Tuesday, October 13, 2009

Walker's budget is a job killer

Milwaukee County Executive Scott Walker’s proposal to create a Department of Business Development is an empty, political gesture. It won’t help the area’s unemployed or promote economic growth. But it will spend almost half a million dollars creating a new government bureaucracy.

Taxpayers need to ask do we really need another economic development bureaucracy?

Metropolitan Milwaukee already has several public and private agencies devoted to business development and job creation including the M7, the highly publicized public private partnership devoted to regional economic development, Milwaukee’s 200 person Department of City Development, and similar shops in West Allis and Wauwatosa. Most other communities like Cudahy, Greenfield and Franklin have economic development directors, teams or commissions devoted to business development.

And this list does not include the many state agencies, the Department of Commerce, the Department of Workforce Development and Forward Wisconsin, for example, devoted to the same effort. . Only three years ago the Great Milwaukee Committee criticized “the astonishing” duplication of services between the county and its municipalities. This proposal only exacerbates the problem.

The fanfare surrounding Walker’s proposal, including a Milwaukee Journal Sentinel editorial and an opinion piece by County Supervisor Joe Rice, is reminiscent of the hoopla that accompanied the Greater Milwaukee Committee’s Initiative for a Competitive Inner City (ICIC).

ICIC proponents, just like Walker and Rice today, alleged that labor market policies and non-profit organizations had distorted the labor market and impeded business development. They argued we should abandon these well-meaning, but misguided efforts, and let market forces drive revitalization, ignoring that it was unfettered market forces that had caused Milwaukee’s deindustrialization and nationally high rates of unemployment and poverty. In the end, the only real job that ICIC created was for the Harvard consultant, Michael E. Porter, who was extremely well compensated for designing the project.

Rice asserts that the County's Park East Redevelopment Compact (PERC), which he and Walker opposed, is responsible for the lack of development in the corridor. He conveniently ignores that no one is building because we are mired in the worst recession since the Great Depression, the nation's credit markets virtually collapsed more than a year ago and the downtown condo market is saturated, burdened with extremely high vacancy rates.

What Rice and Walker mischaracterize as obstacles are carefully crafted standards that require local hiring, wage standards and state of the art, energy efficient (cost saving) construction. Local governments have a responsibility to the taxpayers to establish such standards particularly for developers who are receiving millions in tax benefits and public subsidies. In the private sector it is called a return on investment.

Lest we forget, Milwaukee County had a Department of Economic Development that Walker eliminated in a cost cutting move a year ago.

What has changed in the last twelve months to justify resurrecting a half million dollar bureaucracy? The only difference between the department Walker eliminated the one he envisions is that the new employees will be appointed by Walker without the County Board’s consent. The lack of checks and balances virtually guarantees the appointment of cronies who could use the new agency to undermine the Park East Corridor's development standards.

While Walker talks about job development, his actual budget is a job killer. It will eliminate another 400 middle class jobs in Milwaukee County (7% of the County’s employees) and slash the wages and benefits of those who continue to serve the County as airport firefighters, information management specialists, and park maintenance workers.

Rather than create another bureaucracy devoted to costly pursuit of jobs, Walker should devote himself to preserving real and existing middle class jobs. These jobs pay real Milwaukee County residents modest, but family supporting wages that they spend in the local economy stimulating additional hiring and business development. Cutting these middle class workers’ wages by between by $6800 and $8400 annually will force many into poverty, demoralize the County’s workforce, undermine productivity, and reduce aggregate demand in a local economy that is mired in a deep and prolonged recession. If Walker is really committed to having market forces drive local economic development he should not pursue an agenda that undermines the consumer market (aggregate demand) for goods and services.

Walker’s proposal is the most cynical type of political grandstanding. While eliminating hundreds of real jobs, the only jobs Walker’s proposal will create are for the cronies he will almost certainly hire to staff his new agency.

The County Board should reject this proposal for the political grandstanding gesture than it is.


Anonymous said...

your final comment is what is really going on...

grandstanding by someone who is eliminating some jobs to provide work to who he wants to hire....

capper said...

You're concern for Walker's cronyism is too late. When the County did have an economic development director, the last two were Walker campaign staffers.