State of Milwaukee’s economy
Milwaukee’s economy is much like its weather — changing by the minute — and our institutions have to be nimble enough to adapt to those changes.
Organized by the University of Wisconsin-Milwaukee, WUWM and WisBusiness.com, the panel featured Rose Oswald Poels, president and CEO of the Wisconsin Bankers Association; Julia Taylor, president of the Greater Milwaukee Committee, William Holahan, professor, UW-Milwaukee economics department; and Dave Rotter, president and chief executive officer of National Ace Hardware and member of the Wisconsin Energy Conservation Corporation.
Panelists acknowledged that the city’s economic health has been ailing during the Great Recession, and the reasons are numerous. But the panelists discussed possible cures for the ailing economy and pointed out Milwaukee’s strengths, and where there are pockets of growth in the city.
Citing data from a Brookings Institute report released in December, Taylor said Milwaukee gained manufacturing jobs between the third quarter of 2010 and third quarter of 2011.
“Milwaukee always had this great industrial heritage,” she said. But today’s industrial jobs are in newer technologies, such as telecommunications, and she said merely adding jobs is not the same as driving economic growth.
Rotter, meanwhile, said as a business owner, he sees lack of support to existing businesses in the form of tax credits and a lack of access to capital as drains on the economy. Tax credits are given to start-ups instead of established businesses, which carries more risk, he said. “Existing businesses have more of a chance to be around five years from now. We have to maintain what we have.”
Likewise, undue regulation, Rotter said, is a job-killer. In particular, he pointed to health care reforms requiring employers to pick up the tab for workers’ insurance.
“My view is putting the health care burden on business is taxing the employer,” he said.
Holahan agreed with Rotter that health care should not be the employers’ burden. He said the benefit was tied to jobs at a time when workers were scarce.
“It’s a dinosaur,” he said. “It’s an artificial linkage.”
But he identified another factor that is crucial to getting the Milwaukee-area economy up and running: the city’s infrastructure. When a city’s roads and utilities are not maintained, it’s a signal of decay and drives business away, he said, and the best time to repair the infrastructure is in a recession.
“You employ otherwise unemployed workers,” he said. “You also put money into the economy to stimulate the demand side.”
Oswald Poels acknowledged that the banking industry’s lending standards have changed, and she blamed regulation for that as well. Regulators are looking for businesses to have a steady two-year cash flow, not just collateral. Those that don’t, she said, will likely not be issued a traditional loan.
But she said banks work with community partners, such as the Wisconsin Women’s Business Initiative Corp., which primarily helps women and minority entrepreneurs get started – to “mitigate risk.”
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