relocating to an area, a trained and available work force is one of the most important resources on their list. Spending a fraction of the proposed money on real jobs/skills training, especially in the lower income areas in Milwaukee and surrounding rural communities would be a much greater benefit to WI as whole.

    Does WI really need to create a mega-business zone by offering hand-outs to international companies or do we just need to provide small manufacturing businesses with the well trained individuals that will allow them to prosper and grow?

  31. AG says:

    Sorry Max, UrbanMilwaukee has obviously taken a stance and is pushing their opinion in all these pieces. If you see these pieces as neutral analysis then I doubt I’ll be able to change your mind on that. For all my and other’s criticism of the JS, at least they’ve run a full spectrum of pro/neutral/con pieces.

  32. dk mke says:

    Some basic math here. Even if we accept the average of $42k starting, the MEDIAN wage will be considerably less. Meaning most people will be earning less that $42k. They need to keep wages low or automation will simply take over. This really is common sense, especially if you look at the company’s history. The simplest answer is usually the right one.

  33. Vincent Hanna says:

    It’s not like Bruce got the staff together and said “hey everyone we are adamantly opposed to the Foxconn deal and all stories about Foxconn will reflect that!” If you did Bruce Murphy go ahead and correct me. For starters they have published John Torinus stories that are positive and pro-Foxconn. And as others have suggested they are doing work the JS isn’t, digging into the weeds and covering it from all angles, like this piece does (the JS certainly didn’t do a compare/contrast to the Haribo deal). That is very valuable. And as Bruce and others have pointed out, JS coverage has been flawed. We’re fortunate to have UM complimenting their coverage.

  34. Bruce Murphy says:

    Actually, if you look at list of Foxconn stories and columns we’ve published above, its pretty endless and pretty varied. And while many are press releases, some of our press releases get very good readership. We do make a point of looking for op ads that disagree with some of our writers, as well. I keep thinking there’s nothing more that could be written on the subject, but there does seem to be a lot of interest.

  35. dk mke says:

    Vincent hit the nail on the head. The article is about the comparisons.

    All of the ancillary benefits that could come from Foxconn could just as easily come from Haribo, or previously from Mercury Marine or HD. The nuances of why one subsidy produces the championed results or doesn’t is full of too many variables, speculations, and YES, WORKING BACKWARDS from preconceived positions to know for sure. At some point, we have to take them all as having reasonably even odds of producing ancillary benefits.

    That said, the comparisons are incredibly valuable as presented. Take the info for what you will, but I don’t see how the comparisons are invalid.

  36. Wisconsin Conservative Dgiest says:

    What a bunch of spoil sports and Trump/Walker haters. FoxConn is an earth shaking capture the wjholel world notices.
    In my life it is one of the best really good things in business. Left brought us downers: KC leaving, Allis Charmer bankruptcy, now something positive and the Left wants to spend the money on welfare, food stamps, and bigger govt. salaries, bennies and more pork instead of good jobs.. SE Wisconsin will be the Tech center of the midwest. They will find plenty of employees that will come from all over Wis to get good jobs.

  37. Thomas says:

    WCD missed all points yet again. Lefties do not hate Trump or Walker. They pity them. The word liberal is derived from the Latin for generous. Liberals are not ashamed about the generosity of worker’s compensation, unemployment insurance, social security, medicare, Medicaid … That said, liberals aren’t fools. They resist providing charity to cons and charlatans. They question corporate welfare in instances when representatives of corporations appear to be bleeding the public for personal gain. The Foxconn deal looks like corporate welfare with potentially deep costs to the public.

    You are not necessarily a Trump or Walker hater if you question either of them on their promises of jobs. Neither have made good on promises of jobs.

