Foxconn and its impacts

As you can imagine, the announcement of Foxconn’s building a southeastern Wisconsin plant and bringing with it 3,000 to 13,000 jobs reverberated throughout Wisconsin.

And beyond. The Chicago Tribune editorialized:

Early this month, when they hit taxpayers with a 32 percent jump in the individual income tax rate, many legislators broke a promise they had made: No more tax hikes without major reforms to help Illinois’ moribund economy. Don’t worry, said Democrats who pushed the tax hike. We’ll get to those reforms soon enough.

But not soon enough, we now see, to keep electronics giant Foxconn from bypassing Illinois to make a jobs-rich investment in southeast Wisconsin. This is a huge win for Scott Walker, the Republican governor of Wisconsin whom Illinois Democrats loathe. Just as this is an embarrassment for Illinois House Speaker Michael Madigan and Senate President John Cullerton.

Once again, the people of Illinois see how Madigan and Cullerton, with their combined 86 years in Springfield, have left Illinois ill-prepared to compete for 21st-century jobs. Their agenda is about raising taxes, not about delivering those reforms. As we wrote a few days ago, every other state on Foxconn’s short list looked better than Illinois by the basic measures of financial stability and pro-growth economies.

No wonder, then, that Illinois is starved for jobs. We expect to learn more in coming days about Foxconn’s thinking. We don’t know details of whatever federal, state and local government incentives lured the company Beyond the Cheddar Curtain. And we can’t be certain how many billions of dollars in investment, and how many thousands of jobs, Wisconsin will gain.

But we do know this: Wisconsin boasts a freshly burnished global image. One of the planet’s largest tech firms, with a million workers worldwide, says its search led it to bet a fraction of its future on Wisconsin. Assuming that happens, expect robust economic growth from suppliers, subcontractors, construction companies and other businesses that will serve Foxconn and its workforce.

Cranky Springfield apologists for Madigan and Cullerton will say we’re overreaching, that Gov. Bruce Rauner is somehow to blame for losing Foxconn to Wisconsin. Except Rauner has been pushing exactly the kinds of employer-friendly reforms that Madigan and Cullerton have resisted, often to please their allies who lead labor unions. …

Enough of their games. Foxconn’s choice of Wisconsin offers a fresh opportunity to act on what’s wrong with Illinois:

We await the reforms legislators promised, so that Illinois doesn’t keep driving employers to other states.

RightWisconsin compares and contrasts:

So here’s the deal. Wisconsin gives Foxconn $3 billion in tax incentives over 15 years, provided they meet their performance targets, and in return Wisconsin gets a manufacturing facility that will have a $7 billion annual impact on Wisconsin’s economy.

The factory will eventually employ 13,000 workers earning on average $53,875 plus benefits. The new Foxconn facility will bring 22,000 “indirect and induced jobs” to the state. In addition, the construction of the new Foxconn facility will mean 10,000 construction jobs as well as 6,000 indirect jobs.

Let’s compare that to “the one that got away.”

Wisconsin Democrats will never forgive Governor Scott Walker for rejecting the proposed high-speed rail between Milwaukee and Madison. That project would have cost the federal government $810 million. That amount did not include local costs for building stations, the cost of former Governor Jim Doyle’s secret train deals with Talgo, and other ongoing costs.

Despite Democratic false claims that the high-speed rail (which was slower than taking a car) would lead to more economic development, that project would have only created 55 permanent jobs.

It’s amazing how many jobs the private sector can create while manufacturing 21st century technology for consumers compared to the government using 19th century technology to create a service that would have to be subsidized by the taxpayers. We’ll take the factory manufacturing LCD screens over Democratic toy trains.

Foxconn will pay, based on a minimum 3,000 and a maximum 13,000 jobs, $161.625 million to $700.375 million in payroll. That is not counting those estimated 22,000 “indirect and induced jobs” from companies that serve Wisconn Valley. Nor does that count those 10,000 direct and 6,000 indirect construction jobs that building LCD World will create. As stated here and elsewhere, those tax incentives cost the state nothing, because nothing stated in this blog would have happened without Foxconn choosing Wisconsin.

 

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