Will Wisconsin even have the people to pull off the Fox-con?

As the Foxconn package comes up for a vote in the full Assembly tomorrow, more discussions of the project and what might actually happen if the multi-billion dollar giveaway incentive package becomes law. What hasn't been brought up much is the question about how the Foxconn package fits into the overall state economy.

State Rep. Gordon Hintz put that other factor in play when it comes to questioning the Fox-con - can a state with a stagnant and aging population even handle a massive project like this?

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….

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.”

Hintz goes on to note that Wisconsin takes in a smaller amount of immigrants than much of the country (4.8% foreign-born vs 13.5% nationwide), so there’s no help in the state’s demographic issues there, and while the low amount of people in the working-age population could mean a labor shortage that drives up wages (which would be good if it happens), Hintz adds that this will increase the incentive for Foxconn to turn to robots and other automation faster.
Not sure I agree with the “higher wages” part of the hypothesis from Rep. Hintz, as I think Wisconsin’s low manufacturing wages are something that won’t change with the Fox-con, but I agree with the point about Foxconn automation being a real possibility (especially over 25 years) and lessening the payoff in terms of jobs and income taxes. But there are two other more factors that also are in play.

A generic job making $12-$15 an hour at Foxconn isn’t going to be something that makes a person pack up and leave for Racine or Kenosha County on his/her own. That area is going to have to offer quality schools, decent roads and services, and a good quality of life in order to encourage the labor pool that will be needed for such a large project. Given the future budget cuts and environmental degradation that will accompany this Fox-con, that will not happen. It exposes what a rushed, desperate gimmick the Fox-con is, as there is no larger strategy coming from Gov Walker or the WisGOP Legislature beyond trying to cut taxes on the rich and corporate, and funnel taxpayer dollars to campaign contributors.


Do the white guys in this pic have a clue?

In addition, if people actually do choose Foxconn over other employers, what happens to other businesses that aren’t getting a state handout? There is already displacement going on in the state’s economy due to legislative buffoonery in the WisGOP-run Capitol. Take a look at this article that floated out near the end of last week from the Daily Reporter, and these words from Terry McGowan, the head of the International Union of Operating Engineers.

WisDOT officials have seen the state’s highway money dwindle in recent weeks as lawmakers struggle to pass a new two-year budget. Wisconsin’s previous spending plan expired on June 30. Without a new budget in place, the state continues to run on a “base-level” of funding that does not include the sort of new bonding that many road projects depend on.

McGowan said the budget struggles are having real consequences for the union members he represents. At a Local 139 meeting in Pewaukee on Wednesday evening, he was told by several people that they had “migrated” from road jobs to working on buildings and underground utilities.

“The road industry has been unreliable,” he said.

McGowan also mentioned that operating engineers are disheartened when they hear that some lawmakers want to repeal what remains of the state’s prevailing-wage laws. Uncertain that they will be able to continue making a decent wage on public jobs, many have decided to try their luck in the private sector.

There are only so many construction workers to go around, and if the ALEC-GOP Legislature continues to support wage suppression laws that discourage workers from choosing Wisconsin as a place to work, what happens when Foxconn sucks up most work in that area? Do costs go through the roof, and/or are businesses not able to afford to hire contractors because Foxconn takes up too much of the work?

Now add in the pothole-filled roads in other parts of the state that become even less likely to be fixed, and the likelihood of budget deficits leading to cuts that affect jobs and services in all parts of the state, and you can see where funneling so many resources toward Foxconn could hurt the economy in many other parts of the state.

This displacement of spending and economic activity isn’t mentioned in the Legislative Fiscal Bureau’s analysis of the Fox-con, but maybe it should. Because without a reversal of the recent trend of people leaving and/or growing old in Wisconsin, there will inevitably be problems in trying to find workers to do the work needed. This is true not only for Foxconn, but for other parts of the state’s economy. And I don’t see the ALEC-GOPs passing anything that’ll make the casual person want to come to Wisconsin - on either the “pay and work conditions” side, or in the “quality of life” side.

Well, there is one way to increase the likelihood of workers being available for jobs on the Fox-con - a recession with sizable unemployment. But if that's the case, wouldn't a New Deal-style public works package do a lot more good for Wisconsin than using all of those tax dollars on one corporation (and allow a lot more Wisconsinites to reap benefits from those projects)? And oh yeah, a recession would collapse the state’s house-of-cards finances faster than the Fox-con will.

So barring some kind of unforeseen "Escape to Wisconsin" by people who don't live here now, we're pretty screwed if this Fox-con package becomes law.