• WisBusiness

WisBusiness: Jobs Claims Populate Guv's Race Rhetoric
10/25/2006

By Brian Clark
WisBusiness.com

The campaign for guv has seen competing claims about Wisconsin's job picture and who would do better in luring jobs to Wisconsin.

Doyle says the stats back up his case that he's building the state's economy. Green says Doyle has failed to capitalize on big opportunities and claims he'd be more like the state's best known cheerleader, former GOP Gov. Tommy Thompson.

The debate has been playing out before chambers of commerce and business groups where the two have appeared and -- of course -- in the TV ads.

Who's right?

Each side has its ammo. But some analysts say the state's job picture -- while not robust -- isn't all that bad.

"Wisconsin has had steady, manageable employment growth," said Eric Grosso, who is the state's state labor economist - a nonpartisan post.

"We've had good gains in the number of employed residents and jobs - everything from manufacturing to health services to professional and business services to construction," he said. "We are continuing to see growth and that's encouraging."

Samuel Kahan, a senior economist the Federal Reserve Bank in Chicago, said Wisconsin has done "pretty good" compared to the rest of the Midwest and the United States as a whole.

"I think Wisconsin's economy is better balanced than other states -- take Michigan for example," he said. "You're not just a one-tune band, and that is fortunate."

Kahan said the Badger State's economy is diversified, with strengths in financial services and insurance. It also continues to have a large number of workers involved in manufacturing, though that sector is undergoing major changes.

"Low-paid, low-skilled factory jobs will keep disappearing, so the state needs to keep moving toward advanced manufacturing, which is where there have been considerable productivity gains and where the future lies," he said.

"That means having a flexible, educated workforce," he said. "It also means that whoever is governor has to work to have the infrastructure in place to push the economy along - with everything from schools to roads to tax policy."

Tom Still, president of the Wisconsin Technology Council and the former editorial page editor of the Wisconsin State Journal, says, "The simple truth is that Wisconsin's economy is in transition and the same thing is happening across the nation. But what the job figures show is that Wisconsin is doing as good or even better job than most of our neighbors in making that transition.''

Though the state now has fewer manufacturers, Still said they are now smarter, leaner and better-equipped.

"We have a 'churning' economy that continues to drop jobs at the bottom, but is adding more jobs at the top," he said.

"Technically, when one candidate says we are losing jobs and the other says we are gaining, they are both technically correct," he said.

"But the important thing is the net gain, and in that sense, Wisconsin is doing pretty well," he said.

But Still said the state cannot rest on its laurels.

"Is there room for improvement, absolutely," he said.

"We still lag in per capita income," he said. "This isn't just about creating more jobs, but better jobs. I'd rather have 5,000 jobs that pay $70,000 each than 10,000 that pay $25,000 each."

He also said the tax climate could be improved and regulations could be eased to promote more business.

**The statistics and how they're debated

Doyle is telling people over and over that the state since he took office has had a net gain of more than 177,000 jobs.

That's a 6.6 percent growth rate for non-farm employment since January of 2003, according to unadjusted figures from the federal Bureau of Labor Statistics (BLS). It is well above the U.S figure of 5.6 percent during the same period, when 7.6 million jobs were created.

And it puts Wisconsin at the top of surrounding Midwestern states. In terms of percentage gain, the Badger State is slightly ahead of Minnesota, which gained 181,100 since January of 2003, according to the BLS.

Neighboring Iowa added 86,700 net positions, for an increase of 5.8 percent. To the south, Illinois added 257,900 jobs, for a gain of 4.3 percent. The picture was bleaker in Michigan, which has suffered from auto slump, has lost 12,400 jobs since January of 2003.

The Green campaign does not outright dispute the BLS numbers, but a spokesman calls them ``counter-intuitive'' given announcements like last week that will mean the closing of two northern factories and the lay off nearly 200 workers.

**Green claims Doyle AWOL on big jobs recruitment

The Green camp says Doyle is not doing enough attract companies to the state or create new jobs. Green, meanwhile, is using recent news about Honda, Menards and Harley to paint Doyle as anti-business -- a charge disputed by Doyle appointees.

