Governor Scott Walker has been celebrating the deal he made with Foxconn Technology Group, a Taiwan-based company. Estimated to create 3,000 jobs in 2020 and up to 13,000 in six years, we all share the Governor’s excitement regarding the huge potential economic impact for Wisconsin. Construction alone, both direct and indirect could yield possibly 22,000 jobs. When Walker and Foxconn signed a Memorandum of Understanding (MOU) for a $10 billion plant to be built near the Illinois state line, cheers came from around the state.
In exchange for Foxconn’s investment, Walker proposed an incentive package allowing the company to earn up to $3 billion in tax credits over 15 years. Yet, there are safety net provisions that would lower incentives if Foxconn fails to live up to its end of the bargain. However, Walker and supporters are offering unprecedented enticements to lure the business to the state, requiring that we slow down and look closely at the terms of this deal.
For instance, we would be creating a new manufacturing zone and suspending many of the procedures and permits that protect the state, local communities and residents. We would forgo an environmental impact statement, waive water quality certifications, and render the Department of Natural Resources nearly irrelevant. The state would borrow $252 million to finish the work on I-94 running from Milwaukee to Illinois, and there’s more. The devil truly is in the details.
There are questions about how Milwaukee’s chronically unemployed or underemployed will benefit. Will state residents with a felony record be given a chance at employment? How will we get workers to the plant? Will the average wages be nearly $54,000 annually or is there talk of lowering hourly wages to $15.00? What will it cost to train our workforce? Assuming all of the jobs go to Wisconsinites.
Illinois residents are already discussing crossing the border to work at Foxconn and President Trump recently encouraged unemployed workers from upstate New York to move to Wisconsin for these jobs, as well. All while, economists estimate Wisconsin will pay $67,000-$100,000 to subsidize these jobs, perhaps for non-state residents. But my concerns don’t stop there.
Foxconn has backed out of business deals in the past, even with a signed MOU. In 2015, Foxconn agreed to invest $5 billion in India and generate 50,000 jobs. So far nothing. In 2013, the company promised to invest $30 million and hire 500 workers in Pennsylvania. Nothing. Human rights organizations have chided Foxconn for unpaid overtime, cancelled employee lunch breaks, and unsafe working conditions in three of their factories.
This announcement is no small deal and has the ability to positively or negatively affect a great number of people, so we must get it right. Although the Governor continues to tout the potential jobs created, in the hunt to get this deal, we must ensure that Wisconsin is not outfoxed.