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Guest blog: The Great Walker Fox Con

Aug 03, 2017

As a guest blogger, MEA founder Melissa Scanlan explains why electronics manufacturer Foxconn should meet Wisconsin’s standards for labor and the environment just like other businesses.

Melissa K. Scanlan is a Professor of Law at Vermont Law School and Director of the New Economy Law Center.  She is the editor of “Law and Policy for a New Economy: Sustainable, Just, and Democratic,” (Edward Elgar 2017). She founded Midwest Environmental Advocates in 1999 and is a licensed Wisconsin attorney.

Apple supplier Foxconn says it will build a Wisconsin factory to manufacture flat screen TVs. The proposal is for a 20 million-square-foot plant in 2020 at a 1,000-acre site that has access to Lake Michigan’s abundant, fresh water.  They claim they will initially employ 3,000 people and aspire to eventually employ up to 13,000 at the site.

In theory, this could be great for Wisconsin workers seeking jobs in technology manufacturing.  Although I doubt Wisconsin’s workers would like the style of employment Foxconn uses in China (housing employees on site), perhaps they would use a different business model in the U.S.  Why don’t we look at how well the employees in Pennsylvania like working at the Foxconn plant the company promised in 2013? Oh right, that promise never came to fruition. OK, how about the plants announced to much fanfare in Indonesia, India, and Brazil? The reality fell far short of the hype.

What does it take to get Foxconn to actually follow through on its promises to open a U.S. manufacturing plant?  Governor Walker is trying to convince the legislature to approve an incentive package that includes Wisconsin tax payers footing the bill for $3B in tax incentives (which will mainly be paid in cash since the effective tax rate on Wisconsin manufacturers is only 0.4%), $252M for I-94 highway work, and provision of sewer, water, and garbage facilities without following public bidding requirements, among other financial goodies.  Can the state afford this? What does it indicate about supporters’ view of the proper role of government with the private sector? These are policy questions for elected officials.  Hopefully the debate will be informed by a thorough non-partisan cost-benefit analysis.

The legislative package also includes broad exemptions from the state’s environmental protection laws, including laws designed to protect the public’s rights to clean and reliable freshwater.  Although a variety of sites are being considered, the 1,000 acre site is likely to be near Lake Michigan.  The extent of the impact is unknown, but the project could destroy state wetlands, replace public lakebeds with fill to create more land, reroute streams, and allow topsoil to runoff into lakes, rivers, and streams – all without ever getting a state permit during the construction and operation of the project!  Further, the exemptions are not just for Foxconn, but any businesses that may one day locate within the “zone.”  Contrary to some public statements about the legislative proposal, there are not federal laws that apply to the activities that are proposed for state exemptions.

Unlike the subsidy issues, these are not policy matters on which the legislature has wide latitude.  These exemptions run afoul of Wisconsin’s Constitutionally-required “public trust doctrine.” The legislature and the Governor have a legal duty to act as trustees for the benefit of the public (both present and future generations) to ensure that Wisconsin’s waters are clean and abundant.  Our personal health and the many existing cities and businesses that work hard every day to maintain water quality depend on an even-handed application and enforcement of these laws.  The Chapter 30 and state wetland requirements have been interpreted by Wisconsin’s courts as the legislature carrying out its mandatory trustee duties.  To exempt this massive project from those protections is an abdication of the legislators’ and Governor’s promises when they took office to uphold the Wisconsin constitution.

A surefire way to bungle this deal is to add environmental exemptions that will tie the project up in court for years and then be thrown out as unconstitutional.  Wisconsin does not need to be in a race to the bottom to attract business at any cost.  The green clean economy is creating more jobs – many in manufacturing – than the deregulation approach on display here.  Foxconn should meet Wisconsin’s standards for labor and the environment just like other businesses and not demand outsized taxpayer subsidies to foot their bills.

Anything less is a con.

Scanlan's editorial also ran in the Milwaukee Journal Sentinel.