Green recently criticized Doyle for failing to push the DNR to let Menard's build a huge warehouse on a wetland outside Eau Claire. The factory, which would have created 800 new jobs, will go to either Iowa or Ohio.

In a campaign ad focusing on Menard's, Green said Doyle "stood in the way," suggesting he could have done more to keep the 800 Menard's jobs in Wisconsin.

But John Menard, CEO of the giant home improvement chain, didn't see it quite so starkly.

In a statement issued after the decision to build out-of-state was announced, he said, "Gov. Doyle has worked very well with Menards and myself over the years, helping us grow in Wisconsin."

And the governor's office spokesman Matt Canter accused Green of "double speak."

"The law covering wetlands has been on the books since before Jim Doyle became governor and they know that," he said, while acknowledging that Menard's was frustrated with the DNR.

"Gov. Doyle went up there and personally met with John Menard to make that project happen, but he couldn't change the law," he said.

In addition, the Green campaign is also blaming the Doyle administration for a decision by Harley Davidson this week to build a 200-employee factory outside the state.

**Doyle's Commerce secretary responds

But Mary Burke, Doyle's Commerce Department secretary, said it is not fair to blame the governor for the Harley decision. The motorcycle maker's announcement followed a vote by the United Steelworkers Union rejecting lower wages for new hires and increased healthcare payments.

Burke said the effort to get Harley to build in Wisconsin is not over.

"In our conversations with Harley, they were very positive about our incentives to get them to expand here," she said. "Since the vote, we have been in touch and we welcome the opportunity to talk more about what we can do to make it happen here.

"To suggest that we have not been fully involved in this process is not accurate," she said.

Burke also said it is an oversimplification to say that the Doyle administration only wants to expand companies that now exist in Wisconsin.

"We got Bemis to move its corporate headquarters into this state from Minneapolis," she said. The manufacturer has 3,400 employees and 11 plants around Wisconsin.

"We also have been very active in trying to get Abbott Labs to build in southeast Wisconsin," she added.

Earlier this year, Abbott - a global pharmaceutical company with its headquarters in suburban Chicago - purchased 500 acres of I-94 in Pleasant Prairie, just north of the Illinois border. The Doyle administration, which says an Abbott complex would bring thousands of high-paying jobs to Wisconsin, is working on a financing package for the company.

"We want well-diversified growth from the inside and outside," Burke said. "We've got the right infrastructure in place, we're moving forward and the numbers back that up."

Green also rapped Doyle for not doing enough to encourage Honda to build a $550 million, 2,000-job factory in Wisconsin.

But the Doyle administration said Wisconsin was "never on the radar" for the Honda plant because the automaker wanted to build within several hours its engine plant in western Ohio. Ultimately, the plant went to Indiana.

Though Green acknowledged he might not have been able to lure Honda here, he said he would have at least made the call.

"When the governor of the state of Wisconsin doesn't even pick up the phone, that is a problem," he said in a statement.

In addition, Green has proposed a bevy of tax, regulatory and litigation reforms that include establishing a jobs hotline in the governor's office.

"The top age group leaving Wisconsin are 20 to 29 year-olds. Families are being torn apart because we aren't keeping up," said Green said.

Green said Wisconsin continues to have one of the highest tax burdens in the country, wages 3 percent below the national average, and inefficient and ineffective economic development programs.

**Unemployment figures up slightly

The latest state Department of Workforce Development unemployment figures show that Wisconsin's rate rose slightly to 4.1 percent in September, up from 4.0 percent for the same month last year.

The rate for the country in September was 4.4 percent. The numbers also revealed that the Badger State added 23,200 jobs in the past 12 months and gained 2,600 jobs from August.

Regional unemployment figures from the federal Bureau of Labor Statistics showed Minnesota with an unemployment rate of 3.8 percent; Iowa, 3.4 percent; Illinois, 4.4 percent; and Michigan, 7.1 percent.

**Milwaukee region

Green has also focused on Milwaukee-area employment growth - or lack of it - to criticize Doyle.

