Foxconn has become virtually a household name in our part of the country given its decision to build a new complex in S.E. Wisconsin.
We have all heard much about the Foxconn deal so far. We’ll be talking about the impacts, both good and not-so-good, for some time to come. There is, of course, that distant nagging doubt that this all seems too good to be true. After all, there is at least one other example where Foxconn left an area after a brief time given that it couldn’t get to agreement with which it was comfortable.
All indicators are that Wisconsin, with some $3 Billion in subsidies provided over the period of the agreement and the S.E. Wisconsin area land owners have been very obliging; and, that this is as real as it can be before the campus sprouts. Average wage earned may be be some $52,000 per job, and some 13,000 people are being and will be hired as this all comes to fruition. At full staffing and that average per employee, this will generate $676 Million dollars of wages paid per year.
The economic boost for the area, as well as the state, is almost beyond comprehension.
Its impact on other businesses will be mixed. Some will benefit significantly whiles others may be threatened. Inflation may be at a higher rate in S.E Wisconsin than elsewhere given the stimulus by Foxconn. This has the earmarks of the classic double-edge sword. It will obviously be a great thing for many. But, it may have a different impact on many others.
For example, the additional spendable income will boost the retail sector, will likely cause a bit of a housing boom given new workers coming to the area, and will help area merchants gain a leg up. Simultaneously, or very nearly, the impact of wage increases, etc. will trickle down and impact other employers. Some skill sets will become much more difficult to find and the costs for those available will likely increase more quickly than had been anticipated.
Public facilities, schools included, will begin to seem too small. Police and fire organizations will need to be increased quickly to stay abreast of the population increases. Educational institutions will be adding space and courses to support the near-term needs. Transportation capacities may be reached considerably sooner than had originally been thought when those were designed and constructed. For example, Project Superintendents have been “scarce as hen’s teeth” and the newly expanding demand likely will cause further disruption in that area.
There will be a ‘ripple effect’ and it will be felt throughout S.E. Wisconsin and Northern Illinois. The increased demand will probably spur migration of various skillsets to this area. Other skillsets will simply become very difficult to locate and hire, and thus those costs will increase.
If you are about to expand staff or think you’ll need to do so, beginning that process sooner rather than later would seem to be wise.