WisBusiness: Milwaukee business pros see local investment as key to easing unemployment
By Kay Nolan
While not discounting the value of luring new companies to Wisconsin with public incentives, a team of business professionals says metro Milwaukee needs to invest in existing businesses, as well as fixing crumbling roads and poor academic outcomes in order to improve the employment picture.
"It's important if we want to have net growth, we can't just have new businesses and new employees -- we have to maintain what we have," said Dave Rotter, president and chief executive officer of National Ace Hardware, which runs two stores in the City of Milwaukee. Tax credits and other benefits for start-ups or businesses that move here shouldn't be at the expense of existing businesses because "existing businesses have a better chance of being around five years from now."
Rotter discussed the state of the Milwaukee-area economy yesterday at Milwaukee's Discovery World. Other panelists at the forum included: Rose Oswald Poels, president and CEO of the Wisconsin Bankers Association; Julia Taylor, president of the Greater Milwaukee Committee, a major sponsor of the Milwaukee 7 and other regional economic development initiatives; and William Holahan, professor, UW-Milwaukee economics department.
Holahan said businesses might come to Wisconsin if offered incentives, but won't stay unless infrastructure, such as roads and bridges are improved.
"The time to spend that money is during a recession, when you're already running a deficit. If you borrow the money to fix up that infrastructure during a recession, some very beneficial things happen," he said. "You employ otherwise unemployed workers and capital equipment and the companies that own them and would like to participate in the repairs. When the recession is over, it's ready to go."
Poels, whose trade association represents 271 financial institutions statewide, said that "over-regulation and over-zealousness is having a negative effect on the economy." "The regulators want to make sure that a bank's loan portfolio is properly diversified, so that if one sector of the economy breaks down, the bank doesn't fall down with that sector," said Poels. She acknowledged "if you haven't cash-flowed in the last two years, it will be difficult for you to get traditional financing 100 percent."
But Poels said banks "have a lot of liquidity" right now for both new and existing businesses hoping to expand. "We want to take that money and lend it back out to the community," she said, adding that the last thing banks want to do is turn down financing for businesses "with a good track record, but for the bump in the economy over the last three years."
"There's 30 different banks with over 140 offices just in the City of Milwaukee," she said. "Talk to a banker. Talk to more than one."
Taylor said economic development takes a long-term commitment, pointing to Akron, Ohio, where leaders worked to establish a polymer industry to replace jobs lost when tire-makers went overseas. But she said the Milwaukee area was well positioned for growth.
"When we're talking about jobs versus growth, we have to be concerned about where our jobs are at, in the community as well as throughout the region, but also, where's our growth strategy, because that's where ultimately, jobs come from," said Taylor. "Milwaukee's always had this great industrial heritage. We were just recognized in the Brookings (Institution) report as one of the top growth areas in the country, in the world, actually, because of having a strong industrial base here. And actually, we've had 2.4 percent job growth since 2011, which doesn't sound great, but in this economy, this is not bad."
Taylor referred to the Brookings Institution's recent study, "The State of Metropolitan America"
Taylor also said the Milwaukee area needs challenge schools to start early to prepare students with the needed skills. And she said local businesses could help by reviving once-common internships and school-to-work programs.
A number of Milwaukee Public School students from Ronald Reagan High School attended the forum, and Holahan urged them to master math and English composition. "Learn as much mathematics as you can," he said. "If someone has told you you're no good in math, talk to somebody else. If you struggle with it, take the highest level course that you're comfortable with, take it over again, and get an A."
"I'm still taking math courses," said Holahan, who has taught economics for 40 years. Mathematics is "really a language," he said, that is needed to succeed in many well-paying occupations.
The event was organized by UW-Milwaukee, WisBusiness.com and WUWM Milwaukee public radio, which is set to broadcast a major portion of the discussion at 10 a.m. Friday Jan. 27 on the "Lake Effect" program