Flagging Wisconsin - And Harley - Economy Dogs Scott Walker in 2016 Race

By Naureen Khan, Al Jazeera America

17 August 15

Critics say Walker got lost in political fights and could not lift working-class fortunes

he engines that power Wisconsin-based Harley-Davidson motorcycles — the favored ride of 2016 presidential contender Gov. Scott Walker — roll methodically along the assembly line here in this cavernous 900,000-square-foot plant on the outskirts of Milwaukee.

Nearly 1,000 employees at the factory on Pilgrim Road work in shifts around the clock amid the steady roar of machinery to piece together the essential components that are subsequently housed in the Touring, Softail, Dyna and Sportster models.

As workers enter the facility, they pass beneath a sign that reads: “The employees that walk through the door are the most valuable assets that we have.”

But in recent years, longtime Harley-Davidson factory workers say, they have felt less valued by the company and increasingly pinched by a 21st century economy consumed with cost cutting and profit maximizing — one that Walker has presided over in the state for the last four years. 

The trouble began in 2010, when Harley-Davidson, undergoing a company-wide restructuring in the midst of the recession, threatened to move production out of Wisconsin unless the workforce agreed to steep concessions in its union contract.

Provisions included a seven-year wage freeze, increased contributions to employee health plans, layoffs at multiple Harley-Davidson facilities and the use of more lower-paid seasonal employees to do the same jobs as full-time workers without benefits.

“It was a take it or leave it, and you had no right to strike,” said Mike Masic, a former president of the local United Steelworkers chapter, which represented workers during the fraught negotiation process. “Did people like it? Of course they didn’t, and it’s not fair to do, because Harley-Davidson makes profits year after year but employees were forced to pay more and more for their health benefits.”

Walker, a Republican, picked up his Harley habit in 2003, when he was tasked to lead a parade on one in Milwaukee as county executive. He practiced in the parking lot of the Milwaukee Brewers’ baseball stadium until he got the hang of it. Since then, he has not only become an avid hobbyist, getting his first Harley Road King as a present from his wife, Tonette Walker, in 2008, but has also made riding hogs a part of his political brand, tapping into a conservative, everyman biker culture evocative of Americana and a passion for personal freedom.

“I’m guy with a wife and two kids and a Harley,” Walker said in his closing statement at a GOP presidential debate in Cleveland earlier this month. “One article called me ‘aggressively normal.’”

But the continued financial pressures on the workers who manufacture these beloved machines may be an illustration of Walker’s biggest hurdle as he campaigns for his party’s nomination and the White House: an economy that, some argue, has failed to boost the fortunes of middle-class Wisconsinites.

Harley-Davidson workers in Milwaukee interviewed by Al Jazeera America, who declined to give their names because of fear of reprisal from their employer, said that even as the company has rebounded from the recession, reporting $885 million in income in 2014, conditions have continued to deteriorate for employees.

“It went from somewhat good relationships with the company to very awful, the bottom of the barrel,” said one machinist who has worked at Pilgrim Road for two decades. “We lost a lot of insurance, we lost vacation time, we lost pay, we had layoffs, and a lot of the retirement benefits that were a mainstay were totally stripped … and the union has been weakened to a point of nonexistence.”

Maripat Blankenheim, Harley-Davidson's director of corporate communications, said in a statement that the 2010 contract improved efficiency in Milwaukee and has helped keep the company competitive and profitable. 

"The contract Harley-Davidson signed with the company’s Wisconsin-based represented employees in 2010 was a significant step toward our current flexible production system, which helps us produce and deliver motorcycle models that customers want, when they want them," she said. "The contract also included an extremely competitive compensation package while providing the cost-competitiveness needed to succeed as a U.S. manufacturer in a global economy."

Masic, now retired after 21 years at the Pilgrim Road factory, too noted that there are few alternatives for workers looking for good jobs with decent wages in the flagging Wisconsin labor market.

“You have to look at the whole picture. Where are you going to get a job that replaces one like that?” he said. “You have disposable income, and you’re making more than most places in Milwaukee.”

The broader trends that have ensured smaller paychecks and less job stability for Harley-Davidson employees and Wisconsin workers overall are bigger than Walker and predate his tenure, but his fiercest critics say the two-term governor should be held accountable for leaving those structural challenges unaddressed.

“We got a governor that likes to tout his record,” Masic said, offering one such perspective. “But if anybody came in and took a good close look, I don’t think he’s accomplishing everything he’s saying.”

As Walker campaigns for president, most assessments of his stewardship of the economy devolve into a partisan parsing of statistics.

The governor’s detractors note that his policies of cutting taxes, giving subsidies to firms through the troubled Wisconsin Economic Development Corp. and slashing government spending — most prominently through Act 10, the 2011 budget repair bill that ended collective bargaining for public sector unions and prompted weeks of turbulent protests at the state Capitol — have failed to produce tangible benefits.

