It’s become a fairly common game in business to extract public dollars in exchange for creating additional jobs, but in Wisconsin, Ashley Furniture is getting $6 million from the state in exchange for laying people off.
According to the Milwaukee State Journal, the $6 million tax credit was awarded in January to the company in a closed-door session of the Wisconsin Economic Development Corp. In a memo obtained by the newspaper, the strings attached to the tax break allow the company to cut 1,900 jobs at the plant in Arcadia, a small town southwest of Wabasha.
The $6 million would pay for the relocation of Meyers Valley Creek, which flooded downtown Arcadia and the Ashley plant in 2010, allowing for a 480,000-square-foot expansion to reconfigure and change the layout of production lines.
The memo said the company would agree to retain 70 percent of its existing employee positions in 2014, 60 percent in 2015 and 50 percent in 2016-18. If it reduced its workforce by more, the state could reclaim the tax credits under what is known as a “clawback” provision.
“I, just as previous administrations, want to make sure they (Ashley) are here in Wisconsin and they’re growing,” Gov. Scott Walker told the paper. “My guess is a year from now, you’ll see Ashley in the state with a much higher volume of jobs than they have today.”
But another board member said it should be creating jobs, not presiding over the elimination of them.
About half of the workers at the furniture company make less than $10.88 an hour.