President Donald Trump announced on July 26, 2017 that Foxconn – a Taiwanese electronics giant – will build a $10 billion LCD display factory in Wisconsin. Trump claims the deal will bring manufacturing jobs and economic development to the U.S. However the deal has come under fire for the $3 billion in corporate incentives offered to Foxconn.
Wisconsin state legislature has yet to approve the deal but it represents a significant cost to the state budget. The state would pay a subsidy to Foxconn of up to $250 million a year for 15 years, as well as offer environmental exemptions and lower utility rates. This is based on the predicted creation of 13,000 direct jobs, along with a further 20,000+ indirect jobs within construction and supplier companies. State taxpayers would aim to recoup the investment by 2043.
Yet the economic benefits of the deal remain ambiguous. Foxconn said that it planned to hire 3,000 workers over four years, rather than commit to the states’ long term goal of 13,000 workers. The company’s record in the U.S. also doesn’t inspire confidence. In 2013, Foxconn promised to invest $30 million in a high-tech factory in Pennsylvania. A site which remains empty along with similar broken promises in India, Vietnam, Brazil and Indonesia. Furthermore, Foxconn has attracted media attention globally for its poor track record on workers rights and pay.
Foxconn’s investment is an opportunity, given the need to create well-paying and skilled employment. However, the track record of Foxconn throws into question the deal’s predicted benefits. Politicians should consider taxpayer and worker interests, rather than attempt to enhance political agendas.
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