  38. Bruce Hall says:

    Thomas, just to be fair, the U.S. unemployment rate since January is:
    2017 4.8 4.7 4.5 4.4 4.3 4.4 4.3 4.4 (the last number is still preliminary). That’s an 0.4-0.5pp improvement or about 10%.
    https://data.bls.gov/timeseries/LNS14000000?amp%253bdata_tool=XGtable&output_view=data&include_graphs=true

    Wisconsin’s unemployment rate since January has gone from 3.9% to 3.2% (preliminary) … 3.1% in June. That’s an 0.7-0.8pp improvement or about 20%.
    https://data.bls.gov/timeseries/LASST550000000000003?amp%253bdata_tool=XGtable&output_view=data&include_graphs=true

    It’s true that the absolute number of jobs promised by Walker did not materialize, but one can attribute that to typical political campaign rhetoric. The important point is that Wisconsin is a full-employment state with little chance to improve the unemployment rate unless there is inward migration.

    So, your comment…
    “You are not necessarily a Trump or Walker hater if you question either of them on their promises of jobs. Neither have made good on promises of jobs.”
    … probably is not the case. Jobs are not the issue. Liberals simply hate Trump and Walker regardless of the data.

  39. Jake formerly of the LP says:

    Bruce- Wisconsin is a “full employment” state because people are leaving in droves, making the population growth near zero. Oh, and that 3.2% unemployment figure is laughably wrong and will be revised up over time.

    http://jakehasablog.blogspot.com/2017/06/31-unemployment-in-fitzwalkerstan-dont.html

    Besides, if we’re such a “full employment” state, why do we need to give away $3 billion of taxpayer dollars to encourage businesses to come here? And what services will we offer to make people want to move here and live here? Explain the doublethink to me.

  40. Wisconsin Conservative Dgiest says:

    In SE Wisconsin there are talented people that have given up on jobs the past ten years that can be trained to do jobs and get good salaries.
    If necessary they will come from through out Wisconsin. They will move up from illinois and be much better off.
    Illinois is run by the Left. Businesses are leaving in droves, along with the people. They are not as dumb as the Left thinks we all are.

  41. Bruce Hall says:

    Jake FOTLP, Wisconsin is reflecting the regional population pattern for industrial states despite having quite a bit going for it in terms of quality of life. It’s true that the unemployment rate has a number of issues including change in participation rate, population change, and survey error. But that affects all states. By and large, Wisconsin isn’t doing badly when compared with the U.S. in total. Historically, Wisconsin’s unemployment rate has been about 0.9 pp less than the U.S. total, but that gap has widened under Walker (that’s good news for Wisconsin).

    Could things be better? Sure, you can move from possible, to plausible, to reasonable and say that things are pretty good.

    With regard to the corporate welfare policies, I previously pointed out that both liberals and conservatives are in accord.

  42. Thomas says:

    Bruce Hall,

    Walker’s promise of 250k jobs in 4 years was not “typical campaign rhetoric.” It was one of a very few specific things he said in his campaign that year. Moreover, he repeated it so frequently that it became a sort of mantra. His abject failure in fulfilling more than half of that promise should make voters question his trustworthiness in general. It also reinforces suspicions of many who have listened to Walker that he is challenged by arithmetic in addition to being challenged by truth.

  43. Vincent Hanna says:

    Yeah there’s a reason Politifact Wisconsin has repeatedly published updates on the 250,000 jobs promise over the years. It was not at all typical campaign rhetoric pledging job growth. And Wisconsin is doing poorly compared to the rest of the nation. Over the last several years we have ranked between 35-40 in private sector job growth and trailed the national rate just about every year under Walker. Sorry but that isn’t “pretty good.”

  44. Wisconsin Conservative Dgiest says:

    Getting Foxconn is like waving a great big flag fro Wisconsin to all the world’s businesses to come here and expand with educated workers, good programs, good electricity and top leaders in State.
    Just like waving the Black Flag when Earl and the Left/Dems drove out KC. Taken us years to recover from that debacle.

  45. Vincent Hanna says:

    All due respect Bruce, I don’t need right-wing propaganda from that buffoon Tucker Carlson to know that politicians always talk about jobs. Again, Walker did more than that. That number was a centerpiece of his campaign by design. That’s why Politifact does a regular check-in on it.

    http://www.jsonline.com/story/money/business/2017/06/02/analysts-wonder-if-wisconsins-slowdown-means-recession-near/359085001/

    One of countless stories I could have shared.

