Thursday, July 27, 2017

On Day 2- it's already an obvious Fox-conn for Wisconsin

As we get more information from the campaign-driven scam that is Wisconsin's $3 billion giveaway to Foxconn to make LCD screens in the some some site...additional questions keep coming up as you take further looks at the proposed package.

The obvious first question is "Why would we trust Foxconn to ever follow through on adding these jobs, given their history of jerking places around?", and that's followed closely by "What can the state do if Foxconn doesn't hold up its end of the bargain?" Walker was insisting today that there would be provisions to get back money from Foxconn if all of the jobs were not added or did not stay in Wisconsin (and amazingly, Walker derided "cynics" who didn't believe he'd follow through on it. ALWAYS projection with these guys).

Along these lines, MATC-Milwaukee Econ instructor Luz Sosa had this editorial arguing against the Foxconn deal appear in yesterday’s online version of the Capital Times, written before the Foxconn agreement was public. I guess timing is everything, as this piece has been spread around in a few places today, and it's a good one to read.

To go along with major concerns about WEDC’s lack of oversight on prior giveaways for jobs during the Age of Fitzwalkerstan (as outlined in a May audit by the Legislative Audit Bureau), Sosa mentions that any legislative package for Foxconn should include the following.
1. Foxconn must identify the specific number of jobs it will create and sustain for a minimum of five years.

2. If it fails to deliver, there must be a “clawback” provision requiring this multibillion-dollar corporation to pay back the state or local government that financed the investment.

3. Using the Milwaukee Bucks arena development as a model, require the firm to pay all of its employees $15 an hour or more.

Of course, during negotiations Foxconn will claim it can get a better deal in another state. If that’s true, let somebody else be the sucker. Wisconsin’s hardworking people deserve a real bang for their bucks.
We absolutely will pay a price for this giveaway in the form of higher taxes or reduced services, especially before the facility is built, because Foxconn and construction companies will be getting write-offs without any other jobs being added at the site, or any products being made.

We already know Walker is fudging with how many jobs will be part of the Foxconn plant. Scotty was claiming there would be over 13,000 jobs added due to this deal, but the company itself said a much smaller number would ultimately be making these LCD screens. Check out this sentence from the Washington Post's overview of the Foxconn story.
Walker, a Republican who is facing a difficult reelection next year, said the investment would create 13,000 jobs, with an average pay of $53,000 plus benefits. But the company said that it would be hiring 3,000 workers over four years. It added that it could eventually hire more but did not provide further details.
Apparently, Foxconn Chairman Gou learned his lines and is now saying the plant would start with 3,000 people and EVENTUALLY reach 13,000. Surrrreeee Terry. And be very suspicious of that “$53,000 average salary” figure that Walker and the corporate cheerleaders are throwing around as well. That number could easily be skewed upward by a few executives and supervisors making 6 figures, while the typical Foxconn worker makes well below that.

Even a 3,000-job plant would still be a very good deal if it involved few subsidies, but it’s a horrible deal when you consider Wisconsin may be giving away an average of $200 million a year for 15 years. That comes to about $66,000 a year PER JOB, well below the $53,000 average salary that Walker and his sheep are bleating about today, let alone the $3,000 or so that $53,000-a-year worker would pay in state income tax.

Oh, and there was this thing that came up today.

It was quickly shot down after that idea was made public, but note the weasel words in Stein's report.

Anyone who's ever read David Cay Johnston's excellent book Free Lunch knows that (ab)using eminent domain is a common way that corporations and retailers grab land at values well below the market rate, especially when they're part of politically-motivated "economic development." That leak also tells me that we need to look at every line in this bill once it's more public, because you can bet there will be crap that goes beyond just the details of the tax giveaways to Foxconn.

OH LOOK! We're seeing some of that "crap" emerge as I type this. Perhaps literally.

And you know there's more. There will be a lot more. And it's why we need to see this Foxconn bill in its entirety and have a full debate on it, instead of have it rammed through in a "special session" before we can find out all of the hidden subsidies and giveaways that the bill will be filled with.

Like most things in the Age of Fitzwalkerstan, the more you look into things, the seamier they become. Stay tuned, and stay aware.


  1. And now we have the MOU between Wisconsin and Foxconn online. So feel free to give that a look.

    It says Foxconn will be expected to create "UP TO 13,000 jobs with an AVERAGE salary of $53,875 over a period of six years."

    Lotta wiggle room in there, isn't it?

  2. Thank you for providing this info, something I could not look into in the course of my day.

    Yep, "up to 13,000 jobs" over 6 years, with "average," not median or regular salary to those jobs, is a huge warning flag. Something they can weasel their way out of--using our tax money, from Racine to Superior, to benefit not a Wisconsin company job-producer, but another interest that wants to take advantage of Wisconsin, just as they did in Pennsylvania.

    Say NO to this deal and road privatization that is packaged into it.

  3. Struggling to imagine how WEDC is gonna implement this. Looking at their last annual report, they awarded $197M statewide in 2016... and we know how they've botched even the simplest aspects of managing these 'incentives'. Are they gonna DOUBLE their staff just for FoxConn? Whole thing stinks, but I'd feel a tiny bit better if, say, DOR handled the whole thing.
    Also... that $197M in 2016 is supposed to result in 8,162 jobs created and 26,747 jobs "impacted" (sounds painful). If we take WEDC at face-value (lol), $3B for 13,000 jobs is crazy-inefficient by their own standards. $3B should result in something on the order of 100,000+ jobs.

    1. Good research there. Thanks for sharing.

      There is a whole lot of taxpayer money going out the door for something that's not promising s ton of return. And if the natural resource of Great Lakes water is an advantage, why do we need all these giveaways to generate activity?...ON TOP OF the huge and ineffective M&A tax credit?

  4. Was looking on the Internet today, and found an interesting report on what's involved with this Foxconn deal:


    Foxconn has quite a history of turning workers into robots (they call them "Foxbots," valued at some $ 20K appiece, because they would rather use a robot for work than a human), which would be an M&A tax credit benefit.

    Also, they use underage workers, calling them "interns," to skirt minimum wage laws, which seems to apply to the recent WisGOP effort to utilize 16- and 17-year olds to decide for themselves about being "workforce" participants, all at minimized wages.