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Wednesday, Oct. 20, 2010

Elections Have Consequences: Job Creation in Wisconsin

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One of voters’ top concerns on Nov. 2 will be which gubernatorial candidate can deliver on his promises to create more jobs in Wisconsin.

So, how do Democratic candidate Tom Barrett and Republican Scott Walker compare?

Barrett: Menomonee Valley Development Is a Blueprint for Success

Milwaukee Mayor Tom Barrett is making his job-creation record—and, in comparison, Scott Walker’s record—a central part of his campaign for governor. Barrett has pointed to the successful redevelopment of the Menomonee Valley—a former 300-acre brownfield site—as an example of his efforts to attract jobs to the city. During the tenures of Barrett and John Norquist, 4,200 jobs have been created in the Valley at the same time 45 acres of native plants and 7 miles of trails were created. Examples include an expanded Palermo’s Pizza and Potawatomi Bingo Casino; soon-to-launch Ingeteam and Helios; Derse, Charter Wire and the Harley-Davidson Museum, among others.

The redevelopment of the Pabst Brewery and Manpower’s decision to move its headquarters to the city also happened on Barrett’s watch.

The mayor released a 67-page jobs-creation plan outlining what he’d do as governor. Barrett’s top priority is to tie corporate tax breaks only to those companies that will create jobs, as opposed to a blanket tax cut for all businesses. He wants to tweak the recently closed “Las Vegas loophole” so that Wisconsin businesses aren’t shedding jobs because of it. He’s offered to create a small-business ombudsmen and streamline business regulations. Construction projects in economic redevelopment areas will get a short-term 20% tax break. And he wants to provide more job training assistance for companies that need more skilled workers.

Barrett has also drawn a sharp contrast with Walker on stem cell research. Barrett sees stem cell research as a critical component of the state’s overall economy and wants scientists to be able to pursue their research without unnecessary government interference.

According to research compiled by Wisconsin Stem Cell Now, almost 24,000 private sector bioscience jobs, 11 stem cell companies and more than 640 related businesses have been created in Wisconsin, with a $7 billion impact on the state’s economy.

Walker, on the other hand, opposes embryonic stem cell research and would halt state support for it, which could reduce the amount of government funding and private capital flowing into biotech companies. That kind of limitation could jeopardize millions of government and private dollars that have been invested in the state, as well as the future of this industry in Wisconsin.

Walker: Big Promises, No Details

On the other hand, Scott Walker has made yet another arbitrary promise on the campaign trail: that he’d create 250,000 jobs and 10,000 new businesses in his first term.

As of August, 239,100 people were officially classified as unemployed in Wisconsin. The creation of 250,000 jobs would push the unemployment rate to close to zero when you add in the “discouraged workers” not counted in the official unemployment rate. That would never happen because wages would increase dramatically, causing companies to move to other states.

To attempt to show that he’s serious, Walker unveiled a five-page job plan, one page of which is pictures. His core strategy is to cut about $4 billion in taxes, primarily for the wealthy and corporations.

Yet Walker’s belief in trickle-down economics—last put into practice by President George W. Bush—has been proven not to work. As Nobel Prize-winning economist Paul Krugman noted in a 2007 essay, Bush’s tax cuts resulted in 8.5 million jobs created from 2003 to 2007 (following the loss of 2.7 million jobs early in his administration), before the recession really hit. Yet Bill Clinton raised taxes on the rich and 22.7 million jobs were added during his term.

What about those Bush-era jobs? Workers found their wages had stagnated and the percentage of workers with health insurance provided by their employers “plunged,” Krugman wrote. Yet corporate profits rose 72% between 2003 and 2007 and the richest 0.1% of Americans saw their real income increase 51% between 2003 and 2005.

So, yes, the rich really did get richer while the rest of us saw no real gains in income, job security or benefits.

Walker plans to implement the same strategy in Wisconsin.

Walker’s other ideas are mostly a wish list of failed Republican and conservative corporate proposals. He wants to end “frivolous lawsuits” so that corporations can’t be held accountable for their actions. But what’s frivolous? Would Walker argue that Milwaukee County’s lawsuit against Mercer over the pension fund—which resulted in a $45 million settlement—was frivolous?

Walker also says he wants to invest in education and infrastructure (though not rail). Yet his $4 billion in cuts to state revenue, combined with the $2.7 billion state budget deficit he would inherit, gives him little revenue to invest. Walker also wants to loosen regulations in the telecommunications laws, which usually results in higher rates for the customers and increased profits for the telecom giants.

Walker’s job plan also includes reducing state spending by cutting 400,000 people from BadgerCare, which serves low-income Wisconsinites who can’t afford health care provided by their employer or who work for an employer that doesn’t offer health care.

Walker also wants to eliminate state taxes on health savings accounts, a notion that wouldn’t increase access to health care but was pushed in past legislative sessions by the Metropolitan Milwaukee Association of Commerce (MMAC), Wisconsin Realtors Association and Wisconsin Manufacturers & Commerce (WMC), as well as insurance companies like Humana, American Family, Fiserv Health, Sentry Insurance Group and WPS Health Insurance. And you know that MMAC, WMC and the insurance companies only push legislation when it helps their bottom line, not yours.

Lastly, Walker is “fighting to opt out of the ‘job-killing’ health care bill passed by Congress.” Now, just whose job is being killed? The health care bill is a boon for small-business owners and entrepreneurs. Small businesses that provide health care to their employees can begin receiving a tax credit this year. Potential entrepreneurs will be able to leave their day jobs and strike out on their own, since they’ll be able to purchase health care on the proposed state exchanges.

And 90 Wisconsin businesses and unions have applied for the Early Retiree Reinsurance Program offered through the federal health care reform bill, which will offset the costs to insure early retirees (55 and up) who are still on their former employers’ plans. Some of the businesses that applied for this “ObamaCare” perk are represented on the boards of WMC and MMAC, like Briggs & Stratton, Marshall & Ilsley Corp., Rockwell Automation and Journal Communications. Even Milwaukee County, under Walker’s leadership, applied for the program.