  46. Bruce Hall says:

    Vincent, I don’t really care whence the data source as long as it is accurate. My point, which you don’t dispute, is that all politicians, even your beloved Obama use hyperbole about jobs… and never deliver fully.

    Walker achieved about 80% of his promise of 250,000 jobs. That’s pretty good. Wisconsin’s unemployment rate is well below what was achieved in the expansion prior to 2008. You can hate the man, but he’s delivered more than most.

  47. Thomas says:

    Bruce Hall,

    Please stop knocking Obama in an attempt to elevate Walker. Obama guided us out of the “great recession” of 2007 – 2009 & presided over the most consecutive months of job growth from 2009 – 2016.

    Walker’s promise of 250k jobs was promised by 2014. If he is at 80% of that by 2017, “hooray for Hollywood.” Walker shrank our state’s middle class in part by denying incentives to grow it offered by Obama.

  48. Max says:

    Bruce …. you wrote something that is disputed by reputable analysis of growth and development in economies that embrace capitalism, specifically, “You can hate the man (referring to Walker), but he’s delivered more than most.” If the USA had a planned economy and government owned/operated/controlled all means of production and services, you may be correct. But you may have noticed that privately held and corporate ownership is the predominant means of growth in the USA. The Federal government can influence the economy through monetary and fiscal policies, but not much else, except a little jaw boning here and there. Walker foolishly set himself up for failure (the promise that 250000 would be easy and achieved in 4 years) but something economic illiterates like yourself fall for while cherry picking data you believe supports you ignorant hypothesis. BTW, most serious investors are aghast at the deal the State made with Foxconn. Do you routinely invest your money in deals where there’s no ROI for over 20 years?

  49. Wisconsin Conservative Dgiest says:

    Walker turned the state around from a negative growth, to positive growth that is minus 130,000 to plus 200,000 that is n improvement of 330,000. We have the most people working in our state in history, this is despite the fact that obama never got the economy going in 8 years.

  50. Bruce Hall says:

    Bruce Murphy, what’s your opinion about this: https://www.nytimes.com/2017/09/07/technology/amazon-headquarters-north-america.html?_r=0

    Should Milwaukee put in a bid?

  51. Bruce Hall says:

    Thomas, you wrote: “Please stop knocking Obama in an attempt to elevate Walker. Obama guided us out of the “great recession” of 2007 – 2009 & presided over the most consecutive months of job growth from 2009 – 2016.”

    I’ll take issue with the use of the word “guided”. Obama’s job growth record was proportionally worse than Walker’s and the economic growth as measured by GDP was one of the worst in recent history… even more pathetic considering the normal recession “rebound” barely occurred.

    You can find the U.S. and Wisconsin employment statistics here: https://www.bls.gov/eag/eag.us.htm . Note that is not a conservative, “biased” website.

    You can find GDP history here that clearly demonstrates the poor economic performance under Obama: https://www.statista.com/statistics/188165/annual-gdp-growth-of-the-united-states-since-1990/

    Data are data; opinions are not data.

  52. Vincent Hanna says:

    “Whatever you think of Obama’s policy choices, the U.S. economy did better while he was in the White House than it did under all but one of his five most recent predecessors.” https://www.bloomberg.com/view/articles/2017-01-19/ranking-the-obama-economy

    Meanwhile, https://www.wpr.org/wisconsin-ranks-30th-private-sector-jobs

    That’s not even in the top half. Not sure how you spin that into Walker being a huge success.

  53. Vincent Hanna says:

    Why would Amazon choose Wisconsin? Never happen.

