Wisconsin vs. China: The Economic War is On

Last week, the state of Wisconsin’s gift to Foxconn came one step closer to reality.  Wisconsin’s  state senate approved a $3 billion incentive package in return for Foxconn’s promise to build a liquid crystal display (LCD) factory in the Badger state.  If you recall, Foxconn created a feeding frenzy among state politicians who competed for the facility to be built in their respective states.  http://host.madison.com/wsj/news/local/govt-and-politics/foxconn-billion-incentive-deal-edges-closer-to-reality-with-state/article_8504babf-6993-5386-b3cc-11e9c5bfd851.html.  This facility will be Foxconn’s first in the United States.  Foxconn is headquartered in Taiwan and most of its facilities are in mainland China.

Wisconsin is the largest paper producing state in the U.S.  It is estimated there are over 15,000 jobs in paper mills in Wisconsin.  That number is down from over 20,000 ten years ago.  (See links below for more data.)  I know, the world is going digital and paper usage is down.  I also know China has built multiple paper mills.  The U.S. paper industry and U.S. politicians have accused the Chinese of subsidizing those mills.  Wisconsin is subsidizing Foxconn to move jobs, or at least potential jobs, from Asia (mostly China) to Wisconsin.  Does anyone else see the irony/hypocrisy/choose your expletive here?

We just elected a guy as President (with the help of the state of Wisconsin) who campaigned about China not playing “fair.”  Did Wisconsin play “fair” against other states and China to land the Foxconn jobs?  Do two wrongs make a right?  Only in politics.  Wisconsin’s politicians can brag about the jobs they supposedly created.  I’m pretty sure they won’t talk about the subsidy per job, which is estimated to be $230,000 to $1 million per job.  That money is coming from somewhere and someone.  Either someone’s taxes are going up or someone’s services will be cut to provide this money to Foxconn.

Would Wisconsin politicians have ever dreamt of giving the paper industry $3 billion in incentives to maintain 5,000 jobs?  Why is a job at Foxconn worth more to the state of Wisconsin than a job at a paper mill?  That’s essentially what Wisconsin politicians decided.

Certainly, there are benefits to being closer to customers for both the paper industry and Foxconn.

I’m all for job creation.  I don’t blame Foxconn for getting the most it could out of the state of Wisconsin.  They played the game our “capitalist” society created. I fear we are entering a new age of corporate welfare in the U.S.  Rather than create a level playing field, our politicians are going to pick and choose winners and losers through subsidies.  As Elon Musk has demonstrated, so-called green jobs and technology jobs are favored by our dear leaders.

Sources/Additional reading

http://archive.jsonline.com/news/opinion/paper-industry-still-strong-in-wisconsin-b9937711z1-212242941.html/

 

https://www.marketplace.org/2017/09/06/world/paper-mill-jobs-meant-comfortable-lifestyle-Wisconsin-before-globalization

 

http://mainemeetsworld.bangordailynews.com/2015/12/14/home/where-the-paper-industry-went/

 

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