Foxconn Could Cost Wisconsin Billions, Study Says

Dec 3, 2019

A newly-released study says instead of bringing a lot of money to Wisconsin, Foxconn could depress economic activity in the state by tens of billions of dollars over the next 15 years.

Foxconn is the Taiwan-based corporation that's building a manufacturing center in Racine County. The company is slated to earn economic subsidies from state government if it meets hiring and investment goals. But a research center at George Mason University that is oriented toward free-market solutions says subsidies often aren’t needed, and can backfire.

READ: UW-Madison Says Foxconn Slow In Fulfilling $100 Million Pledge

One of the study’s authors, Matthew Mitchell, says research over the years shows a subsidy package like one Wisconsin is offering Foxconn only determines a company’s location decision between 2% and 25% of the time. Furthermore, Mitchell says the money for Foxconn would have to come from taxpayers.

"They, too, would have been able to invest it, start their own businesses, purchase more products and services — all sorts of activities that would benefit the economy. So, when you account for that factor, there’s a big gross cost. This could cost Wisconsin’s economy billions of dollars," Mitchell said.

Support is provided by Dr. Lawrence and Mrs. Hannah Goodman for Innovation reporting.

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