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Wisconsin’s “Smoking Gun Of The Rigged Economy”

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dave.johnson “Outsourcing is the smoking gun of the rigged economy.”
— Robert Kraig, Executive Director of Citizen Action of Wisconsin.

Companies extort tax breaks and subsidies by threatening to withhold jobs. After their demands are met, they instead outsource the promised jobs. For the workers who remain, the threat of outsourcing causes their wages to fall. As Donald Trump said, if companies outsource jobs to places where workers make less, then “… you’ll come back … because those guys are going to want their jobs back even if it is less.”

But lately people have been figuring out ways to start doing something about these kinds of things. People are organizing to build power, making noise that the public and elected officials can hear and making clear demands that force politicians answer the question, “Whose side are you on?”

Wisconsin’s Privatized Economic Development Corporation (WEDC)

One group organizing people and forcing public officials to declare whose side they are on is Citizen Action of Wisconsin, a People’s Action affiliate. They are an “issue focused coalition of individuals and organizations committed to achieving social, economic, and environmental justice.” Citizen Action of Wisconsin is taking on the Republican Scott Walker administration over their privatization and use of the state’s “jobs agency” Wisconsin Economic Development Corporation (WEDC) to subsidize corporations even as they move jobs out of the state.

In 2014, Mary Bottari of the Center for Media and Democracy’s PRWatch laid out the background in Madison’s The Cap Times, in “Only 5,840 ‘actual’ jobs from Walker’s WEDC”:

… In July 2011, WEDC was launched “with the mission of elevating Wisconsin’s economy to be the best in the world.” The quasi-public agency is run by a 15-person board chaired by the governor.

The agency was soon caught up in controversy. In July 2012, allegations of bid-rigging forced it to cancel a planned award to an information systems company. In October the Milwaukee Journal Sentinel reported WEDC had lost track of some $8 million in funds. In May, WEDC was slammed by the federal Department of Housing and Urban Development for misappropriating $10 million in federal funds.

In May 2013, the Wisconsin Legislative Audit Bureau found that WEDC had awarded a portion of these grants, loans and tax credits to ineligible recipients, for ineligible projects and for amounts that exceeded specified limits.

WEDC controls an extraordinary amount of taxpayer funds. In fiscal year 2011-12 alone, Walker’s WEDC administered “30 economic development programs through which it authorized local governments to issue $346.4 million in bonds, awarded $41.3 million in grants and $20.5 million in loans, and provided $110.8 million in tax credits to businesses and individuals,” says the audit bureau.

With all that taxpayer money, how many actual jobs have been created?

The answer, in 2014, was, “Two official state data sets indicate that for every verifiable job Walker’s WEDC managed to create, the state lost more than two to plant closings and layoffs.” Then 2015 audit found that the problems had only gotten worse.

Citizen Action of Wisconsin Takes On WEDC

In July of this year Citizen Action of Wisconsin announced what they found from an open records request of the privatized agency. In “WEDC Safeguards Against Outsourcing Completely Nonexistent”:

In response to a series of outsourcing scandals Governor Walker’s troubled jobs agency, the Wisconsin Economic Development Corporation (WEDC), adopted in 2014 a 30 day advanced notification policy. This policy is supposed to give state policymakers early warning if a corporation receiving state economic dollars plans to outsource jobs or downsize more jobs than they are paid to create.

An open records request by Citizen Action of Wisconsin found that despite a series of additional incidents of WEDC funded corporations outsourcing Wisconsin jobs, there are zero 30 day notifications in WEDC’s files.

They followed up in August, in, “At Least 11,331 Wisconsin Jobs Outsourced Overseas Over the Last Five Years,” which explains how “Governor Walker and Senator Johnson have aided and abetted multinational corporations in selling out Wisconsin workers for short-term profits.”

