Background
Recently, Foxccon Technology Group announced its intention to build an assembly plant in Racine City. According to its schematic plan, the company seeks to construct a dozen buildings in two phases that will comprise of offices, parking ramps, and a cafeteria on the land near the border of Kenosha and Racine counties in January 2019. The company’s plans had gathered no attention in the state until last year mid-June when President Donald Trump hinted about a project involving the Taiwanese organization. It is believed that the project will have significant economic implications to the county. It is also imperative to note that the potential impacts of Foxconn on the Wisconsin economy are diverse (Elving, 2017). While the implementation of the project is expected to create potential benefits for the county, it may create some undesirable effects altogether. For this reason, this paper seeks to establish and analyze the economics of decision surrounding the Foxconn facility in the Racine County with an application of ethical issues surrounding the matter.
Imperatively, the decision to implement the project was guided by the fact that the project promises great benefits for the people of Racine. Firstly, the investment is expected to create up to 13,000 new jobs (Stein, 2017). Indeed, this is a transformational project for not only the residents of the county but the entire economy as well. As such, the government also stands to benefit from the large tax revenues that will be collected from the company once the project is fully implemented. According to an analysis by the Madison State Journal, the Foxconn plant could add up to $51 billion to the Wisconsin economy over a period of 15 years (Analysis Foxconn, 2018). In turn, this would substantially boost the region’s gross domestic product. In addition, the Metropolitan Milwaukee Association of Commerce estimates an average of $3.4 billion annually as gross domestic product for the county from the project (Romell, 2018). In this regard, one may argue that the government pushed for the development project with the view that the economy of the county will benefit substantially in the form of job opportunities for its residents and revenue for itself.
Also, it is imperative to note that the government’s decision to give the company huge taxpayer subsidies is undesirable from the economic and social point of view. Mainly, this is due to the fact that the company is already a huge corporation that amasses billions of shillings from its operations and obtains super-profits. For this reason, the company did not need the assistance of the government for it to set up the multibillion projects. Instead, the subsidies could have been directed to other small local companies that are struggling to survive within the state. In this respect, one may argue that the state did not conduct a complete and thorough economic analysis of the implications of its actions to appropriate the subsidies to the already big foreign corporation.
Benefits of the Foxconn Project in Racine County
Despite the obvious benefits that the project may have to the Racine County, residents are opposed to the project. Mainly, this is due to the fact that the project is associated with multiple issues and irregularities. For starters, the local agreement with Foxconn provides an unusual series of safeguards against failure. The safeguards include guaranteed property tax payments by the company to the state government. In addition, the company offers a big financial cushion to the county in the event of failure. There is also the aspect of land being held as collateral by the taxpayers and triggers to block incentives by the Taiwanese company in the event that the deal goes sore. Indeed, the conditions surrounding the deal indicate that under the best circumstances will be a wonderful project for the state. However, under the worst circumstances, the risks are insatiable. At this point one is inclined that the government allowed for the implementation of the project with the expectation that the project will be successful, and even in the event that the project fails, then sufficient measures have been instigated to reduce the risks and negative impacts.
When carefully analyzed and scrutinized, one notes that the project is associated with multiple controversies and ethical considerations. To be specific, the residents around the region where there the firm is expected to set up the project were notified of the fact that a blighting would take place against their properties in the land acquisition process by Foxconn. By the time the notice was issued, most of these homeowners had not agreed to let go their land for purposes of the development (Godmuls, 2018). Yet, their lands have been condemned through blighting and people would lose their properties. Indeed, this raises ethical concerns on the process taken by the Taiwanese company to obtain land for its new development. According to the Mount Pleasant Village Code of Ethics, any public official who knowingly acts in excess of their legal authority and official capacity commits an misconduct in the office (Xinhua, 2018). In turn, this suggests that members of the community who casts their vote to impose the condemnation of the local’s properties knowingly violated the state’s ethical laws.
