Attracting Out of State Workers for Foxconn Isn’t Such a Bad Deal After All
By definition, a Wisconsin job is one located in Wisconsin. Unless you are One Wisconsin Now. The far left group’s Deputy Director, Mike Browne, bemoaned in a recent blog post that Taiwanese tech giant Foxconn’s proposed Wisconsin facility near the state line might hire some people who currently don’t live in the state. In the latest liberal reach to cast doubt on the Walker administration’s negotiating skills, Browne cries foul:
“There’s nothing in this Foxconn deal to prevent Wisconsin taxpayers from paying for jobs that will go to people in Illinois or other states,” said Browne. “Failing to guarantee that Wisconsin tax dollars support Wisconsin jobs takes a bad deal and makes it worse.”
Of course, any job in a factory in Wisconsin is a “Wisconsin job.” While that concept appears to have been lost on Browne, that doesn’t change if an Illinois resident holds the job. In fact, this is a common and necessary practice in order to fill the job demands located on the Wisconsin/Illinois border. And it’s situation that is actually more beneficial to Wisconsin than you might think.
Instead of seeing Illinois workers commuting across the border to work as a disadvantage for Wisconsin, Wisconsin’s lower property taxes and job outlook in many cases convinces workers to relocate here. In an article written for IllinoisPolicy.org data from the 2015 U.S. Census Bureau showed that Illinois lost 11,448 residents to Wisconsin in 2015, and totaled 85,976 residents that moved to Wisconsin over a ten year period. The shift of Illinois residents coming to Wisconsin has some, like Kurt Bauer, president and CEO of Wisconsin Manufacturers & Commerce, believing this is an opportunity for Wisconsin companies. In an article for the Milwaukee Business Journal he said:
Many businesses are leaving Illinois and so are its citizens. Illinois lost more population than any other state between 2013 and 2016, according to the U.S. Census Bureau. Last October, a scientific poll conducted by Southern Illinois University found that 47 percent of Illinois residents would like to leave the state. Therein lies the opportunity for Wisconsin. Our state has a labor shortage. Baby boomers dominate the workforce, but they are either at or fast approaching retirement age. Our birth rates are below replacement levels and since 2008, more people have left Wisconsin than have moved in.
Companies near the Wisconsin border such as Amazon, aren’t strangers to the idea of having Illinois residents work for them. At the recent Amazon job fair in Kenosha one prospective worker was located 60 miles away in Illinois, but was still looking to apply for the job. As Wisconsin is also in the midst of a labor shortage, we will need out of state workers to help fulfill the need for all the new jobs, along with specialized workers that Wisconsin may not have. Therefore, we shouldn’t be afraid of reaching out to fulfill job openings since a majority of that population may end up becoming Wisconsin residents in the end anyway.
WEDC Secretary and CEO Mark Hogan told the Assembly Committee on Jobs and the Economy during a special session on the Foxconn deal that:
We have found, in talking to other employers in the Kenosha and Racine County area, that relatively small percentages of their workforces live in Illinois. People tend to locate close to where they work. When Illinois residents are hired by Wisconsin companies, over time many of them choose to relocate to Wisconsin. It’s important to note that Wisconsin will collect individual income taxes from all Foxconn employees, including any employees who live in Illinois.
Employees who live in other states and work in Wisconsin owe taxes to Wisconsin on money they earn here. Because we have an income tax reciprocity agreement with Illinois, Illinois residents who work in Wisconsin only have to file a tax return in Illinois, but we calculate what they would have paid if they filed in Wisconsin and Illinois owes us that amount. So, we collect taxes in Wisconsin for those employees, although they only file returns in Illinois. Right now, because more Wisconsin residents work in Illinois than vice versa, Wisconsin makes a net payment to Illinois every year under the reciprocity agreement. Establishing Wisconn Valley will help us reverse that trend.
Having Foxconn in Wisconsin would no doubt attract the attention of workers from out of state; it’s too big of an opportunity for it not to. But that does not mean that the attention is a bad thing. At the root of it all, Wisconsin will still be the economic center of it promoting people to come to us, rather than the alternative of Wisconsinites leaving the state to go work somewhere else.