Data kept by the U.S. Department of Labor shows that at least 11,331 Wisconsin workers have had their jobs outsourced to other countries since Governor Walker’s scandal ridden jobs agency, the Wisconsin Economic Development Corporation (WEDC), was launched July 1, 2011. This is a very low-end estimate of the impact of outsourcing in Wisconsin because it only accounts for groups of workers who successfully applied for Trade Adjustment Assistance from the federal government by proving their jobs were eliminated because of global trade agreements. It does not account for outsourcing to other states, or downsizing where it is not possible to prove the jobs landed in a foreign country or were impacted by global trade deals.

Both Governor Scott Walker and U.S. Senator Ron Johnson have consistently supported a rigged economic system which allows multinational corporations to pit Wisconsin workers against low-wage foreign workers.

Also in August, a Wisconsin Public Radio report, “Citizen Action Of Wisconsin Claims WEDC Misrepresented Jobs Created In Sherman Park,” found that the agency was reporting success in creating 500 jobs in the very neighborhood where lack of opportunity contributed to two nights of disorder following the police shooting of Sylville K. Smith.

Citizen Action of Wisconsin reviewed a database on the Wisconsin Economic Development Corporation website and found the agency reported supporting and investing in the creation of 483 jobs in Sherman Park located on the city’s north side. When the nonprofit researched the companies adding those jobs, it found the companies to be located outside Milwaukee.

Summary: Republicans privatized the state economic development agency, awarded subsidies to companies that included campaign donors, stripped safeguards, and “lost track” of where millions of taxpayer dollars went. Meanwhile, companies receiving subsidies intended to create jobs in Wisconsin were actually shipping jobs out of the state and country, as part of an effort to pit state workers against low-wage workers and force down wages. WEDC aided that effort by misrepresenting the jobs numbers, and even reporting nonexistent job-creation.

Outsourced Wisconsin Tour

In response Citizen Action of Wisconsin has launched what they call the “Outsourced Wisconsin Tour” to “focus attention on corporate outsourcers who are taking public job creation dollars.”

The announcement, “Outsourced Wisconsin Tour Launched” explains:

Following last week’s revelation that over 11,000 Wisconsin jobs have been outsourced in the past five years, advocates for good jobs launched a statewide tour on Thursday of corporations who are outsourcing while taking public job creation dollars.

The first company on the tour is the Rexnord Corporation in Milwaukee:

At a news event today community leaders detailed how Rexnord outsourced Wisconsin jobs at the same time it took millions in public job creation dollars from Governor Walker’s scandal plagued Wisconsin Economic Development Corporation (WEDC).

[. . .] According to data from the U.S. Department of Labor and WEDC, Rexnord has actually outsourced more jobs than it has been paid with public dollars to create. The company has received $2.75 million in WEDC funds, but has so far outsourced 130 more jobs than it is has created.

“The Smoking Gun Of The Rigged Economy”

Robert Kraig, Executive Director of Citizen Action of Wisconsin explained the reason for the tour.

“Outsourcing is the smoking gun of the rigged economy. It would stun most Wisconsin workers to learn that state leaders are aiding and abetting economic treason by giving public dollars to corporations who are outsourcing more jobs than they create. It’s long overdue for federal and state government to side with workers by using it leverage to build an economy where everyone who wants a good job can get one.”

You can join their effort to end outsourcing, and say, “Enough!”

Click here: 11,331 WI jobs Gone Overseas in Last 5 Years – Tell Madison: Enough!

“With so many Wisconsin workers struggling to find family supporting jobs, our state and federal governments ought to be focused on creating an economy where everyone who wants a good job can get one. Shamefully, elected leaders who are supposed to work for us often aid and abet corporate outsourcers, helping them rig the economy against average people. They vote for trade deals which make it easier for multinational corporations to ship more of our good jobs overseas. In Wisconsin Scott Walker gives huge subsidies and tax giveaways to unpatriotic CEOs engaged in outsourcing our jobs.”

This post originally appeared on ourfuture.org on September 12, 2016. Reprinted with Permission.

Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.


