Like every other politician, Mary Burke, who has announced her candidacy for governor of Wisconsin in 2014 as a Democrat, talks about her chops in the arena of job creation.
Also, like many politicians, she has been very generic in her call for more jobs. It’s way early, but to date she has offered no specifics on how she would do it.
She has identified the major issue is Wisconsin. We have lagged for decades on job creation, and it has cost us dearly. Per capita income, perhaps the best measure of prosperity, lagged the nation by 5.1% in 2012.
That’s a gap of more than $2000 per person, $40,537 in Wisconsin vs. $42,693 for the U.S.
We are now a low wage state, about 35th, which may explain part of the rebound in manufacturing. Manufacturers no longer have to go south to find inexpensive labor. Nor do they have to worry much about powerful unions, since less than 10% of the private work force is unionized.
Burke will certainly target Gov. Walker’s shortfall on his goal of creating 250,000 jobs during his first term. He’s fair game on that score, despite having launched major initiatives to improve the state’s business climate.
Her track record on job creation during her two-plus years as Secretary of Commerce (DOC) in the Doyle Administration from 2005-2007 was anything but stunning. The lackluster pattern for job growth prevailed then, too.
Burke put out good energy, travelled the state and brought some charm into the cabinet job. She was born on third base as a daughter of the founder of Trek Bicycle Corp., one of the state’s finest entrepreneurial stories, and she has a Harvard MBA (that and a buck will get you a cup of coffee in the world of job creation). So, she knows a thing or two about business. She has a fine track record in the non-profit world.
That said, she came up short on the leadership dimension at DOC. Here are a few specifics where I was involved that bear on her report card at DOC:
• The Doyle Administration never had a strategy for the state’s economy. It had an uncollected list of economic development activities that lacked coherence. It touched a lot of bases and was politically oriented. In fairness, no GOP governor has adopted a clear development strategy either.
• Her depar
tment lacked coherence, as was pointed out in an audit of the department. It had a blizzard of functions that lacked a strategic impact. The Walker Administration has tried to fix that by replacing the department with a public-private corporation (WEDC), with mixed results. (Disclosure: my company received some tax credits for a major expansion of our manufacturing operations.
• Burke’s was personally involved in the effort to retain the Gehl Company’s headquarters and R&D function in West Bend. She turned off the company’s executives, and economic development professionals had to do extensive damage control to retain the company. An extensive subsidy package accomplished that end.
• Burke pulled the plug on the seed money for a five-university consortium in Southeastern Wisconsin called TechStar. That effort had produced more than a dozen start-up companies out of university intellectual property between 2000 and 2006. She refused to continue DOC runway funds, and it shut down. One of the startups, Prodesse, made a successful exit in 2009 at more than $70 million, which alone more than paid back the universities and others for their investments in TechStar. In short, she showed little appreciation for commercializing academic R&D to reinvent the Wisconsin economy. She acted more like an auditor than a leader.
Burke will have several advantages as she runs for her party’s nomination. She can fund her own campaign, much like Herb Kohl, Ron Johnson, Jim Sensenbrenner and Tom Petri. Friends of Trek will help.
She’s a woman, and that will appeal to gender-driven voters who would like to elect the state’s first female governor.
She will benefit from the intense opposition to Scott Walker on the left. The pubic unions who put all their chips on the table in 2012 to recall Gov. Walker, and failed, will put whatever chips they have left into defeating him in 2014. Their resources have been cut severely because of union membership erosion as direct result of Walker’s Act 10, but national unions will put up millions for the Democrat in the general election.
Walker will draw millions from businesses and right-of-center donors, so funding could be a draw.
On jobs, Walker will be able to point to strategic initiatives, such as:
• Phasing out the state corporate income tax on agri-business and manufacturing, even as the percentage of manufacturing jobs has rebounded to 16.3% of all state jobs in 2012.
• Help for entrepreneurs through the passage of a small $25 million venture capital bill and expansion of the Act 255 investment credits for startups.
• Greatly improved state fiscal health and small tax cuts in his first term.
• A serious effort to root out excessive and unnecessary regulation.
Burke will need to move from the generic to the specific to match those initiatives on job creation. She needs to define her message.
State government, in reality, has limited impact on business and job creation, but a government impact at the margins is still important for the future prosperity of the state’s citizens.