  54. Bruce Hall says:

    Vincent, I’ll see your Bloomberg and raise you CNN . http://money.cnn.com/gallery/news/economy/2017/01/06/obama-economy-10-charts-final/10.html

    A couple of things that Obamaphiles like to take credit for are manufacturing jobs and the stock market, but that’s a bit disingenuous. Manufacturing jobs were driven in large part by shale oil exploration which Obama tried, but failed, to curtail by restricting production on federal lands. State and private land development more than made up the difference. This led to a drop in petroleum/fuel prices which suppressed inflation (so that there was a small rise in real income). The U.S. also became a much larger exporter of fossil fuels, again which Obama unsuccessfully tried to curtail.

    Taking credit for the stock market rise is also disingenuous. The Federal Reserve was forced to keep interest rates at zero to prevent an already anemic economic recovery (boosted by $ trillions of federal “pump priming” spending that had less than stellar effect). The investment community had to abandon bonds and other alternatives to stocks because of no return or high risks, so the stock market became the only investment opportunity. Yes, the market valuation is high, but don’t be fooled too much. The volume of stocks traded is quite thin. The Federal Reserve has wanted to raise interest rates and had a policy target of 2% inflation which would reflect a healthy economy. Neither happened under Obama.

    The labor participation rate also never recovered under Obama. So while the rate fell, it was calculated on fewer “eligible” workers. You’ll note that the welfare rolls under Obama skyrocketed and remained high indicating that job growth was not keeping up with population growth.

    The Bloomberg article cites a number of areas where Obama purportedly gave the economy a big boost, but the CNN article provides a bit more perspective.

  55. Bruce Hall says:

    Vincent, with regard to Wisconsin being ranked 30th in jobs, this article published by U.S. News in March, 2017 shows … by individual state … https://www.usnews.com/news/best-states/rankings/economy/employment
    – Job Growth
    – Labor Force Participation Rate
    – (Low) Unemployment

    Wisconsin ranks 12th overall. It’s true that job growth is slower than some other states at present, but that’s like comparing a glass of water that is 90% full to one that is 50% full and saying that the 50% full glass is superior because more water can be added.

  56. Thomas says:

    Vincent,

    Thanks for your diligent corrections of erroneous rants from WCD, BH, and others … I suspect that some of the reactionaries on this site are jealous of the reactionary Republicans who gathered on Obama’s inauguration day to devote themselves to making him a one-term president. Their prejudice vs Obama blinded them to his achievements.

    Reminder to reactionaries: Obama’s predecessor served as second in his command to his VP throughout most of his first term; when he took command, he “almost wrecked the world” (paraphrase of a Seth Meyers remark when SM anchored the “fanciful news” desk on “Saturday Night Live. )”

    Walker apologists could learn something by listening to our neighbors on the Foxconn deal. Illinoisans and Ohioans are laughing out loud about this deal , at our expense – and our expenses will expand if that deal goes down.

  57. Bruce Hall says:

    Thomas, your opinion that data are “erroneous rants” reflects badly on your opinion.

    Dispute the data with data, not erroneous rants.

  58. Thomas says:

    Bruce Hall,,

    You misrepresent my opinion. I have tried to put some of your data in meaningful context. For example, you gave Walker an 80% achievement on his 250 k job promise by giving him some extra years and some extra “fuzzy numbers.” – a phrase W used in a 2000 debate in which he questioned Al Gore’s opinions on climate change.

    Walker’s people have countless millions of dollars to turn #s upside down to discount his failures and to pretend that he has “delivered … ” I will not dignify “fuzzy #s” as data.

  59. Bruce Hall says:

    Thomas, http://www.jsonline.com/story/news/politics/2017/03/12/gov-scott-walkers-promise-create-250000-jobs-wisconsin-remains-elusive/99001742/

    I believe this is a balanced view. The number is now more like 200,000 jobs, hence 80%. The timeline has been extended which pretty much follows the entire U.S.

    My point was that Wisconsin’s data is VERY GOOD in comparison with most states (read the U.S. News link) and that specific numbers of jobs is less relevant than comparative performance (otherwise there would be no argument over Obama’s mediocre economic performance).

