The early sparring in the governor race between Scott Walker and Mary Burke has been over job creation, with each throwing out the best possible statistics for their time in office and each using the most negative statistics about the other’s job performance. It’s a fog of conflicting numbers.
We deserve better. We deserve a mature policy discussion by Gov. Walker and former Commerce Secretary Burke about what government can do to create jobs. The reality is that the private sector creates jobs, not government. All the government can do is to create a business environment that encourages companies to expand and entrepreneurs to launch new ventures.
Let’s have some straight talk about what public policies work and what don’t to create that environment and the realities any state faces on getting people back to work. Here some observations about that dialog:
• All states ride on how the national and global economies are performing. You can’t, for instance, subtract out the effects of the traumatic downturn of 2008 to 2009 on job numbers. Yet both candidates do so as they put forward their funny numbers.
• They are both talking about the right issue, and that’s a good thing. Without jobs, no anti-poverty, pro-prosperity public policy works very well. Job growth is the critical metric.
• Neither is talking about poaching from other states any more. Sure, we will welcome companies from other states that want to locate here, but recruiting is generally a loser strategy for Wisconsin and has been for 40 years.
• Subsidies for expansions of local companies makes sense, because we have to compete with other states that are still trying the poaching route. (Disclosure: my company got some job credits for a recent expansion.) The Wisconsin Economic Development Corporation has been very responsive to such requests.
• High-growth entrepreneurial ventures in our mature and emerging economic clusters drive job growth. Small companies also create jobs, but they depend on market-leading companies at the top of supply chins for their top lines. It is simply a political ploy for candidates to extol the virtues of small companies without that understanding. There are lots of small business people and they are voters.
• Entrepreneurs find daylight in the marketplace with innovation, so initiatives to pump up technology breakthroughs make long-term sense. Educators can also shine by turning out innovative graduates who can make a job as well as take a job.
• Real estate ventures don’t drive the economy; they depend on the health of the overall economy. Remember what happened to real estate in the 2008-2009 melt-down.
• The over all tax and regulatory climate of a state makes a difference. Business people want to be where they are wanted and where government policy is friendly, not punitive. The Walker Administration has made incremental progress on both fronts. It’s of note that neighboring Michigan, Iowa and Indiana have adopted right-to-work laws.
• Both parties extol workforce training and education programs, but job creation comes first and filling jobs with skilled people comes second, not the other way around. Businesses and education institutions can step up to fill skills gaps when the demand is there, and they do.
• Some GOP tacticians have tried to taint Burke with out-sourcing of jobs to Asia through her connection to her family’s company, Trek. They ought to know that companies have to survive and compete. Do they want U.S. companies not to be global players, to go down because their they didn’t lower their cost structures. The core of Trek’s employment base is still in Wisconsin. Thankfully, Richard Burke started his business here and grew it to a worldwide enterprise. We need lots more like him, and we need to take our chances that we will keep a good percentage of the jobs here.
The plain truth is that job growth remains slow in Wisconsin (and in the country), and that has been true for Democrats and Republicans. Wisconsin has been in a four-decade slide relative to other states. We need to reinvent our economy, which is what entrepreneurs do.
The main reason the unemployment rate has dipped is that the labor participation rate has also dipped – to 63% in the country. The boomers are retiring and people looking for work have become discouraged.
Slow job growth is better than no growth, but we can do better. The Burke-Walker debate could be a constructive. It isn’t just about throwing debatable numbers around that make one side look good and the other less so.