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DREAM Act Could Add $329 Billion To U.S. Economy

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The DREAM Act was first introduced as a bipartisan measure in 2001, but has languished in Congress ever since. Republicans have blocked the bill, which would help young undocumented immigrants who came to the U.S. as children gain citizenship. President Obama says he supports the policy and issued a directive in June to help protect DREAMers from deportation by giving those who qualify temporary legal status.

But if Congress passed the DREAM Act and granted legal status to eligible undocumented immigrants who came to the U.S. as children, it would add an additional $329 billion to the U.S. economy and 1.4 million more jobs by 2030, according to a new report from the Center for American Progress and the Partnership for a New American Economy. Enacting the DREAM Act would boost the economy first by improving the education and job opportunities for young undocumented immigrants in the U.S. A legal status and education contribute to higher earnings:

“This report proves a fundamental truth about the contributions of immigrants to the American economy: we absolutely need them to continue our economic growth,” said New York City Mayor Michael Bloomberg, Partnership co-chairman. Critics argue that legalizing undocumented immigrants only would create new workers who would take American jobs, but the new report shows that the economic benefits of the DREAM Act would ripple throughout the economy and create new employment.

While the research about the economic benefits of the DREAM Act does not take into account any costs of implementing the law, the report’s authors say the future costs would be minimal. Previously, the Congressional Budget Office estimated that the DREAM Act would increase federal revenues by $1.7 billion over the next 10 years and reduce federal deficits by $2.2 billion over that time. And the DREAM Act could also help fill the 16 million shortfall of college-educated workers that is expected to hit the U.S. by 2025, especially in science and engineering.

This blog originally appeared in Think Progress on October 1, 2012. Reprinted with permission.

About the Author: Amanda Peterson Beadle is an editorial assistant at ThinkProgress.org. She received her B.A. in journalism and Spanish from the University of Alabama, where she was editor-in-chief of the campus newspaper The Crimson White and graduated with honors. Before joining ThinkProgress, she worked as a legislative aide in the Maryland House of Delegates. In college, she interned at the Scripps Howard Foundation Wire, the Press-Register (Mobile, Alabama), and the Ludington Daily News. She is from Birmingham, Alabama.


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Minimum Wage Boost Could Create 100,000 Jobs

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Credit: Joe Kekeris
Credit: Joe Kekeris

ib341-figureA.png.538When wages rise, workers and communities benefit. So imagine how improved our national economy would be if the wages of nearly 30 million workers got a boost?

If Congress acted to raise the federal minimum wage to $9.80 by July 1, 2014, some 28 million workers would see a pay increase, according to the Economic Policy Institute’s (EPI) latest report on the minimum wage. Further, those workers would receive nearly $40 billion in additional wages over the phase-in period.

During an across the board phase-in period of the minimum-wage increase, the U.S. gross domestic product (GDP) would increase by roughly $25 billion, resulting in the creation of approximately 100,000 net new jobs, according to EPI (click on chart at left to expand).

Maybe that’s because raising the minimum wage is a matter of fairness and basic American values: The minimum wage would be $10.55 an hour if it matched the inflation rate. Now it’s $7.25 an hour.

Maybe that’s because raising the minimum wage is a matter of fairness and basic American values: Now at $7.25 an hour, the minimum wage would be $10.55 an hour if it matched the inflation rate.

The newest EPI report reiterates some of its earlier findings, which refute the stereotypes often associated with minimum-wage workers.

  • Women would comprise nearly 55 percent of those who would benefit.
  • Nearly 88 percent of workers who would benefit are at least 20 years old.
  • Although workers of all races and ethnicities would benefit from the increase, non-Hispanic white workers comprise the largest share (about 56 percent) of those who would be affected. About 42 percent of affected workers have at least some college education.
  • Around 54 percent of affected workers work full time, over 70 percent are in families with incomes of less than $60,000, more than a quarter are parents and over a third are married.
  • The average affected worker earns about half of his or her family’s total income.

On July 26, Sen. Tom Harkin introduced a stand-alone minimum-wage bill, S. 3453, The Fair Minimum Wage Act of 2012. On the same day,
Rep. George Miller (D-Calif.) introduced legislation in the House of Representatives, H.R. 6211, mirroring Harkin’s minimum-wage legislation.