  60. Vincent Hanna says:

    15 states with the strongest economies? Wisconsin isn’t on it, but Minnesota is. http://www.businessinsider.com/the-15-us-states-with-the-strongest-economies-2017-3/#15-oregon-1

    Wallet Hub ranks us 25. https://wallethub.com/edu/states-with-the-best-economies/21697/

    The aforementioned U.S. News? #35. https://www.usnews.com/news/best-states/rankings/economy

    How is this VERY GOOD? You have to have the most broad definition of “very good” ever to think that’s the best label for Wisconsin’s economy. Bruce you are letting your conservative views infect your views here.

  61. Thomas says:

    Bruce Hall,

    “Now more like 200k jobs:: now being 2017 when the 25k were promised by 2015 (when generous #s were closer to 12k) is like asking for a do-over. If you like do-overs, let’s do.over the 2016 election, now that we know that Russian interference in that election could have helped Trump and other so-called Republicans down ticket. Citing #s without context is an irresponsible use of data.

    Bluntly in Trumpspeak, Walker is a loser; Obama was a winner: those who cannot see that distinction have their heads buried in nether regions.

  62. Bruce Hall says:

    Vincent, the U.S. News ranks Wisconsin on many facets. Growth is slow; that’s a given. Employment is in the top quartile; that’s a give. So, do you want the higher growth with more people out of work or will you accept slower growth with nearly all people working? Glass 90% full; glass 50% full? Growth is measured from a base; when the base is smaller than it should be, there is more opportunity for growth.

    It’s the same argument that people make when talking about the splendid growth of alternative energy; the base is so small that any growth looks spectacular.

    Look at all of the various rankings in the article. Wisconsin looks reasonably good in comparison. https://www.usnews.com/news/best-states/rankings . But if you don’t like Wisconsin, Minnesota is nearby and North Dakota not that far away. But I’ll tell you that after spending four years in North Dakota, I’d take Wisconsin. And the black flies in Minnesota aren’t all that great either. But I guess that would be racist to say so.

    Wisconsin is held back by Milwaukee in many of the economic sectors. Perhaps Urban Milwaukee is where the focus of the fixes should be.

    —–

    Thomas, “the Russians are coming?” Seriously?

  63. Thomas says:

    BH,

    Please allow me to indulge in an analogy. I borrowed 20k to buy a new car in 2011. I promised the lender that I would repay the principal + 2% interest over a 4 year period. I satisfied that loan a little ahead of schedule in 2015. Imagine how the lender would have responded if I had paid only, say, 10 k back by 2015. It is possible that the lender could have extended the loan to 2017, but considerable additional interest + some sort of deadbeat fees would likely have been added to the terms. It is more likely that the lender would have repossessed that car.

    Reflecting on the above with regard to Walker’s 2011 promise of 250k jobs by 2015, I think that Walker should return 60% of the salary he was awarded during his first 4 years as governor to the general fund and that a deadbeat fee should be added to what he should return to the state.

  64. Thomas says:

    My bad: I meant to type 40% in the second paragraph of post # 65. I must have been bent out of shape when I hit a 6 key when I meant to key a 4.

  65. Bruce Hall says:

    Thomas, obviously the people of Wisconsin renegotiated the loan based on their understanding that the alternative (letting a less qualified party assuming the loan and taking over the car) was not desirable.

  66. Vincent Hanna says:

    Obviously we can squabble endlessly about the state’s economic climate and whether or not Walker is a good governor. One other relevant issue to consider is the brain drain here. Young people are leaving the state and Wisconsin is not good at attracting young people to work here. I can speak from personal experience as I work in higher ed. The vast majority of people I know don’t want to stay in the state. There is also the teacher shortage problem and the decline in enrollment in teacher prep programs. Teachers are leaving the state. Less people are becoming teachers here. College grads are leaving the state. Millennials don’t move here to work and live. These are not good things. Why are they true? Walker and legislators are at least partly to blame.

