Without standards for jobs, the venture capital bill looks like a handout
Working families should have some assurance that any jobs that are created pay at least $30,000 a year and have good health benefits.
By USAction Affiliate Citizen Action of Wisconsin?s Jennifer Epps-Addison And Robert Kraig
Make no mistake about it, Wisconsin has a jobs crisis. Our state has fallen from 11th to 44th in the nation in job creation, and we are one of only five states whose economy is not projected to grow over the next six months. Worse yet, wages in Wisconsin are plummeting, and the jobs we are creating are mostly in low-wage work with few benefits and little opportunity to provide real economic security.
The good news is that Gov. Scott Walker and many leading legislators are prepared to put millions of dollars behind bills touted for their job creation potential. Recognizing there is a problem and that state government has a major role to play in the solution is half the battle. The bad news is that rather than making proven and strategic investments in job creation, these politicians plan to spend our money on venture capital programs without sufficient guarantee that the money will be used to create good family-supporting jobs.
There has been much discussion and fanfare around the development of a state venture capital fund. Elected officials of both parties, corporate lobbyists and various self-described ?entrepreneurs? hungry for public dollars to underwrite their business plans are pitching state venture capital programs as the best vehicle for job creation. Yet ask any of the legislative promoters of this approach, and not one of them can tell us just how many jobs they expect a venture capital fund to create. Instead, supporters ask taxpayers to naively believe that pouring public money into start-up companies of a private fund manager?s choosing will lead to more jobs for Wisconsin?s working families. Absent significant amendments to ensure that investments are actually linked to creating family supporting jobs, this is highly irresponsible public policy.
If you read the bills, there is no requirement that investments be made in businesses or industries likely to produce a large number of jobs, let alone good jobs. In fact, job creation is never identified as the primary goal of the venture capital fund, there is minimal public oversight in the selection of fund managers and there is no mechanism to track how many jobs are created as a direct consequence of the legislation itself, much less what the wages and benefits of said jobs would be.
This lack of transparency and accountability is exactly what precipitated the outrageous abuses at Walker?s quasi-private jobs agency (Wisconsin Economic Development Corp.), which squandered tens of millions of public dollars for no measurable results. This is recognized by the authors of the leading venture capital legislation who recently removed the troubled jobs agency from their bill.
Citizen Action has called on the Legislature to amend all venture capital bills to match the job creation rhetoric behind them. To protect the public interest, the primary criteria for the selection of investments by the fund manager must be the documented potential to maximize the number of family supporting jobs created as a result of the public?s investment. Additionally, we should restrict our investments to businesses creating full-time jobs that pay at least $30,000 per year with good health benefits.
Venture capital investments also should be completely transparent to the average citizen. The amount of money invested in each enterprise, job creation benchmarks and actual job creation results should be published at least quarterly on an easy to navigate website in language understandable to the typical Wisconsin citizen.
At a time when so many Wisconsin families are struggling to find good jobs, the Legislature has a moral obligation to ensure that scarce public resources for job creation are utilized to expand economic opportunity and security to the greatest number of Wisconsinites. In their current form the venture capital bills under consideration in Madison fall far short of this mark.
The jobs crisis in Wisconsin is dire. A well-structured state venture capital fund could be part of the solution if the requirement to create good jobs is explicit, and the program is transparent and accountable to the public. Entrepreneurs are to be lauded for their efforts, but we also need to see clearly that their private interests are not the same same thing as the true public interest. When public money is involved, there must be real accountability for opening more opportunity for average workers struggling to live the American Dream.
Jennifer Epps-Addison is the economic justice director and Robert Kraig is the executive director at Citizen Action of Wisconsin, which is headquartered in the Walker?s Point neighborhood of Milwaukee.
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