Walker’s Failed Jobs Agency and Arena Deal Reveal Wisconsin’s Bankrupt Economic Strategy

by Robert Kraig

Wisconsin lacks a serious economic strategy. The two biggest economic stories in the headlines recently, Governor’s Walker’s failed jobs agency and the new Bucks arena, are both powerful illustrations of this same problem.

In the Bucks arena deal, the public share of the cost keeps growing, and it appears Milwaukee County may be left with tens of millions of dollars in liability which could force future cuts to vital public services. As corporate and elected officials struggle mightily to create some kind of ponzi scheme to make the arena happen, virtually no one is asking the most obvious strategic question: is this the best investment of up to $400 million dollars for creating more family supporting jobs in a city that desperately needs more economic opportunity? Furthermore, the one thing that actually could make the arena worth it to the public - the obvious precaution of establishing actual standards requiring a definite number of permanent family supporting jobs in return for public money - does not even seem to be on the table.

The absence of strategy to restore family supporting jobs is also evident in the scandals surrounding Governor Walker’s economic development programs. There is virtually no one left defending the performance of Walker’s failed jobs agency, the Wisconsin Economic Development Corp. (WEDC). Despite this, there is a pronounced tendency among elected officials to propose piecemeal reform of the failed agency. But the problem with WEDC is more fundamental than incompetent staff, lax oversight, lack of transparency, slippery job creation claims, and even troubling circumstantial evidence of corruption.

The root cause of WEDC’s failure is the notion that Wisconsin’s precious job creation dollars should be handed out to well connected corporations with less public control and transparency. The results have been even more catastrophic than early critics predicted. Not only is Wisconsin lagging behind the rest of the country in job creation, the jobs are being added in mostly poverty wage occupations. As a result poverty levels are increasing in Wisconsin even as employment increases.

What is striking about WEDC is the lack of any comprehensive strategy to address the decline in family supporting jobs. This is no accident, it is fundamental to the whole concept of spinning off the state’s job creation agency so it can hand out corporate subsidies more “efficiently.”

Many of the practices attributed to bad management at WEDC are rooted in its approach to economic development. WEDC continues to allow corporations receiving public job creation dollars to outsource Wisconsin jobs, and stubbornly refuses to require proof that promised jobs are actually being created, not because they are incompetent but because they blindly assume that handing out money to well connected corporations is itself a positive outcome.

The only real solution to the scandal of WEDC is to close the failed agency, and replace it with a fully accountable public agency. The replacement should have the explicit mission of dramatically increasing the number of family supporting jobs in Wisconsin, especially in the most economically challenged areas of the state where the gap between workers and the availability of quality jobs is most severe.

This new job agency should be required to develop evidence-based strategies for rebuilding the middle class and opening it to all who are currently shut out. There should be clear benchmarks and reporting, so the people of the state can hold their state government accountable. There should also be rigorous accountability for any firm receiving public job creation dollars, as the goal of this new agency will be not be to hand out corporate welfare but to expand economic opportunity for workers.

If we had such an agency, and real economic strategy for building economic opportunity, we would be in a much better position to judge the value of the Bucks arena deal. Of course, the corporate elites pushing the deal don’t really want that, because the arena may not be the most productive uses of $400 million dollars in a region starving for more family supporting jobs. It might be a better deal for workers if there were real jobs standards attached, to make sure that we subsidized good jobs not poverty wage jobs, but this is absent from the debate.

One of the reasons we have WEDC and will probably get a new publicly subsidized Bucks arena with virtually no assurance it will create family supporting jobs, is that the corporate leaders and the elected officials they underwrite don’t want serious accountability for their grand economic promises. Can you imagine the Bucks owners being required to return the public money if the rosy job creation projections being use to boost the project did not come true?

This would be funny if the results were not so catastrophic. According to a recent report by the Pew Charitable Trust, since 2000 Wisconsin’s middle class has shrunk more than any other state, and real median household income has declined a stunning 14.7%. This decline in job quality is damaging the entire economy. As more and more working families have trouble affording the basics, they have less to spend in their local communities, perpetuating a downward economic spiral.

Its time to scrap the failed WEDC experiment, and begin to develop real strategies for building a 21st century economy that works for everyone. If we had an economic strategy, we would be in a position to have an honest and rational public discussion of the Bucks arena, and future big ticket development proposals yet to come.

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