  67. Bruce Hall says:

    Vincent, I understand your frustration with the slow pace of economic growth in Wisconsin, but compared with it’s neighbors it isn’t really a unique situation. You mentioned out migration as a Wisconsin issue. Actually, there is virtually no difference between Wisconsin and Minnesota (your model state) in that respect. The Midwest grew on the foundation of manufacturing and that segment of the economy has been eroding for decades.

    For perspective, I suggest you read this article by the frustrated residents of Illinois: https://www.illinoispolicy.org/illinois-out-migration-rate-many-times-worse-than-rates-in-surrounding-states/

    The entire region with the exception of the oil producing Dakotas has been eroding population. Wisconsin, however, is losing less than the region’s average. There are no magic bullets to fix this. Wisconsin is among the manufacturing states that are competing against low-cost global producers and it will take decades for the region to adjust.

  68. Vincent Hanna says:

    I don’t need perspective Bruce. I know it’s worse in Illinois! That’s what every conservative here says twelve times a day. There are 48 other states though. It’s like Bears fans only comparing their team to the Browns. It’s a tired and short-sighted comparison.

    It’s not the slow pace of economic growth. I’m talking about Wisconsin as a place young people want to work and live in. Walker and GOP legislators are hurting and not helping things. Look at how they relish punishing Milwaukee, which is completely idiotic. If young people want to work and live in Wisconsin it’s because of Madison or Milwaukee, not Burlington or Slinger.

  69. Vincent Hanna says:

    Illinois retains college graduates better than we do. States Where Grads Stay the Most (Source: Credit.com)

    10. New York
    Grads Who Stay: 62.65%

    9. Kentucky
    Grads Who Stay: 62.94%

    8. North Carolina
    Grads Who Stay: 63.29%

    7. Washington
    Grads Who Stay: 63.63%

    6. Arkansas
    Grads Who Stay: 63.69%

    5. Nevada
    Grads Who Stay: 64.60%

    4. Minnesota
    Grads Who Stay: 65.17%

    3. Illinois
    Grads Who Stay: 65.33%

    2. California
    Grads Who Stay: 79.62%

    1. Texas
    Grads Who Stay: 80.16%

  70. Bruce Hall says:

    Vincent, I presume you are referencing college graduates. Here’s a basic question: how does the graduation by field align with the distribution of jobs within a state? Think about it. Are UW and Marquette graduating students in fields where jobs exist primarily outside of Wisconsin? If your degree is in finance, are you more likely to stay in Wisconsin or go to New York? If your degree is in computer science, are you more likely to stay in Wisconsin or go to California?

    Wisconsin is a two-song state: agriculture and manufacturing. Rural areas in Wisconsin, just like Minnesota and Michigan, are losing population rapidly. So, yes, urban areas are the anchors for population, but if the universities are not focused on aligning their major efforts with the region’s needs or opportunities, graduates will leave.

    In Michigan, the University of Michigan and other area universities have done a great deal to align their efforts with the growth opportunities of the state. http://urcmich.org/newsletters/michigans-university-research-corridor-a-decade-of-helping-drive-a-states-rebound/. What have the major universities in Wisconsin done to foster a situation where their programs produce graduates who fit into the state’s economic environment? Number of overall graduates is not a meaningful metric in this context.

    Certainly universities cannot force students into specific fields, but universities can align their primary programs to the needs and future of the state… which is what these Michigan universities have attempted to do. On Wisconsin?

  71. Vincent Hanna says:

    I know that sadly we have a governor and legislature that are hurting, not helping, the UW System. https://www.washingtonpost.com/news/answer-sheet/wp/2015/06/05/is-gov-scott-walker-putting-the-university-of-wisconsin-system-in-jeopardy/?utm_term=.8c8f49d59f94

    Just last week I heard employees from a state university talking about how they keep getting their best & brightest poached from other states who know all about the struggles here.

