Monday, December 16, 2013

Burke should endorse progressive jobs plan

Increasing aid, growing the minimum wage, and restoring the EITC could help improve the jobs situation in Wisconsin

The campaign for the governor’s race is heating up, and Mary Burke, the only declared candidate from the Democratic Party’s side, is taking heat from the right on some of her policy positions.

From the Journal Sentinel:
In recent days, the GOP stepped up attacks on Burke for entering the race without a jobs plan.

Burke’s response?

“It will be an important part of my campaign,” she says, adding that her jobs plan will be “one that is well thought out and one that I will implement as governor.”
I personally have no doubt that Burke will come up with a jobs plan that will be competitive with current Gov. Scott Walker’s. Indeed, the Republicans who are critical of Burke ought to transfer at least some of that criticism towards their own ranks, as job growth has actually slowed significantly under Walker’s watch.

It might behoove Burke to consider some progressive ideas for job creation, ideas that have worked in the past and that reject the “trickle down” theories of Walker and the GOP.

Increasing Public Aid

Among the first of these ideas is increasing aid for public assistance programs. This is one plan that Burke herself has already explicitly said she would have done differently than Walker, particularly on the issue of accepting federal Medicaid dollars.

Walker rejected Medicaid funds, a move that cost the state more financially and removed nearly 100,000 adults from BadgerCare across the state.

More aid to those who need it allows some of the state’s citizens a bit of increased purchasing power. By increasing purchasing power, demand for labor rises as goods and services are purchased at a higher rate. Removing individuals from BadgerCare, however, creates more fiscal concerns for Wisconsin’s downtrodden, which means less capital is placed into small businesses across the state...and thus, less hiring occurs.

Growing the minimum wage

A second method to growing jobs is increasing the statewide minimum wage. Now, countless conservatives have argued that raising wages actually hurts jobs, forcing business owners to pay employees more and hire less.

But recent studies have proven just the opposite holds true -- that increasing pay has little to no effect on curtailing employment, and may in fact lead to more hiring as a result of, once again, greater purchasing power by those previously earning a lower rate of pay. By increasing what workers earn, we grow the purchasing power of the average worker, much like growing public assistance helps. The benefits of raising the minimum wage, however, is that there aren’t any direct costs to government itself -- the government simply states that this is the new minimum wage, and businesses must comply.

A growth in Wisconsin to $8.50 per hour would increase the average 40-hour minimum wage worker’s salary by about $50 per week, more than $200 per month. Imagine if thousands of minimum wage workers across the state suddenly had $200 more to spend each month. Wouldn’t that increase sales across Wisconsin, infusing much needed cash flow into the state’s economy, which in turn would boost employment? You bet it would!

Restoring cuts to the EITC

In 2011, while arguments were still being made against the controversial bill curtailing union rights in the state, Gov. Walker remained on the offensive with a controversial budget proposal. Among the items in his first budget was a cut to the Earned Income Tax Credit (EITC), a reduction of a popular tax credit that helped families in dire economic need.

The 2011 budget cut the EITC by $56.2 million from working families across the state. For a single mother with two kids earning minimum wage, the cut amounted to about a one percent increase in her taxes. A two-parent family with three children earning 150 percent of the federal poverty line saw their taxes go up 1.25 percent, and families of five earning just at the poverty line saw a 1.88 percent tax hike.

Restoring $56.2 million to the consumer class will undoubtedly help spur demand, and with it an increase in the need for more labor.

We’ve seen Walker’s failures -- now we need positive action

We’ve seen the “Scott Walker approach” to growing jobs in Wisconsin. More importantly, we’ve seen how much it has failed.

From June 2012 to June 2013, Wisconsin’s jobs numbers slowed down significantly. There were 23,968 jobs created during that time, a 39.9 percent slower increase than the last year of Gov. Jim Doyle’s final budget.

What can we learn from these numbers? Walker’s invention, the private-public Wisconsin Economic Development Corporation (WEDC) was an epic failure that mismanaged funds intended to help grow business and jobs. His other policy, of granting billions of dollars in tax breaks to corporations in the state, also failed to spur any job creation whatsoever. And decreasing take-home pay for state workers also likely diminished the number of jobs we could have created.

Let’s remember: these tactics were part of how Walker promised to grow 250,000 jobs in four years. We aren’t anywhere close to that number, nor are we close to being on pace to it. Quite simply, the Walker policies are failing Wisconsin. A different approach is needed, one that has been proven to work.

By embracing the progressive ideas outlined above, Mary Burke (or any other Democratic candidate) has a real opportunity to appeal to a progressive base as well as offer a positive vision much different from the failures of Gov. Walker.

We need solutions that will work, as well as appeal to a vast majority of Wisconsinites. When those two collide, it spells a winning formula for success, in this case removing Walker from office. The ideas outlined above provide just that: a jobs plan that can be both successful and popular in the state.

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