Finding A Better Approach to Economic Development in Wisconsin

With news today that no, Foxconn will not be building the factory they said they were, I cannot help but think about what proper economic development should look like in Wisconsin. To be fair, it appears Foxconn will still have a presence in Wisconsin, and I do hope it has a positive economic impact, but based on the boondoggle it has been up to this point I am not optimistic. Upon reflection, Governor’s Walker’s approach to economic development was flawed from the start.

As I wrote at the time, the 200,000 new jobs promise was mere pandering reflecting a cynical political calculus at best, and a profound ignorance at worst. The creation of the Wisconsin Economic Development Corporation (WEDC) made sense in concept, but its revolving door leadership and corresponding organizational dysfunction is evidence of an idea that was not well thought out. Details matter. And then we have Foxconn, an attempt to purchase jobs that is revealing itself to be more and more flawed every day.

So what does a good economic development approach look like? I like to divide it into Tier 1 and Tier 2 strategies. Tier 1 strategies are prerequisites that serve as the foundation for economic development. First, we need a sensible tax environment that does not give other states a significant competitive advantage. Credit where credit is due, Walker was fine on this front. Second, we need an honest budget that is not reliant on transfers, delayed projects, and one-time tricks. Third, we need strong infrastructure that can support businesses’ needs. So roads, public transit, etc. These tier 1 strategies are necessary, but not enough.

Tier 2 strategies involve making Wisconsin a place where businesses and their employees want to be. First, we need strong urban policies that reflect the need for Milwaukee and Madison to be the engine that drives the state’s economy. All the recent urban bashing from the right is damaging on this front. Second, we need strong education systems from K-12 to higher-ed. People want to live in areas with strong schools. People want their kids to be able to attend good affordable colleges. Employers need well-educated workers. Universities can also serve as partners in innovation that facilitate entrepreneurship and new job creation. Third, we need strong local governments capable of providing good services to their residents. Strong communities require governments with the fiscal capacity and independence to meet the needs of their citizens. A move towards a cooperative federalism where external funds are seen as an asset, and local governments are empowered with the autonomy necessary to meet local needs is preferable to Wisconsin’s drift toward state dominance. Fourth, we need a functioning politics. Gerrymandering, curtailing of executive power for blatantly political reasons, and hard lines on revenue options broadcasts to the world that Wisconsin politicians favor short-term power over stability and the establishment of a high quality of life.

There is of course more to untangle here, and more details on specific strategies are needed. But the bottom line is an effective economic development strategy starts with making Wisconsin a place people want to live.


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