Reviewing the Foxconn Costs and Risks (without the Rose-colored Glasses)

Wednesday, August 2, 2017 at 5:31 PM by

Different Assumptions about Foxconn Job Creation Yield Much Higher Estimates of the Cost of Jobs

The cost of the proposed new tax credits for the tentative deal with Foxconn could be far larger per job created than some people have suggested. Those costs will vary greatly depending on the ratio of spending for payroll versus the capital expenditures.

The more that Foxconn invests in its facilities and state-of-the-art automation, rather than payroll, the more the proposed deal will cost state taxpayers per job created. A new Wisconsin Budget Project report examines the potential tax credit costs based on four scenarios that make different assumptions about the number of new jobs, the duration of the project, and the amount of Foxconn spending for capital improvements. Read more

Strong Income Gains in 2015, but Hold the Champagne

Thursday, September 15, 2016 at 5:12 PM by

Poverty Remains Well above Pre-recession Level, and Extreme Disparities Continue

In many respects, the national and Wisconsin data released today by the Census Bureau is much better than I dared hope for, but that doesn’t mean I’ll be popping any champagne corks today. A closer analysis of the data reveals that most Wisconsinites are still making less than they did before the Great Recession, and our state continues to have extreme economic disparities based on race. Read more

Categories: Blog, economy, income, poverty | Comments Off on Strong Income Gains in 2015, but Hold the Champagne

Uneven Progress for Wisconsin Workers

Monday, September 5, 2016 at 8:26 PM by

The latest annual State of Working Wisconsin report has some positive findings about recent trends for Wisconsin workers; however, it also shines a light on some ongoing challenges, and it concludes that Wisconsinites “all need stronger policy to support broadly shared prosperity.”

COWS (formerly known as the Center on Wisconsin Strategy) issues this report every Labor Day weekend. Because it’s an illuminating report, and Labor Day is an important holiday, I want to share the major findings – while minimizing my own labor this weekend. In that spirit, I am passing along several excerpts from the COWS press release.

On the plus side of the ledger, the report describes the positive effects in Wisconsin of the national economy’s gradual rebound from the Great Recession:

“The state has more jobs than ever before, unemployment rates have fallen to pre-recession levels, and workers that want full-time work are having an easier time finding it.

Read more
Categories: Blog, economy, income inequality, jobs, Racial & ethnic disparities | Comments Off on Uneven Progress for Wisconsin Workers

Wisconsin’s Electorate and Economy: What the National Media Should Know

Tuesday, March 29, 2016 at 10:28 AM by

National attention has turned to Wisconsin because our presidential primary on April 5th is the only one in the next week. It’s also a significant primary because the percentage turnout is likely to be higher than in any other state since the New Hampshire primary.

For reporters and others who are trying to understand some of the demographic, economic and political context for the April 5th election, we’ve pulled together a variety of facts about Wisconsin and how it compares to other states.  Here are a few highlights from that data: Read more

Categories: economy, EDUCATION, income, income inequality, jobs | Comments Off on Wisconsin’s Electorate and Economy: What the National Media Should Know

The State of Working Wisconsin 2015

Monday, September 7, 2015 at 9:00 AM by

A new report issued in conjunction with the Labor Day weekend by COWS provides a thorough examination of Wisconsin job numbers, wages, poverty, and job quality, and it provides a sobering assessment of how working people in Wisconsin are doing:

Wisconsin faces slow growth, extreme racial disparity in unemployment, long-term stagnation in wages, and one-fourth of workers struggling in poverty-wage jobs.” 

The new COWS report – The State of Working Wisconsin 2015 – illustrates that as the national economy has gradually rebounded following the Great Recession, Wisconsin’s job growth has lagged behind.  COWS’ analysis concludes that “if Wisconsin had enjoyed the same rate of job growth as the rest of the nation across the course of the recovery, the state would have 90,000 more jobs today.”  The national growth rate from January 2011 through June of this year was 60% faster than the job growth Wisconsin experienced during that time..  Read more

Categories: Blog, economy, income, jobs, poverty | Comments Off on The State of Working Wisconsin 2015

The “Cheaper to Keep Them” Argument Uses Flawed Assumptions

Monday, July 6, 2015 at 8:03 PM by

The Governor’s Math Uses the Wrong Numbers and Wrong Question

As the legislature nears a vote this week on using taxpayer dollars to help build a new Bucks arena, the Governor’s primary argument for subsidizing the Bucks continues to be the contention that it’s “cheaper to keep them.” That isn’t exactly an uplifting slogan, but it seems to be the strongest argument the Governor can muster. With that in mind, let’s review the arguments about the cost-effectiveness of public subsidies for the proposed arena.