Congress is home for summer vacation right now, but lawmakers will be back. And when they return, the AFL-CIO urges them to pass the Fair Minimum Wage Act of 2012 (read letter here), as are noted economists.

This blog originally appeared in AFL-CIO on August 15, 2012. Reprinted with permission.

About the Author: Tula Connell got her first union card while she worked her way through college as a banquet bartender for the Pfister Hotel in Milwaukee they were represented by a hotel and restaurant local union (the names of the national unions were different then than they are now). With a background in journalism (covering bull roping in Texas and school boards in Virginia) she started working in the labor movement in 1991. Beginning as a writer for SEIU (and OPEIU member), she now blogs under the title of AFL-CIO managing editor.


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Looking for answers on the jobs crisis? Look at businesses, not workers.

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Laura Clawson

job_seekers_to_openings_june_2012

The campaign to shift the economic narrative from businesses not creating jobs to workers not being good enough to deserve jobs continues. Sometimes it’s wholly cynical. Other times it seems to be done with good intentions. But ultimately, however good the intentions, workers—whether currently employed or struggling to find jobs—are harmed when powerful people promote the idea that the big reason for unemployment lies in the deficiencies of unemployed people.

Arianna Huffington, for instance, is getting on board with what appears to be a well-intentioned version of this storyline:

More than 20 million Americans are currently unemployed or underemployed, yet 3.4 million available jobs remain unfilled because job seekers lack the necessary skills.

This sentence should, for most readers, refute itself. There are more than 3 million jobs that not one of the more than 20 million unemployed or underemployed people can’t fill because they, the unemployed people, aren’t skilled enough? It’s a common line, and if it’s true, it points to a need for huge government investment in higher education and technical training. But the evidence suggests it’s just not true that skills and training are the real issue here.
For one thing, we have the data showing that recruiting intensity—how hard businesses are actually trying to find people to fill the jobs they claim they want to fill—is very low, far below what it was before the recession.

recruiting_intensity

Other studies, too, find “limited evidence of skills mismatch”; in other words, in a few areas there may be a scarcity of workers already trained to do vacant jobs, but it’s not widespread, certainly not enough so to explain the levels of unemployment we see. That’s pretty clearly visible when you look at a breakdown of jobless people and job openings by industry:

unemployed_and_job_openings_by_industry

Another measure of how workers—currently employed workers—feel about the actual, real-life availability of jobs lies in how many of those workers quit their jobs. Usually you quit one job either because you have another, better job prospect, or because you feel like it won’t be too hard to find an equally good job. But, the Economic Policy Institute’s Elise Gould writes, that’s not the case:

If the economy were healthier, we would expect a larger number of voluntary quits, which would signal that workers are more confident about outside job opportunities. Voluntary quits are also on a general upward climb, having increased 20.7 percent since June 2009. But they too have a long way to go; they are still 26.8 percent below their 2007 average.

Yet despite evidence piling on evidence that high unemployment is because of a lack of available jobs and that if allegedly available jobs go unfilled, it’s only very rarely because of a lack of skilled workers, we still hear a lot about how the problem is that workers need more training.

Many of the people involved in the campaign to highlight “what we the people can do to accelerate job creation and fill job openings” that Arianna Huffington is promoting doubtless have good intentions. And the campaign as she describes it does focus some on job creation, mainly through small business. (That’s a focus that may help some, but again fails to challenge the big businesses that are the real culprits in the jobs crisis.) But as long as the idea that there are millions of for-real job openings that American workers just aren’t good enough to fill is as central a focus as the idea that America needs job creation, this effort will do more to scapegoat workers than to make a dent in unemployment.

This blog originally appeared in Daily Kos Labor on August 12, 2012. Reprinted with permission.

About the Author: Laura Clawson is labor editor at Daily Kos. She has a PhD in sociology from Princeton University and has taught at Dartmouth College. From 2008 to 2011, she was senior writer at Working America, the community affiliate of the AFL-CIO.