    I believe the UW system is trying to address what you refer to above. UW System has key role to play in the state’s economic development
    Thursday, November 6, 2014
    MADISON – As the state’s largest developer of human potential, the University of Wisconsin System is in a unique position to help grow a stronger Wisconsin economy, President Ray Cross told the Board of Regents Thursday.

    “We are part of the solution,” Cross said, adding that the UW System must “take the lead with our partners in the legislature and the private sector to do what is necessary to fully implement the Talent Development Initiative and address the challenges.”

    The Talent Development Initiative, first introduced to the Board in August, is a vision for how the UW System can align its resources in three critical areas – the talent path, the talent infrastructure, and the talent-based economy – to better meet the current and future needs of the state’s employers.

    Wisconsin is facing an unprecedented “flattening” of its workforce in coming years as the state’s population becomes increasingly older, according to Todd Berry, president of the Wisconsin Taxpayers Alliance. Leading a presentation on demographic trends, Berry told Regents the result will be a smaller workforce that must increase its overall productivity for the state’s economy to grow.

    Berry also pointed out the strong correlation between employment and the creation of new businesses, and the role that higher education can play in encouraging a culture that values risk-taking and innovation.

    The availability of talent “is consistently the No. 1 or 2 issue in every conversation we have with a company that has a long-term investment in our community,” said Todd Battle, president of the Kenosha Area Business Alliance, noting that concerns are being expressed over whether the talent pipeline can keep up with businesses’ demands and investments.

    Secretary Reggie Newson, of the state’s Department of Workforce Development (DWD), shared a report indicating that by 2030, more than half (51%) of all new and replacement jobs are projected to require at least an associate degree, with 41% requiring a bachelor degree or more. Currently, about one-third (36%) of working-age adults in Wisconsin have at least an associate degree and one in four has a bachelor degree or higher. This mismatch in the talent pipeline must be addressed for Wisconsin’s economy to grow, Newson said.

    “We need the alignment of workforce and economic development and education, pre- and post-secondary education, to the specific demands and needs of business and entrepreneurs in Wisconsin. We want to incentivize that behavior across the state,” Newson said.

    Over the next decade, the DWD projects that the highest-demand occupations for degree-holders will be in healthcare, education, computer analysis, accounting, marketing, and managerial professions.

    UW-Madison Chancellor Becky Blank, the former acting Secretary of Commerce, said that to succeed in today’s highly competitive economy, U.S. businesses must be nimble, innovate, and have new ideas. “That is what our institutions provide in terms of the people that businesses need to hire and, particularly for research universities, the ideas and the collaboration on innovation that they need.”

    “We produce the people whose incomes are going up, who are necessarily the leaders who are going to create jobs, come up with new ideas, and lead the businesses that are going to be successful in this country in the future. That’s the main argument for what we do and why we’re so important,” Blank said.

    Blank was part of a chancellor panel that included UW-Stout’s Bob Meyer, UW-Green Bay’s Gary Miller, and UW-Platteville’s Dennis Shields.

    The focus of Thursday’s meeting was how the UW System should align its resources to better meet the needs of the state.

  72. Bruce Hall says:

    ““We need the alignment of workforce and economic development and education, pre- and post-secondary education, to the specific demands and needs of business and entrepreneurs in Wisconsin. We want to incentivize that behavior across the state,” Newson said.”

    Yes, that’s correct. But simply churning out graduates doesn’t provide that alignment. The universities, businesses, and state and local governments must work together for alignment to occur. That’s what was begun in Michigan nearly 2 decades ago. It’s not the only answer, but it addresses a significant problem. Unfortunately, if you create a pie chart of the undergraduate degrees by field of study, you begin to see where the disconnect between education and employment opportunities exist.

  73. Wisconsin Conservative Dgiest says:

    Ten years from now there will be 40,000 plus people with new and better jobs cause of Fox Conn, as people leave bottom end jobs to Fox Conn to get better salaries and bennies, 401 k’s.
    This will spawn more construction of homes, apts. and everything that a city that big will bring. This is going to bring the biggest boom in Wisconsin history to SE Wisconsin.

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