The shiny object in front of lawmakers’ eyes when talking
about the Foxconn proposal is the potential of new jobs. “13,000 direct jobs! Another 22,000 indirect jobs!”
All of these claims ignore the reality in 2017 Wisconsin
faces. If the jobs do materialize, where will the workers come from?
The important statistic when considering the availability of
labor is the “prime working age” population, which economists classify as
people between 25 and 54 years old. Wisconsin had 105,000 fewer prime working
age people in 2015 than it did in 2010. Some of the sharpest decreases occurred
in Jefferson, Kenosha, Ozaukee, Racine, Walworth, Washington and Waukesha
counties. As the state with the 15th oldest population in the U.S., Wisconsin’s
prime working age population is expected to continue to shrink through 2040 to
just 33% of its total population. This
is down from 41% in 2010.
Looking at 2016 census estimates for Racine and Kenosha
counties, Racine lost 6,709 (8.3%) of its prime working age population in just
the past 6 years. Kenosha lost 2,998 (4.3%) since 2010. So the very region being counted on to fill
as many as 35,000 jobs has a smaller number of working aged people, and that
number is continuing to decrease.
Wisconsin’s current and future demographic challenge is not
new, but considerations for how the state will address this challenge and
manage the consequences do not seem to be at the forefront of the Governor’s
current decision-making.
In addition to the lost workforce due to the retirements of
baby boomers, more than 27,000 people left Wisconsin between 2010 and 2014,
according to a study from the Wisconsin Taxpayers Alliance (WISTAX). According
to Todd Berry, WISTAX president, Wisconsin lost people “at a faster rate than
we should, and this means not only are we not going to grow the workforce,
we’re going to see a shrinking workforce if we keep that up.”
If you build it, will they come?
Wisconsin is not alone in facing a labor shortage. Both
Illinois and Michigan face shrinking working age populations, while Minnesota
and Iowa expect small increases through 2040.
Nationwide, there are more than 1 million unfilled manufacturing jobs
and there is high demand for skilled labor.
Workers choose where they want to work. Advocates for Foxconn have referenced both
Silicon Valley and North Dakota’s oil boom as examples for Wisconsin’s
hopes. However, Silicon Valley succeeded
primarily because of the open immigration policies of the U.S. and the
importance the world’s best and brightest immigrants have played in the tech
business. Wisconsin share of foreign-born Wisconsin residents stood at 4.8% in
2015, well below the U.S. percentage of 13.5% for the same year. And the
average wage during the oil boom in 2012 in North Dakota for oil field workers
was $112,462, while entry level rig workers averaged about $66,000 a year,
according to Rigzone, an industry information provider and job website.
It remains unclear what the actual job range will be or what
the specific pay for those jobs at Foxconn will be beyond the unverified
average annual pay of $53,000. With a
significant labor shortage in Wisconsin and neighboring states, will that level
of compensation be enough to recruit as many as 13,000 people (not to mention
22,000 more) from around the U.S. to move to southeastern Wisconsin as our
existing working age resident population declines? It seems unlikely. The need to increase compensation will drive
up labor costs and result in a larger and faster push to automate the Foxconn
plant. The result? Far fewer jobs, and a much higher cost to the taxpayer.
Lawmakers should not let the shine blind this reality.
Rep. Gordon Hintz (D-Oshkosh) represents the 54th District
in the Wisconsin State Assembly and is a member of the Legislature’s
budget-writing Joint Committee on Finance.
What workers? They will hire service techs at around 30K to service the robot overlords.
ReplyDeleteHow we doin on the 250,000 jobs?
ReplyDeleteIs this part of it?
think this promise will match the success of the last one?