There have been a number of excellent columns, blog posts and other commentaries about the arena issue. Among those, my favorite is a critique of the “cheaper to keep them” argument by Republican Representative Dean Knudson.

In a guest column he wrote in mid-June, Knudson skewers each of the three major points that the Governor and others have made to support the argument that the proposed public subsidies will be less expensive than the costs to be incurred if the Bucks leave Milwaukee: Read more

Categories: 2015-17 biennial budget, Blog, economy | Comments Off on The “Cheaper to Keep Them” Argument Uses Flawed Assumptions

Tax Cuts Haven’t Boosted Wisconsin Economy

Tuesday, June 16, 2015 at 11:39 AM by

Wisconsin lawmakers on the legislature’s budget committee will probably meet this week to make decisions about a proposed income tax cut for high earners and other changes to Wisconsin’s tax system, among other issues. They should keep in mind that new evidence shows that no state that passed large income tax cuts in recent years has seen its economy grow faster than the national average. Read more

Categories: Blog, economy, JOBS & THE ECONOMY, STATE TAXES | Comments Off on Tax Cuts Haven’t Boosted Wisconsin Economy

“Right to Work” Bill Would Suppress Wisconsin’s Already Anemic Wages

Monday, February 23, 2015 at 7:32 PM by

Though researchers disagree on the effects of “right to work” legislation on the number of jobs, what is quite clear is that such laws suppress wages.  Now that legislative leaders have suddenly put a so-called “right to work” (RTW) bill on a very fast track, I hope legislators will take a careful look at a couple of recent studies that examine the economic effects and warn against following the path of the states that have approved RTW laws

A recent report by Dr. Abdur Chowdhury, who teaches economics at Marquette, reached the following conclusion about the effects on Wisconsin income and state taxes:  

The potential net loss in direct income to Wisconsin workers and their families due to a RTW legislation is between $3.89 and $4.82 billion annually. Using a conservative estimate of an impact multiplier of 1.5, the total direct and induced loss of a RTW legislation is estimated between $5.84 and $7.23 billion annually. Read more

Categories: Blog, economy, income, jobs, JOBS & THE ECONOMY | Comments Off on “Right to Work” Bill Would Suppress Wisconsin’s Already Anemic Wages

Wisconsin’s Slow Economic Recovery Leaves Many Behind

Thursday, September 18, 2014 at 3:22 PM by
Wisconsin's gradual economic recovery still hasn't substantially expanded economic opportunity for working people and families. Median incomes are still well below their pre-recession level, and our state’s elevated poverty levels have yet to begin declining.
Categories: Blog, economy, EITC, poverty | Comments Off on Wisconsin’s Slow Economic Recovery Leaves Many Behind

Standard and Poor’s Says Inequality Suppresses Economic Growth and State Revenue

Monday, September 15, 2014 at 6:22 PM by

Concerns about increases in income inequality were voiced from a surprising perspective today, when Standard and Poor’s (the bond rating agency) issued a lengthy report titled “Income Inequality Weighs On State Tax Revenues.”  The report concludes that “disparity is contributing to weaker tax revenue growth by weakening the rate of overall economic expansion.” 

The authors offer this explanation for the correlation between income disparities and economic growth:

“…rising income inequality is a macroeconomic factor that acts as a drag on growth. There is evidence, although not conclusive at this point, that the higher savings rates of those with high incomes causes aggregate consumer spending to suffer. And since one person’s spending is another person’s income, the result is slower overall personal income growth despite continued strong income gains at the top.” 

An article in today’s Washington Post sums up the findings in clearer terms:

Even as income has accelerated for the affluent, it has barely kept pace with inflation for most other people. Read more

Categories: Blog, economy, income inequality, income taxes, sales tax, STATE TAXES, taxes | Comments Off on Standard and Poor’s Says Inequality Suppresses Economic Growth and State Revenue