A new report from the state’s top economic development agency recommends Wisconsin rebuild its economy by increasing training opportunities for the unemployed, expanding statewide broadband, and supporting new businesses and startups.
Melissa Hughes, CEO of the Wisconsin Economic Development Corp., said the state will need to learn from the lessons of COVID-19, which shuttered businesses across the state due to mounting public health concerns and state efforts earlier this year to shut down or limit services at businesses in an attempt to minimize the virus’ spread.
“I think what COVID-19 did was show where we have weaknesses in our system ... as we recover it’s really important that we learn our lessons,” Hughes told the Wisconsin State Journal.
The guidelines detailed in the report underscore previous statements by Hughes and Gov. Tony Evers that WEDC will be taking a new direction under Hughes’ leadership, with a larger focus on rural areas and startup businesses. Last fall, Hughes joined the nine-year-old state economic development agency, which got off to a tumultuous start under former Gov. Scott Walker.
“I’ve felt since I came into this role, that we should be having a conversation on where we’re investing our dollars on an economic development side, and this is an extension of what I think is a need to put our cards on the table and decide how we’re going to play this game, but we have to play it together,” Hughes said.
The 150-page report, titled “Wisconsin Tomorrow — An Economy for All,” was submitted to Evers and state lawmakers on Tuesday. In April they passed COVID-19 response legislation that directed WEDC to provide leaders with a plan to support major industries in the state that have been adversely affected by the outbreak.
The report also stresses the need to focus on racial disparities in the state workforce and create equitable inclusion for all communities.
“We felt that it was critical to acknowledge that a recovery plan has to take into account all of the communities in Wisconsin,” Hughes said.
Back to work
The Wisconsin Department of Workforce Development reported the state unemployment rate dipped slightly in May, but still sat at 12%. While retail and service industries experienced some of the biggest gains since April, those industries also took some of the hardest hits as stores and restaurants were forced to close as the pandemic spread.
In addition, a June COVID-19 Business Impact Survey, conducted by UW–Oshkosh, found that most of the nearly 750 respondents reported being open for business. However, 14% said they needed additional resources to reopen or decide not to reopen. Five percent reported hiring staff in the past month.
As Wisconsinites look to return to the workforce, it’s expected some will be forced to enter new industries in order to find employment, according to the report.
“We can assume that many will remain unemployed as their jobs will have disappeared, and as such, it is incumbent upon Wisconsin to endeavor to help these individuals obtain different skills necessary to obtain employment in other sectors,” according to the report.
WEDC recommends the state provide incentives for businesses that train new employees or work with job centers; invest in short-term certification programs at tech colleges and the UW-System; support early care and education to increase back-to-work initiatives; and address access to quality health care.
The report recommends expanding the state Medicaid program to fully leverage federal resources, something Republicans have repeatedly rejected.
WEDC also recommends substantial investment in the state’s broadband infrastructure in order to support growing programs at K-12 and higher education institutions, as well as a growing network of individuals working from home amid the pandemic.
The agency recommends increased funding for broadband expansion with a focus on school districts where children do not have access to high-speed internet.
“Fixing broadband in Wisconsin is not a moon shot; it’s not insurmountable,” according to the report. “But it is critical to economic development and recovery and must happen now.”
In March, the state Public Service Commission awarded $24 million in grants to help bring high-speed internet service to underserved communities. Another $24 million is expected to be awarded next year.
WEDC’s third recommendation to state leaders is to encourage and provide incentives for entrepreneurship and startup efforts.
“Entrepreneurship and innovation will be the catalysts for a faster and stronger recovery from the downturn,” according to the report. “Because new businesses are hiring as they grow, they are the best source of job creation — better than the older stabilized firms.”
Recommendations include piloting and funding programs that support entrepreneurs; provide incentives to established firms to work with seed accelerator programs; invest in a state venture fund focused on supporting entrepreneurs; and identify manufacturing trends that could provide entrepreneurial opportunities such as artificial intelligence or data science.
Hughes acknowledged the state, which already has allocated more than $13.7 billion in federal and state COVID-19 relief dollars, cannot rebuild from the pandemic without additional federal assistance, due in part to the pandemic’s expected impact on the state’s coffers.
The Legislative Fiscal Bureau reported earlier this year that state sales tax collections were running about $380 million behind last year.
“Let’s look at our strengths, let’s look at what we have for state revenue and then let’s recognize that the impact of this is so big that we need to advocate and access and leverage every federal dollar that we can,” Hughes said.
Hughes said she anticipates the next step toward rebuilding the economy to include conversations with state leaders. However, bipartisan agreements between Evers, a Democrat, and the GOP-led Legislature have been few and far between. Lawmakers in the Assembly and Senate convened just once this year in response to the COVID-19 pandemic.
“We have, as a state, an opportunity to recognize this is a huge change and what do we want the other side of this to look like?” Hughes said. “We have the pieces in place for success in the future, we just need to move forward together.”
WEDC under fire
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Assembly Democratic Leader Peter Barca of Kenosha accused the Wisconsin Economic Development Corp. of stonewalling his requests for the documents.
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