Home > Uncategorized > Wisconsin Can’t Find Money for Schools… but CAN Find $3,000,000,000 for Corporate Welfare

Wisconsin Can’t Find Money for Schools… but CAN Find $3,000,000,000 for Corporate Welfare

Naked Capitalism last week included a link to an Ars Technica article by Joe Mullin describing a a bill passed by the Wisconsin legislature that will provide $3,000,000,000 to help underwrite the costs of a FoxConn factory that will employ 3,000 workers. But there’s a fundamental math problem at play here:

Democratic opponents of the deal have pointed out that paying $3 billion to get 3,000 jobs means the state subsidy amounts to around $1 million per job.

That’s $66,600 per employee for each of the next 15 years, according to an analysis by Prof. Michael Hicks, an economics professor at Ball State University who opposes the deal. Foxconn will pay the workers an average of just over $53,000 per year. (Those numbers are based on the initial count of 3,000 workers.)

“Voters might wish to ask just why each Wisconsin household is stuck with a nearly $1,200 bill to subsidize a company that is half as productive as Wal-Mart, and one-tenth as productive as Harley-Davidson,” writes Hicks in an op-ed for MarketWatch. “It is an over-the-top bad deal for Wisconsin.”

However, the full $3 billion in incentives only becomes available if Foxconn ends up creating 13,000 jobs. But there’s no ironclad guarantee in the deal that Foxconn even meets its 3,000 job promise, so the opponents’ “$1 million per job” argument could be true if the factory only ends up employing 1,500 people or fewer.

Even if the plant never expands beyond 3,000 jobs, though, Foxconn will get $1.35 billion for building the plant. Assuming even the beginning stages of the deal come together, Wisconsin will be paying $500,000 worth of incentives per job.

This corporate welfare scam is especially egregious in Wisconsin, where K-12 per pupil spending has declined in absolute terms over the past several years (see here, and here) and the Republican legislature has shredded the safety net protecting children raised in poverty and enacted a voter ID law that required an education component that hasn’t been funded because, presumably, the budget is too tight. The voters in Wisconsin have voted in the likes of Governor Scott Walker and his enabling legislators year after year and now find themselves with an infrastructure so weak that they effectively need to bribe a corporation to locate in the State. Too bad the voters won’t get the information they need on how to comply with the GOPs voter ID law… because if they DID get to the polls they might now see a good reason for voting them out of office.

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