In 2010, Gov. Scott Walker campaigned for his office on a platform of creating private sector jobs. In fact, he promised Wisconsin voters that under his administration the state would create 250,000 new private sector jobs by the end of his first term. So far, under Walker’s administration, Wisconsin has had dismal job creation, to say the very least. Walker’s Britain-like austerity programs and income tax cuts will not create jobs. To fulfill his job creation promise, Walker should endorse the creation of a new state-owned bank – calling it the Bank of Wisconsin.
Although Walker campaigned on creating 250,000 private sector jobs in his first term, job creation numbers thus far demonstrate that his administration is not on pace to fulfill this ambitious vow. According to the Capital Times, the most recent statistics show Wisconsin has created approximately 44,600 jobs since Walker became governor, and a U.S. Bureau of Labor Statistics report ranked Wisconsin 44th in the nation overall in job creation for the period between September 2011 and September 2012.
At this pace, Walker won’t even reach the halfway mark of his goal of creating 250,000 jobs in his first term. Not only is Wisconsin having trouble creating jobs quickly in pursuit of Walker’s campaign promise, Wisconsin’s unemployment rate is also increasing across much of the state. According to a recent report by the Wisconsin Department of Workforce Development, the unemployment rate between January and February increased in 61 of 72 Wisconsin counties.
Why is Wisconsin having trouble creating jobs? If we ask Walker, Wisconsin was having trouble creating jobs in the past two years because of economic uncertainty created by political protests. As he said in a recent Milwaukee speech, “The first year we had a lot of protests in the state. We had two years’, almost, worth of recalls. A lot of employers here I think can relate to the fact (that) uncertainty is one of the biggest challenges for employers big or small or anywhere in between. There was a lot of uncertainty. The good news is that’s passed.”
It certainly is true that economic uncertainty can impede job creation, but Walker is wholly overstating the effect political protests and recall elections had on the economic uncertainty in this state. Instead, I think the reason for Wisconsin’s dismal job creation can be directly linked to one thing: Walker’s economic policies.
When Walker first took office, he instantly wasted Wisconsin’s budget surplus of just a little more than $120 million by enacting the funding of private health saving accounts, tax incentives for employers and many other provisions, and thus artificially created a state budget crisis. Walker wasn’t done yet. He still had to enact Britain-like austerity policies, like cutting hundreds of millions dollars of funding to the University of Wisconsin System. As has been seen with Britain’s austerity programs under Prime Minister David Cameron, austerity programs do not promote growth – they hinder it.
Instead of embracing ill-advised and antiquated economic polices like austerity programs and tax breaks, it is time for Walker to get serious about promoting job growth by creating the Bank of Wisconsin. Currently, the only state in the U.S. with a state-owned bank is North Dakota. The Bank of North Dakota has been around since 1919 and now has assets of approximately $5 billion. Instead of North Dakota tax revenues being placed in a private commercial bank where the tax revenue deposits might be lent out of state or be used for risky financial speculation, tax revenues are placed in the BND, and these deposits are then used to fund low interest-rate loans to small and middle-sized businesses in North Dakota. Not only does the BND help promote intrastate job growth, which is extremely important, it also returns to the state a small profit. According to the Wichita Eagle, between 1997 and 2010, the BND returned “over $350 million in profits to North Dakota’s general fund.” If Walker were to create the Bank of Wisconsin, not only could Wisconsin have more funds to contribute to the state budget, Wisconsin would also create more jobs because of low interest-rate loans to small businesses. Thus, Walker might have a real chance to fulfill his lofty campaign promise.
Walker campaigned for governor on a promise of creating 250,000 jobs. So far, his austerity initiatives and tax cuts have not worked toward achieving that lofty and ambitious goal. If Walker wants to create real long-term job growth, he should create the Bank of Wisconsin. Without it, I don’t think there’s a realistic chance of him being able to keep his fundamental campaign promise.
Aaron Loudenslager ([email protected]) is a first year law student.
