Wisconsin lags neighbors Illinois and Minnesota in jobs and personal income, wrote Thomas Hefty and John Torinus, Jr., in a guest column in the Opinion section of the Wisconsin State Journal on Sunday, July 12. Iowa’s per capita income is less but job creation is three times ours.
With per capita income falling to 85.6 percent of the national average, Wisconsin’s income is about equal to Alabama’s. The authors conclude, “We need to build a more competitive economy or reconcile ourselves to being the Alabama of the north.”
Alabama of the north? I lived in the real Alabama for four years. Let me expound why Wisconsin will never be the Alabama of the north. In some ways Wisconsin is superior to Alabama but in some ways Wisconsin is inferior.
For all the griping about Wisconsin’s tax system, Wisconsin’s sales tax exempting groceries and the Wisconsin’s income tax so-called zero amount (income below this amount is not taxable) and credits for property taxes and other things are progressive, taxing the have-nots at a lower rate than those who have more. Alabama levies sales taxes on all groceries and even the poor have to pay income taxes. By soaking the poor and favoring the rich, Alabama often has budget problems.
The two pay very different property tax on primary residences. Alabama homeowners gripe when they pay more than $1,000 on a house worth $300,000. Depending on municipality, Wisconsin homeowners might pay $7,000 on the same house.
The unemployment insurance systems could not be more different. Wisconsin’s system is an unemployment shock-absorber. One could argue that Wisconsin’s unemployment benefit of 67 percent of previous earnings up to a maximum of $363 might be improved by paying a lower percentage or putting in a waiting week but the benefit level helps those who lost their jobs. In Alabama, the maximum benefit level is $255 per week, 30 percent less.
The public higher education systems could not be more different. Wisconsin’s system of four-year universities, two-year schools and technical colleges is enrollment-based. All of Alabama’s four-year schools are within 90 minutes of Birmingham. Technical colleges are legislative pork; there is a technical college in nearly every legislative district.
Alabama, however, leads Wisconsin in job creation by a wide margin. Wisconsin poured money into Janesville and Kenosha in a vain attempt to keep ill-fated auto plants open. Alabama has built plants to make sport utility vehicles for Mercedes and Honda, and engines for Toyota and Hyundai. They have trees and water so the paper mills that have closed in Wisconsin are open in Alabama.
High-technology jobs tend to be clustered around Huntsville, put on the map by Werner von Braun and led by the University of Alabama – Huntsville. Huntsville is ironically located near Madison, Alabama. All of the four-year schools excel at technology transfer and many jobs are an easy Interstate drive to Atlanta and Nashville.
If Wisconsin were to follow Alabama’s example, new jobs would be clustered in western Wisconsin and between Racine and Kenosha. Madison is nice but irrelevant, if not actively hostile, as a center of commerce. The capital of Alabama, Montgomery, is twice as large as Madison even though it has half as many state workers. For all the historic hoopla about Rosa Parks, there is hardly any public transportation but parking downtown is plentiful and cheap.
Wisconsin is not the Alabama of the north, then. It was a nice concluding remark by Hefty and Torinus but it ultimately fails.