Take a Higher Road to State Job Creation
By: Joel Rogers (guest editorial)
From: Wisconsin State Journal
Date: 2/29/2004
Though the national recession ended more than two years ago, Wisconsin’s job picture hasn’t recovered. We still have fewer jobs now than when the recession ended, and about 90,000 fewer since George Bush took office.
Growing industries also pay less on average -- about 20 percent less -- than industries showing employment decline. These were among the findings of a recent “Job Watch” report by the UW-Madison Center on Wisconsin Strategy.
Manufacturing is at the center of this story. With annual average pay around $40,000 per year, manufacturing jobs offered some of the best earnings available to Wisconsin workers without four-year college degrees. But Wisconsin’s manufacturing sector took a bad hit during the recession and has lost another 33,000 jobs since it ended.
These job trends should worry all Wisconsinites. A statewide shift to lower-paying jobs means declining public revenues as well as private incomes. And that means poorer public services, worse pollution, decaying infrastructure, higher inequality, and, inevitably, less investment in the state.
But that future is not inevitable. As a single state, Wisconsin can’t renegotiate international trade agreements like NAFTA, close federal budget deficits, or alter the global course of industry change and competition. But that doesn’t mean we’re powerless to shape our state’s economy. We simply need to see the urgency of doing so and make the commitment to getting it done.
The governor’s ambitious Grow Wisconsin plan for economic development is a step in the right direction. For the first time, this commits the state to promoting “high road” economic development and beginning to close off the “low road” alternative.
“High road” competition delivers high wages and high profits by eliminating waste, driving up productivity, and focusing on product quality, distinctiveness, innovation and high performance. We know that customers are willing to pay a premium for such product characteristics, whether achieved in manufacturing or services. And that means better pay for the typically better trained and equipped workers who help produce them.
“Low road” competition, by contrast, focuses more narrowly on reducing price. It does this by foregoing the investments in worker training and technology needed for high road performance and outsourcing to low-wage workers elsewhere or abroad. The low road is bad policy for Wisconsin. It lowers our living standards and -- given the breadth of international wage differences -- isn’t even sustainable as a competitive strategy.
We should get off the low road. But paving the high road, and working with employers and firms to enable them to prosper on it, takes real focus, effort and some measure of cooperation among the different “stakeholders” in a prosperous economy.
Is Wisconsin up to this task?
Are we prepared to make the investments in our workforce, both present and future, to give workers the necessary skills? Are we prepared to set environmental, health and other protective standards high enough to drive productivity, while also working with firms to find the most efficient way to satisfy them? Are we prepared to close off the low road by, for example, raising the state’s minimum wage? Are we prepared to do something about our manufacturing problems, for example, by applying some “friendly persuasion” to big firms to modernize their supply chains right here, rather than export their work abroad, and getting them the technical assistance to do that? Are we prepared to have a serious state discussion of taxes, rather than demagogue new ways of avoiding this “price we pay for civilization”? Are we willing to make investments in more efficient systems of energy generation and distribution, mass transit, and other infrastructure that we know pay for themselves, but over a longer time period than the next quarter?
The jobs numbers tell us that we’d better be.
Copyright © 2004 WSJ