Aside from the unethical and forceful nature used to obtain land of the project, the residents of the region are opposed to the project due to the fact that the project is associated with several other problems. Specifically, the community of Racine believes that the state has overstepped and violated the rights of its people when it granted the Taiwanese company special rights to corporate interests. They are further saddened by the fact that the project would bring about a destruction of multi-generational farms and a well and long established community (Burke, 2017). Indeed, one may argue that the county government has crossed significant social and ethical lines simply because the company promises some revenue. One may also be inclined to argue that the approval of the project was guided by political interests of the authorities in charge instead of rational economic considerations.
Undesirable Impacts of the Foxconn Project
What is even more frustrating to the residents of Racine is the fact the state government has loosened the environmental protection rules for the company to be able to set up its operations more comfortably within the state. Precisely, the state government now permits heavy metal water pollution from the company (Bergquist, 2017). Environmental protection is a major issue all over the world, and allowing the company to pollute the city’s water would have significant effects to the health of the residents as well as their animals. Thus, the authority’s decision is fundamentally wrong in the realms of social welfare, ethical and economical decision making.
Conclusion
All in all, all factors taken into consideration, the Foxconn Project in Racine County has raised multiple concerns about the social, economic, and ethical considerations that were accounted for in the decision making process. Although the project is expected to bring about significant economic benefits to the people and the government, it is associated with multiple risks and disadvantages as a whole. The benefits arising from the controversial development will include a significant number of job opportunities for the local people and a substantially high amount of government revenue for the government over a span of 15 years. However, the risks and disadvantages associated with it are overwhelming for the Racine community. Specifically, it is associated with the theft of local’s land, environmental pollution, slave labour wages and unnecessary tax payer subsidies. Therefore, one may argue that the overall decision making process was steered mainly by political interests instead of ethical and economical considerations.
References
Analysis: Foxconn plant could add $51B to Wisconsin economy over 15 years. (2018). Wisconsin State Journal. Retrieved 26 April 2018, from https://host.madison.com/wsj/business/analysis-foxconn-plant-could-add-b-to-wisconsin-economy-over/article_6287e7ad-d967-5487-927e-a757c07b3c56.html
Bergquist, L. (2017). Foxconn’s impact on Wisconsin will be closely watched by environmentalists. Journal Sentinel. Retrieved 26 April 2018, from https://www.jsonline.com/story/news/politics/2017/10/04/foxconns-impact-wisconsin-closely-watched-environmentalists/733113001/
Burke, M. (2017). How will Foxconn affect Racine County?. Journal Times. Retrieved 26 April 2018, from https://journaltimes.com/business/local/how-will-foxconn-affect-racine-county/article_9aaf5b5b-ed0e-551c-834b-62d72afb5084.html
Elving, E. (2017). What Foxconn Means for Wisconsin. Shephard Express. Retrieved 26 April 2018, from https://shepherdexpress.com/news/features/what-foxconn-means-for-wisconsin/#/questions
Godmulis, G. (2018). Village CDA Members Must Resign if They Vote To Blight Homeowners in Foxconn Zone. WordPress. Retrieved 26 April 2018, from https://concernedracinecountyresidentsjustsaynotofoxconn.wordpress.com/
Romell, R. (2018). Foxconn to begin by hiring hundreds of assembly workers in 2018. Journal Sentinel. Retrieved 26 April 2018, from https://www.jsonline.com/story/money/business/2017/12/01/foxconn-hiring-wisconsin-assembly-workers-2018-200-million-sales/911690001/
Stein, J. (2017). Foxconn growth could be staggering, but risks are real for Racine County, Wisconsin. Journal Sentinel. Retrieved 26 April 2018, from https://www.jsonline.com/story/news/politics/2017/10/09/foxconn-growth-could-staggering-but-risks-real-racine-county-wisconsin/737616001/
Xinhua, K. (2018). Controversial land acquisition hinders Foxconn project in U.S. Wisconsin. Xinhua Net. Retrieved 26 April 2018, from https://www.xinhuanet.com/english/2018-01/12/c_136889255.htm
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