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Your applications go unanswered because ‘job creators’ aren’t really trying to fill job openings

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Laura ClawsonThe business owner’s version of “the dog ate my homework” these days is “we’re not hiring because we can’t find workers with the skills we need.” Various business lobby groups like the National Federation of Independent Business and the National Association of Manufacturers are pushing that line hard, trying to pin continuing high unemployment on the alleged suckitude of American workers and justify continuing to refer to themselves as job creators even as they create damn few actual jobs. But the facts just don’t support it.

Mike Konczal rounds up research showing that job recruitment intensity on the part of businesses is low. During the recession, businesses didn’t have to try much at all to get a slew of ridiculously overqualified applicants for any job, and they got used to that. Now that things are picking up a little, employers are still spoiled, expecting to be able to snap their fingers and get what they want. And if that’s not the way it works out, they’re content to just sit around waiting and lamenting the lack of qualified applicants, rather than actually making an effort to recruit workers:

What does it mean for recruitment intensity to fall? This recruitment intensity, according to the research, “is shorthand for the other instruments employers use to influence the pace of new hires – e.g., advertising expenditures, screening methods, hiring standards, and the attractiveness of compensation packages. These instruments affect the number and quality of applicants per vacancy, the speed of applicant processing, and the acceptance rate of job offers.” This margin for trying to fill jobs is ignored, or assumed away, in most of the major economic models of unemployment and hiring.

So basically, it’s like this: business puts up a couple halfhearted ads offering $10 an hour and no benefits for a job requiring substantial skill and training, then waits for the applications to pour in. Only now, there are some applications but not thousands of desperate people begging for the job. The business takes its sweet time looking through those applications and getting back to people, some of whom may by now have found equivalently good jobs. Business then complains to reporters that there just aren’t enough qualified applicants for the jobs it’s trying so hard to fill. Reporter dutifully publishes article blaming unemployment on unemployed people.

Meanwhile, people who really do need jobs are left hanging, waiting for interviews, waiting to hear about jobs for which they’ve interviewed, wondering why the jobs that are out there pay so little considering the qualifications required. They’re waiting, struggling, hoping to hear. But the owners of the companies are too busy explaining that their homework was eaten by dogs to actually hire anyone.

This blog originally appeared in Daily Kos Labor on July 17, 2012. Reprinted with permission.

About the Author: Laura Clawson is labor editor at Daily Kos. She has a PhD in sociology from Princeton University and has taught at Dartmouth College. From 2008 to 2011, she was senior writer at Working America, the community affiliate of the AFL-CIO.


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T-Mobile To Lay Off Thousands Of Workers After Taking Millions In Taxpayer Subsidies For Job Creation

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Image: Pat GarofaloLast week, telecom giant T-Mobile announced that it plans to close seven of its 24 U.S. call centers. About 3,300 employees work at those centers, and the company is planning to lay off at least 1,900 of them, while offering transfers to some (though it doesn’t yet know how many). Adding insult to injury, four of the centers that T-Mobile is closing received taxpayer subsidies worth millions of dollars, according to Good Jobs First:

– Frisco, TX: $3.7 million

– Brownsville, TX: $5.3 million

– Lenexa, KS: $3.9 million

– Redmond, OR: $1.3 million

These subsidies took several forms, including sales tax exemptions, salary supplements for workers, and job training money. “T-Mobile USA’s decision to close seven call centers, employing 3,300 workers, is a bad one. It harms workers and communities, and in several locations, abuses taxpayers who provided funds to the company in exchange for employment and economic development,” said the Communication Workers of America.

T-Mobile is certainly not the first corporation to receive subsidies and then cut a community loose. Mega-manufacturer Boeing took a heap of taxpayer money and received significant local help in winning a $35 billion contract before bailing on Wichita, Kansas. Sears will lay off 100 workersafter receiving millions from Illinois (and can lay off another 1,750, thanks to the terrible terms to which Illinois agreed).

