Let’s hope that Wisconsin Governor-elect Scott Walker changes his assumptions about job creation. Otherwise, his 250,000 new jobs goal will go down in history as yet another false campaign promise.
In a panel discussion at the Milwaukee Press Club Newsmaker Lunch in December, Walker listed his top two priorities as helping existing businesses grow and attracting businesses not in the state to come and add jobs to the state of Wisconsin. “If it’s not one of these two issues, it’s not a priority” he said. Years of economic development research show that fostering start-ups is far more important and more likely to succeed than trying to convince companies to move across borders to a state offering a better deal.
Additionally, capital is nowhere on the list of “the fundamental changes he plans” as reported in the Jan. 6, 2011, Biz Times Milwaukee cover story. Yet, the top issue existing businesses with the highest jobs-growth potential face is a lack of financial capital. In the Madison region, many high-potential growth companies sell out to larger companies owing to the lack of capital, only to see job growth curtailed if not jobs eliminated in our region.
Implicit in Walker’s speaking points is the assumption that the No. 1 issue facing job creation in Wisconsin is too many state government workers, with too high pension and benefit costs, being too unfriendly to business. While changes along these fronts are vitally important, especially given the state’s budget deficit, Walker’s likely Achilles heel is the paramount importance and singular focus he places on this issue over other root causes of Wisconsin’s job creation issues.
Indiana’s governor and legislature have done a stellar job of using state government to address many important social issues facing their state. They reduced expenditures in many areas in order to both balance the budget and increase investments in other areas that reduce long-term government costs, like early childcare.
Business leaders like Indiana Gov. Mitch Daniels, who spent eight years as an Eli Lilly senior executive, would call spending on prisons wasted dollars and spending on education investments in the future. Yet the former has crowded out the latter in our state. Businesses reduce waste in order to increase investment. Doing the same is not part of Walker’s Job #1 priorities.
Indeed The Business Roundtable, representing the most prestigious group of companies in our nation, makes a solid case that the role of government is not just to get out of the way. Yes, tax and regulatory policy are rightfully on the CEOs’ list of concerns. But Ivan Seidenberg, chairman of The Business Roundtable and chairman and CEO of Verizon, states his membership wants government to focus on capital formation, exports, infrastructure, education and innovation – as “they are the necessary inputs for creating growth and private-sector jobs.”
My New Year’s wish is for Walker to become more pragmatic and informed as Governor, and rethink his assumptions about where new jobs come from and government’s role in economic development. I want him to focus on drivers of job creation in the 21st century economy, not what worked in the 20th century economy. The insightful “Be Bold: The Wisconsin Prosperity Strategy” recommendations offer an excellent start. Otherwise the loss of jobs and $800 million from federal train stimulus spending will look like small change compared to losses ahead for Wisconsin.
Kay Plantes is an MIT-trained economist, business strategy consultant, columnist and author. She served as chief economist for former Wisconsin Republican Gov. Lee Dreyfus. Plantes provides expertise in business model innovation, strategic leadership and smart economic policies. She resides in Madison, Wis., and Oslo, Norway.
