Jobs and global commerce: bringing it all back home
There was a conference Thursday with the Center for Civic Engagement at the UW-Marathon County entitled “Positioning Central Wisconsin to Better Compete in the Global Economy,” and since it was right across the street and I’m an economic development kind of person, I went over to check it out. I was especially interested in hearing Footlocker U.S. President and CEO Dick Johnson. He works in New York now, but he lived in Wausau a few years ago, before taking a position as president of Footlocker Europe in Amsterdam.
A lot of people who have been around Wausau for awhile know the story of the guys from Eastbay Running Store who started out selling athletic shoes out of their trunk at the kayak races and eventually ended up with a huge enterprise. It was sold and it’s a worldwide business today working through 3,400 retail outlets, but they still have significant operations in Wausau filling catalogue and online orders from a half million square foot distribution facility in the industrial park and a corporate facility off 1st Avenue.
Anyway, back in 2005, there were three couples from Wausau who were planning a trip to Paris and one of the gentlemen on the journey was Dick Johnson. None of them had been to Paris before and I was leading a rather flexible existence at the time, so I volunteered to show them around town on their arrival day, since I like Paris anyway. We had a great time and they were all real troopers, preventing jetlag by marching the city and enjoying the ambiance instead of taking that tempting nap after the transatlantic flight. One thing on their list was a trip to the top of the Eiffel Tower. Dick bought me a ticket, for which I still have the stub and with which I took the photo above.
One thing that really resonated from his presentation at the conference a few days ago was a negative experience the company had trying to expand their call center. They were getting little help from local officials and ended up setting something up in Oshkosh. Times were pretty good in those days. Just thinking about 2005, for example, the Wisconsin unemployment rate dipped below 4 percent at times and never even reached six percent that year, or for several years thereafter. “Those are just call center jobs,” said people Dick Johnson talked with about Eastbay’s expansion plans.
About all I can say about it is that I know he didn’t talk to me. At Marathon County’s Education and Economic Development Committee, I harped on the idea that ALL jobs are important and that necessarily includes occupations with lower barriers to entry.
We need rungs on career ladders that go all the way to ground and it is shortsighted to only be concerned with higher-paying occupations. Those lower-paying jobs need supervisors. Young people and those who need to get back into the workforce have a place to gain current experience. A second income in a household can push the family’s income more firmly into the middle class, providing an extra measure of financial security. Households have a better chance to build assets and a good share of that income ends up supporting other businesses with consumer spending. Eastbay even has a tuition reimbursement program so employees who want to improve themselves and their career prospects through higher education have an opportunity to do that.
And here’s a biggee: additional demand in the labor market is what will eventually support higher wages and benefits. Remember a few years ago when the minimum wage was practically a moot point because almost nobody could find people to work at that rate of pay anyway? Now, legislation is being considered to deal with pervasive discrimination against the unemployed because so many companies refuse to consider hiring them. Maybe there ought to be a law, but it would be far better if there were jobs from which people can work their way in and up.
Today, the national unemployment rate is 9.1 percent and the underemployment rate is 16.5 percent, so we’re not in a position to be so picky about jobs. Yet the Wisconsin Economic Development Commission passed a resolution in June that 85 percent of jobs receiving WEDC incentives must pay workers at least 150 percent of federal minimum wage; around $10.88 an hour. WEDC head Paul Jadin says the agency has been getting inquiries from employers looking for government assistance to open call centers here paying $8 an hour but it has turned them down. Sound familiar?
Look, I know that sounds very reasonable at first blush and I’m all for great pay and benefits. Unfortunately, it’s the same out of touch mistake that Dick Johnson was telling us about at the Global Economy conference. It’s also a great way to keep wages lower for longer, as if we needed any more supply side fat. As for WEDC, that $10.88 standard doesn’t seem like much of a hurdle. But they could jack their standard up to $20 an hour and then button up most of their agency, since they won’t have many people left to talk to anyway. In short, it was a bad idea at 4 percent unemployment when we were shipping those jobs to India and it’s a worse idea now.
I’m not saying we need to give away the store for low wage jobs, but let’s not kid ourselves about the value of employment on all levels. Why pretend that every worthwhile job has to be a career or act like pursuing incremental progress is a worthless endeavor, either individually or collectively? It’s not. All other things being equal, the person who goes to work every day in a call center will be in a far better position to be upwardly mobile a couple of years from now than the person who spent their time unemployed.
This economy has a problem with insufficient demand in many different areas, including and especially labor. Instead of turning up our noses at service sector jobs that might be developed, it would be far more effective to do everything we can to get everybody working just as quickly as we can. Once that happens, wages and career mobility will have a way of taking care of themselves.