Citing preliminary BLS figures, Green said in speeches earlier this year that the Milwaukee region lost 8,800 jobs between April 2005 and April 2006. Green said only hurricane-ravaged cities of New Orleans and Biloxi, Miss had fared worse.

The BLS later reduced that figure to a 5,000 job loss. And Grasso, the state economist, said those figures may be revised even lower in the months to come.

Since then, state figures show that total non-farm employment in for the Milwaukee area - which includes Milwaukee, Washington, Ozaukee and Waukesha counties - has gained 4,400 jobs from September 2005 to September 2006.

In addition, the Doyle campaign is quick to note, the Milwaukee regional employment has grown by more than 21,000 jobs since the governor took office in January of 2003. During that period, employment in the Milwaukee area has risen from 820,000 to 841,600, according to DWD figures.

**Competing plans outlined

Green said that as governor he would be "Wisconsin's Chief Jobs Officer" and establish a jobs hotline in the governor's office. In addition, Green would replace the current Department of Commerce with a public-private Wisconsin Economic Development Corporation led by a non-partisan 12-member board of directors, which Green would chair.(See http://www.votemarkgreen.com)

In a statement released on Thursday, Doyle said he has helped make Wisconsin more business-friendly. "Four years ago there were not enough jobs for Wisconsin workers," he said. "Today, we are ensuring that Wisconsin workers are well-trained for the high-tech jobs of the future.''

Doyle also took credit for balancing two budgets, eliminating a $3.2 billion deficit, increasing exports by 52 percent, streamlining regulatory agencies and cutting taxes for middle-class families by more than $600 million.

In addition, he said 784 companies had either expanded here or moved to Wisconsin during his tenure.

Doyle frequently boasts of the new jobs created during his administration, but he also acknowledges that the effort "isn't finished yet."

Canter, Doyle's office spokesman, said the governor sympathizes with workers who have lost their jobs when factories closed.

"But we have had a net gain of about 8,800 manufacturing jobs in Wisconsin," he said. "No other Midwestern state can make that claim.

"We want to have added worker training to attract more advanced manufacturing," he said. "We don't want to be in a race to the bottom because we will lose that battle with China. We want to be in a race to the top."

In his recent "Jobs for the Future" initiative, (see http://www.wisgov.state.wi.us/docview.asp?docid=9687), Doyle said the program would train 36,000 people and invest in manufacturing and high-tech industries. The $2 million plan also calls for continued investment in stem cell research and renewable energy, plus raising high school graduation standards.

Doyle's campaign also charges that Green has repeatedly voted against raising the minimum wage in Congress and the state Assembly, and voted for billions in tax breaks to corporations that have outsourced jobs overseas.

Tom Still, president of the Wisconsin Technology Council, said he is not surprised by the political rhetoric wrapped around the state employment discussion. After all, the election is less than three weeks away, he noted.

But while Still says there is room for improvement, he credits Doyle for working to improve the business climate in the state.

"He came in at a tough time," Still said. "He worked with Republicans in the Legislature to improve the investment climate with Act 255, streamlined regulations and made some other good changes with taxes."

Still said he wished Doyle had done more to cut taxes and worked on tort reform.

"But history tells us that those are the kinds of things that get done in a governor's second term," he said.

As for Green, Still said he has a record of being a friend of business while serving in Congress and encouraging innovation.

"It's hard to say how that would translate to the state scene," he said.

Still said he is also concerned about how much conservative Republicans might push Green to outlaw research on human embryonic stem cells - if he is elected governor. Green has backed President Bush's limits on federal funding for human embryonic stem cell research.

Some UW-Madison professors who work in the university's stem cell programs have said they would go to other states if their work were restricted.

"I don't think stem cells are high on Green's agenda, though they may be on some legislators'," Still said.

"When Green said he wanted to spend $25 million on stem cell research that saves the embryo, the message I read between the lines is that he is not looking to chase scientists out of the state and would devote resources to a promising industry," he said.

All in all, Still said considers both Doyle and Green both pro-growth advocates who want to increase employment in the state.

"How they would go about it would differ," he said. "But I think they both want more jobs here."

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