Fortunately, several of the subsidies received by T-Mobile came with clawback provisions, so officials in the states affected at least stand a chance of recouping some of the money they’ve lost. “The officials in those states should investigate the possibility of recapturing as much of those millions of dollars that were paid out as possible,” said Phillip Mattera, Research Director of Good Jobs First. “The taxpayers didn’t get all that they paid for. They lost those millions of dollars in revenues in the expectation that permanent jobs would be created.”

This blog originally appeared in ThinkProgress on March 26, 2012. Reprinted with permission.

About the Author: Pat Garofalo is Economic Policy Editor for ThinkProgress.org at the Center for American Progress Action Fund. Pat’s work has also appeared in The Nation, U.S. News & World Report, The Guardian, the Washington Examiner, and In These Times. He has been a guest on MSNBC and Al-Jazeera television, as well as many radio shows. Pat graduated from Brandeis University, where he was the editor-in-chief of The Brandeis Hoot, Brandeis’ community newspaper, and worked for the International Center for Ethics, Justice, and Public Life.


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Putting People Back to Work and Obama’s Jobs Summit

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The U.S. is now 24 months into the worst economic crisis since the Great Depression. Over the course of those two years, we have lost 8.1 million jobs and 17.5 percent of the workforce–27.4 million workers–are unemployed, underemployed, or have given up looking for work. Economists surveyed by Bloomberg forsee the unemployment rate remaining at above 10 percent well into the first half of 2010.

On the eve of President Obama’s Jobs Summit at the White House, SEIU Secretary-Treasurer and Change to Win Chair Anna Burger has a piece on the Huffington Post outlining a bold jobs plan to meet the demands of a 21st century economy:

“If we are going to come out of our current crisis stronger and better prepared for the challenges of a 21st century economy, we need someone to take charge, to focus–24/7–on job creation until we see results.

“It’s time for President Obama to empower the 21st century Francis Perkins, someone to speak for him and someone who has the authority across government to shake things up. It’s time to create a country that works for all of us. And that starts with jobs.

“Creating jobs isn’t rocket science. We just need the political will, courage and determination to make it happen.”

The jobs plan Burger laid out focuses on investments in public services and the private sector, a national job training program, and the need to pass the Employee Free Choice Act. Her plan also advocates for a “green bank” to fund energy-efficiency and renewables projects, as well as funding for infrastructure to help rebuild schools and roads. Read the entire plan here.

Burger will join 129 business, academic and government leaders at tomorrow’s Jobs Summit. Other labor labors in attendee will be Leo Gerard from the United Steelworkers, Joe Hansen from UFCW, the AFL-CIO’s Richard Trumka and AFT president Randi Weingarten.

Economist Paul Krugman, who will be at the White House jobs forum as well, shares his thoughts on how we can begin to right the wrongs of our economy in the NY Times this week. A large part the solution, according to Krugman? Not leaving workers out of the economic recovery–and the federal government actually creating jobs. “There’s a pervasive sense in Washington that nothing more can or should be done, that we should just wait for the economic recovery to trickle down to workers,” notes Krugman. “This is wrong and unacceptable.”

Krugman proposes direct public employment and employee incentives–such as a tax credit–to swell job creation.”All of this would cost money, probably several hundred billion dollars, and raise the budget deficit in the short run,” he writes . “But this has to be weighed against the high cost of inaction in the face of a social and economic emergency.”

More confirmed attendees of tomorrow’s jobs forum at TPM here.

*This post originally appeared in the SEIU Blog on December 2, 2009. Reprinted with permission from the author.

About the Author: Kate Thomas is a blogger, web producer and new media coordinator at the Service Employees International Union (SEIU), a labor union with 2.1 million members in the healthcare, public and property service sectors. Kate’s passions include the progressive movement, the many wonders of the Internet and her job working for an organization that is helping to improve the lives of workers and fight for meaningful health care and labor law reform. Prior to working at SEIU, Katie worked for the American Medical Student Association (AMSA) as a communications/public relations coordinator and editor of AMSA’s newsletter appearing in The New Physician magazine.


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