The most jobs ever created by a new U.S.-based project funded by a foreign company.
That was the splashy promise in 2017 when former President Donald Trump and former Wisconsin Gov. Scott Walker heralded a massive new factory in southern Wisconsin to be built by Taiwan-based electronics manufacturer Foxconn.
“This is a great day for America, it is a great day for Wisconsin, and it is a great day for Foxconn,” Walker said at a 2017 White House event. “Today we’re announcing the single largest economic development project in the history of the state of Wisconsin, and one of the largest in the history of this country.”
But a new book argues those big promises have come up way short. It’s called “Foxconned: Imaginary Jobs, Bulldozed Homes, and the Sacking of Local Government.” Journalist Lawrence Tabak, author of “Foxconned,” says the company’s likely best known for its work creating Apple’s iPhone.
“They, more lately in their history, got into the business of manufacturing large screen TVs. They proposed that they would bring that technology to … Wisconsin and build a $10 billion plant that would build the largest TV sets that you could imagine,” Tabak said.
In order to lure Foxconn, Wisconsin leaders promised some $3 billion in incentives and made space for the facility by forcing residents out of their homes.
“About 75 of those homes were given a letter in October of 2017 saying that they would be losing their homes through eminent domain. The family farms there have also been transferred, under a great deal of stress and perhaps even coercion to sell their land, even though some of it had been in families for generations,” Tabak said.
And it wasn’t just bulldozing houses: “Racine County and Mount Pleasant, a village of 26,000, went in whole hog on the infrastructure spending. They’ve spent at least half a billion dollars on roads, water infrastructure, and buying the property which they’ve deeded to Foxconn,” Tabak said.
Tabak says local residents had no meaningful input into the project, and that after it was announced it had so much momentum they were powerless to stop it. But after all the effort and expense to buy up private property and beef up infrastructure, the massive manufacturing facility and the jobs that came with it never materialized.
“What’s there is rather disappointing: about 5% of their promised square footage and only a tiny fraction, maybe a few hundred jobs, that have been created,” Tabak said.
The billions in incentives promised by the state were linked to job creation, so they haven’t been paid out. Earlier this year, officials inked a drastically smaller deal with Foxconn lowering the potential incentives to $80 million. But the homes and farms cleared away are long gone, and the infrastructure money long spent. Tabak says what happens next isn’t clear.
“Foxconn owns a thousand acres of Wisconsin property. What they do with it is unknown. They not only own property, they have a pipeline to Lake Michigan, one of the last great resources of clean water in the world. The rest of the property which is now about 3,900 acres is basically an empty industrial park waiting for the civic leaders to potentially develop it over time,” Tabak said.
Read an excerpt from “Foxconned” below.
The story of Foxconn might be exceptional in scale, but otherwise it is a window onto a deeply established, institutionalized process of city-versus- city and state-versus- state competition that beggars public coffers while enriching corporations. The love of economic development spending crosses party lines, but it has proved particularly popular in states like Wisconsin under the control of Republican governors and legislatures. As Governor Walker’s campaign slogan had promised, Wisconsin was “open for business.” Cutting business taxes and spending freely on economic development held out the promise of prosperity but contained the reality of slashed education budgets, cuts to social services, and deferred spending on deteriorating infrastructure. Even so, the political halo for governors and mayors granted by landing deals was incontestable. Everyone seemed to love a winner, even if they grossly overpaid.
Trump’s promise in 2016 to bring back manufacturing jobs—like those in the Dubuque of my childhood—was a major part of his appeal in the Upper Midwest. It was welcome news to Racine County, in southeastern Wisconsin, the eventual site for the Foxconn complex. Even more so than Dubuque, the city of Racine had once been a bustling manufacturing center with abundant well-paid jobs. During and after World War II, factories short on labor recruited workers from the Deep South, making Racine a destination in that wave of the Great Migration. But like Dubuque, beginning in the mid-1970s Racine entered a period of steady economic decline. So Foxconn’s promise of 13,000 “family-supporting” jobs was irresistible to local representatives of both parties. When it came down to designating which land to grant to Foxconn, not everyone was so accommodating. Lucky for the boosters, the village of Mount Pleasant—just outside of Racine, population 26,000—had not only plenty of wide-open farmland but also a Tea Party–led village board who jumped at the opportunity. Mount Pleasant’s boosters believed—or said they believed—that by falling in line behind the Foxconn project, they would be helping make America great again.
Digging into the Foxconn project unveils the cozy relationships among corporations, contractors, consultants, and municipal and state governments. It illuminates a deeply ingrained economic development complex that rewards corporations with generous taxpayer-funded grants, politicians with political capital, and connected contractors and vendors with lucrative business. Public incentive spending engineers public support through promised job creation but ends up enriching the few. Our current means of economic development satisfies the definition of “plutocratic populism,” developed by the political scientists Jacob Hacker and Paul Pierson. Plutocratic populism is a system in which the majority of voters end up supporting a process that helps concentrate wealth. Modern economic development is a below-the- radar machine that steadily moves money from public coffers to enrich the already affluent, helping to power the accelerating income disparity in the United States that is not only a national disgrace but also a looming danger to the republic.
We are all being Foxconned, every day.
Reprinted with permission from Foxconned: Imaginary Jobs, Bulldozed Homes, and the Sacking of Local Government by Lawrence Tabak, published by the University of Chicago Press. © 2021. All rights reserved.