At the end of his first term in office, Wisconsin ranked 35th in the nation for private-sector job growth and in the middle of the pack — in a four-way tie for 21st — for private-sector wage growth, according to data from the Bureau of Labor Statistics.

More glaringly, Walker repeatedly vowed during his 2010 gubernatorial campaign to create 250,000 private-sector jobs and challenged voters to hold him to it. His administration made it only a little more than halfway to that goal, with 131,000 jobs created in Wisconsin in his first four years in office.

A study released earlier this year from the Pew Charitable Trusts found long-simmering trouble for Wisconsin’s middle class: from 2000 to 2013, the percentage of households making 67 percent to 200 percent of the state’s median income dropped from 54.6 percent to 48.9 percent — the biggest drop for any state in the nation. In those years, the median income itself dropped 14 percent.

Abdur Chowdury, an economist at Marquette University, said the numbers reflect long-standing deficiencies with Wisconsin’s old-fashioned industrial economy. Although manufacturing continues to reign supreme in the state — and pays better on average than service-sector jobs that are proliferating at an even more rapid clip in the rest of the nation — Wisconsin is heavily reliant on old, slow-growth sectors, like printing, paper manufacturing and metal casting that are in far less demand and facing increased competition from around the globe. Firms feeling the crunch, like Harley-Davidson, inevitably pass those burdens onto their workers. Meanwhile, high-demand, high-growth industries that are believed to be the wave of the future such as information technology, life sciences and biotechnology have failed to fully take off in the state.

“We do need to diversify the Wisconsin economy. We need to attract new types of businesses. But that hasn’t happened,” Chowdury said. “I would say the main thing that is lacking in Wisconsin is infrastructure. We have not invested in infrastructure — roads and highways, for example, IT infrastructure — to attract those kinds of businesses and the highly skilled workforce.”

John Torinus, a Milwaukee businessman and venture capitalist, takes a measured view of Wisconsin’s economic woes, noting that such problems have persisted for decades, no matter which party was in power.

“This is not particularly a Walker problem, it’s a Wisconsin problem, and it stems from the fact that manufacturing no longer provides the job growth that it used to do,” he said. “We’re a lagging state, relative to the country.”

But Torinus, while praising Walker for streamlining the regulatory environment, lowering tax rates and taking on tort reform, said the administration easily lost its focus on economic growth and became bogged down in political battles.

“During the campaign, it was jobs, jobs, jobs, jobs, and then they got into office, they’re doing politics, politics, politics,” he said. “I think the energies of the Walker administration went more toward political laws that involved the unions. That was the their highest priority. If you look at the legislative landscape, there was largely legislation that was more politically oriented than job-growth oriented.”

The Walker campaign and his supporters are urging voters to consider a different set of metrics. He notes that the unemployment rate in Wisconsin has plummeted from 8.1 percent the month before he took office to 4.6 percent today. Wisconsin’s labor force participation rate — the percentage of people over 16 in the workforce — outpaces the national average, as does income growth per capita.

“The overriding measure is, ‘Are we producing family-supporting jobs? Are we providing opportunities for our citizens in Wisconsin? Are we creating careers?’ And I think the answer is yes,” said Kurt Bauer, the president and CEO of Wisconsin Manufacturers and Commerce, the state’s Chamber of Commerce, which has lauded many of Walker’s moves for creating a friendlier climate for business.

“What I have said — and I’ll stand by this — if you find me somebody who’s willing to work, who’s drug-free, who’s willing to get some training and is willing to relocate an hour or more from where they currently live, I will find them a job that pays them $14 an hour,” Bauer said.

That seems to provide little solace for Harley-Davidson workers, who have seen their paychecks and their standing in the company shrink. “They just treat us differently,” one said during a five-minute break outside the plant. “They treat us like we’re just numbers.”

Gary Chaison, a professor of industrial relations at Clark University, said it’s possible that Harley-Davidson employees, like manufacturing workers around the rest of the country, will fight to get back the wages and benefits they lost in the midst of recession now that U.S. firms are on much firmer financial footing. But once agreed to, concessions are difficult to reverse.

He said, “Some unions are saying, ‘We don’t want to be the senior partners in failure and the junior partners in success. We want to restore what we gave up in the past. The company survived hard times because of our sacrifices. They were emergency stopgaps, and now it’s time to give us wages and benefits back.’”

Others worry, however, that the right-to-work legislation signed by Walker in March that makes union dues voluntary in Wisconsin, will further weaken the workforce’s hand when their contract expires in 2019.

“Unions are good. Unions are the reason why some jobs pay better than others. It’s because we bargain for it. We spend our money for the greater good for the people. We want good paying jobs and wages for all workers,” said a union member who has worked at Harley-Davidson for over a decade. “It’s a tough pill to swallow.”

The member noted too that there is a certain irony to Walker’s using the union-made Harley-Davidson as an emblem of his take-no-prisoners politics.

“I wish he could recognize that he’s sitting on a union-made ride. It’s got the union logo on the frame,” the member said. “So, you know, that’s what I would like. I would like him to just acknowledge that.”