On Thursday, the Wisconsin State Assembly was poised to approve a $3 billion tax break to incentivize the Taiwanese multinational Foxconn Technology Group to build a display panel factory in the state. The deal, which still must pass the state Senate, would see the electronics giant invest as much as $10 billion in Wisconsin and hire as many as 13,000 people, but it has proven controversial, with opponents saying it isn’t worth the cost.
Another objection opponents raise is that with an unemployment rate of just 3.1 percent, Wisconsin doesn’t have enough workers to fill thousands of jobs. “Which is why,” Bloomberg View columnist Conor Sen infers, “the Foxconn strategy is really a bet that Wisconsin can recruit workers from other states”:
Illinois’s unemployment rate is 4.7 percent. Ohio’s is 5 percent. So the bet Wisconsin wants to make is that it can recruit a high-profile factory, which will draw in factory workers from other states, and that movement will have a multiplier effect creating even more jobs, leading to even more recruitment of workers from other states.
US states have long used tax and regulatory policies to differentiate themselves and attract business investment and talent—or to attract talent in order to attract businesses. With the US labor market the tightest it has been in a decade, states now face the same challenge as employers, of courting scarce talent by offering the right set of incentives. Sen points to Maine, where local employers and Governor Paul LePage are looking at ways to bring back natives of the state who have moved away:
Its unemployment rate is 3.5 percent, and its labor force hasn’t grown at all since the end of 2006. Its population is the oldest in the country. But there are 500,000 Mainers who live elsewhere in the U.S., and now the state and its employers want them to come back. Recruiters are scouring LinkedIn for workers with histories in Maine, and the governor is pushing for a bond program to raise money to help young workers pay back their student loans provided they work in the state for a certain number of years.
LePage’s proposal comes at a time when many employers are also using student loan repayment benefits to attract young talent with heavy student debt burdens. This might be a promising area of partnership for local organizations to collaborate with their state governments. As more organizations expand their employee education offerings from tuition reimbursement to include student loan repayment (a popular benefit among millennials), this area of practice is one to watch in the upcoming years.