Fox Conned

Go Big, Or Go Home

Just as Governor Snyder signed the SB 242 – 244 ‘Good Jobs’ subsidy package yesterday, Foxconn announced that they accepted Wisconsin’s insane subsidies. The new Foxconn industrial campus will be built in the Badger State, not Michigan. The Foxconn competition, however, was the bait used to stampede the Michigan Legislature into passing the ‘Good Jobs’ package much sought by Michigan’s government and business establishments.

Wisconsin is going to lavish $ 3 billion in subsidies on Foxconn for somewhere between 3,000 and 13,000 new jobs. That works out to somewhere between $ 1 million and $ 230,769 in subsidies per job. Amortized over a 10 year period, the state of Wisconsin will be paying somewhere between $ 48.00 and $ 11.09 per labor-hour of every Foxconn worker’s wages using taxes extracted from other less fortunate Wisconsin workers. Subtract these per labor-hour subsidies from the headline wages touted for the future Foxconn workers and their ‘Good Jobs’ don’t look quite so good. Gussied up minimum wage jobs at best, wage theft at worst.

The little pig gets to feed at the trough, the hog gets taken to market and slaughtered.

Wisconsin’s population is only about 57% of Michigan’s, so $ 3 billion is a staggering burden. Badgers are used to extravagant taxation – their state government’s per capita spend is 43% more than Michigan’s. Unequivocal evidence of a higher threshold of pain throughout the Badger state, but this deal should sorely test that tolerance at a time when Wisconsin’s state government budget is in an ongoing fiscal crisis. Badger State private workers just got slaughtered financially. Governor Walker and the Wisconsin establishment just sold them down the river.

It is pretty clear that the Michigan SB 242 – 244 ‘Good Jobs’ subsidy package won’t go to waste. Anyone else would be embarrassed by the Foxconn betrayal on its subsidy signing day, but Governor Snyder has enjoyed 7 years of masochism shilling for Michigan’s crony capitalists, government bureaucrats, and unionized government employees. The ‘Good Jobs’ package will be used to quietly reward Michigan’s crony capitalist class for any and all future employment within our state.  They just won’t get to feed at a Wisconsin sized trough.

Crony capitalists across the world lust after state subsidies for their businesses, but it is less obvious why those subsidies are also very important to government bureaucrats and unionized workers of all stripes. Those subsidies create bogus headline wage numbers which bureaucrats and unions use as comparables when they negotiate their own wage packages. Those bogus headline wages even drive state minimum wages higher. A sly fraud upon the supply and demand curve in the labor market which then drives the labor participation rate ever lower.  Why McDonalds is installing computerized ordering kiosks at the expense of their cashier line workers.  Labor is only just so valuable.  Then its price crashes into reality.

Michigan workers just dodged a large caliber bullet from Foxconn, but will catch a lot of smaller caliber bullets fired by the ‘Good Jobs’ package instead.  The best epitaph for this sordid mess:

“Wait. Foxconn didn’t pick Michigan even after we were told we had to pass Good Jobs to get them? This is not my shocked face.”

Rep. Steve Johnson (R – Wayland Township) an opponent to the “Good Jobs” tax incentive package the Governor signed into law today. [MIRS, 26 July 2017]

Sadly, a majority of Michigan’s legislators are not so bright.

You Betcha! (17)Nuh Uh.(1)

  7 comments for “Fox Conned

  1. Jason
    July 27, 2017 at 1:16 pm

    Steve Johnson is one of the smarter ones in the legislature. Solidly conservative, long game mindset and practical.

    You Betcha! (7)Nuh Uh.(0)
  2. KG-1
    July 27, 2017 at 1:43 pm

    Will the REAL Rick Snyder please stand up.

      "The bills would accelerate a gradual and agreed upon phase in of the sales and use tax relief to a degree that I believe is not fiscally prudent. With budget pressures from a number of areas in coming years, in particular dedication of funds to road funding, I do not believe it is appropriate to create additional financial strain by accelerating the tax relief agreed to in 2013."

    This is a big of a whopper of a lie as the "Vote republican and watch us repeal Obamacare" spiel that we've all heard over the years.

    2018 cannot come soon enough.

    You Betcha! (8)Nuh Uh.(0)
  3. Sue Schwartz
    July 27, 2017 at 3:58 pm

    Basically we've got 17 more months of lame-ducking. But, hey, aren't we still paying for the job creation efforts of Granholm?

    So, Family Dollar several years ago, decided to open up a couple of outlets in TC. They had a big push for jobs--except the only jobs available were for old folks to set up the store, but the pay was way above minimum wage.. When hired we were told that we would be considered for jobs within the organization. Three days in, each of us were called into the office for an interview--but the interview wasn't for a job within the organization but rather for government subsidize funding of our wages, not going to us mind you, but to the corp. Invasive questions like are you receiving social security disability, and other entitlements--the more you got, the more the government would subsidize the pay to them. I recognized it as such and refused to participate. I was then hounded for the next few days, when corporate staff showed up from out of state to run the store. The corp. had no intentions of hiring us locals (at a time when TC was hurting) but was eager to get subsidized for the short-term local labor force they hired. There were a few other policies they tried to push on us short-term employees, like not leaving the site for lunch, not even sitting in our cars (so afraid we'd not come back) I never again stepped foot into that store after this. Soon, Family Dollar filed bankruptcy, was bought out by Warren Buffet, and as I write this, the store is doing it's going out of business sale. So yeah, let's subsidize more jobs shall we.

    You Betcha! (10)Nuh Uh.(0)
  4. Corinthian Scales
    July 28, 2017 at 11:23 am

    Meanwhile, the Snyder/Calley administration propaganda crew fight for prevailing wage: http://www.detroitnews.com/story/news/local/michigan/2017/07/27/prevailing-wage-measure-track/104053408/

    Note the name, Dave Waymire?

    Surprise, surprise: http://rightmi.com/so-safe-roads-yes/

    You Betcha! (7)Nuh Uh.(0)
    • Jason
      July 29, 2017 at 8:41 am

      Interesting opportunity I had as a road commissioner on Thursday. I voted against a local project because a part of it was presupposed to be a federal grant project, which requires prevailing wage. The project needs to be done, and everyone assures us the money will be there, but I assert that we should either wait, or mark it off as a local project, and then pay based on local scale.

      We are paying more in the hopes we get that federal grant money. "We always get it" was what I was told.

      You Betcha! (6)Nuh Uh.(0)
      • KG One
        July 29, 2017 at 2:59 pm

        As much as I hate to say this...given the deceitfulness by the republicans on the Obamacare repeal (another one of many), there is some truth to that.

        Too many politicians lack the integrity when dealing with voters and would rather continue bribing them with other people's money in order to maintain the lifestyle they have become too accustomed with.

        Wannabe politicians moving up the food chair are all to familiar with this.

        You Betcha! (3)Nuh Uh.(0)
  5. Corinthian Scales
    August 5, 2017 at 9:37 am

    Interesting.

    https://twitter.com/realDonaldTrump/status/893416615504748544

    It's as if, Gov. Scott Walker has added a Hank, and Doug Meijer, to his state.

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