Walker’s Workforce Development Debacle

By Robert Miranda, Wisconsin Spanish Journal

February 4, 2016

Scott Walker has named yet another Secretary of Workforce Development, replacing Reggie Newson (http://www.jsonline.com/business/reggie22-b99656310z1-366121901.html). This is the third Secretary of Worforce Development since Secretary Manny Perez resigned in May 2011.

Before Secretary Perez left DWD, Wisconsin’s employment ranking was 17th in the nation. Since then, Wisconsin has dropped to 34th, according to the latest job report.

So, what happened at the Department of Workforce Development?

The DWD suffers from untrained and unqualified leadership being placed at the helm of the organization for political expediency. The difference between Secretary Perez and every DWD appointee after him, is that Perez has had private sector employment development experience, actual knowledge, and proven ability to achieve results; he understands the needs of business and workers and he cared for the wellbeing of Wisconsin.

Secretary Newson replaced Scott Baumback after it became fairly clear that there was a questionable relationship between him and Division Administrator Allison Rozek on October 2011. https://hngwiusa.wordpress.com/2014/10/30/keth-gilkes-governor-walkers-chief-of-staff-in-2011-knew-about-baumbach-and-rozeks-inappropriate-relationship/

This occurred after emails from Rozek were made public in which she revealed her “current relationship” with Atty. Scott Baumback, a revelation made after she had “filed” a harassment complaint against Secretary Perez. Her allegations against Perez were never filed and DWD sources say there was no harassment by Perez.

After some time elapsed, sources at DWD tell me that the harassment accusation against Perez was nothing more than dirty politics being played and that the governor did not do right for himself or Wisconsin accepting Perez’ resignation even though in that short period of time Perez achieved extraordinary workforce development results. In fact, sources at DWD tell me that Perez was strongly opposed to any employee having inappropriate relationships.

Since Secretary Perez’ departure from DWD, each Walker appointee at the Department of Workforce Development has failed, causing a great deal of damage to Wisconsin’s economy and Walker’s reputation and credibility.

Certainly, Walker’s abandonment of his promise to create 250,000 jobs is fresh in people’s minds. The inexperienced Secretary Newson replaced Scott Baumback after it became clear that there was a questionable relationship between him and Division Administrator Allison Rozek in October 2011.

The newly appointed Secretary of DWD, Ray Allen, has 18 years of experience in the Department of Financial Institutions and hence has no workforce development experience. Is he being brought in to clean up a financial mess, or to advance workforce development?

It is widely recognized that, in accepting Secretary Perez resignation, Walker shot himself in the foot. Sources very close to the Secretary’s office at DWD indicate that Secretary Perez “did in 5 months” more than had been done at DWD in the 5 years since his departure.

What did Perez do? First, Perez implemented a very robust system of financial controls and checks that require agency wide approval. He also deployed a system of internal audit procedures agency wide as a preventive measure to ensure compliance at all times. Furthermore, in 5 months under Secretary Perez’ leadership, the Wisconsin job ranking moved from 20th at the end of Doyle’s term to 17th.

Wisconsin placed an average of 6000–7000 workers per month for 24,000 jobs in just 4 months with worker wages starting to increase. In fact, in 5 months under Secretary Perez’ guidance, DWD placed the same number of workers that DWD placed in 12 months from 2014 to 2015. The December 2015 jobs reports cites, “Wisconsin added a statistically significant 23,600 private sector jobs from December 2014 to December 2015.”

Sources tell me that Secretary Perez aligned the labor market to economic development and that he had the confidence of Workforce and Economic Development Directors statewide. This is significant because most of the directors had democratic leanings at the time.

Sources also say that Secretary Perez was well on the way to making DWD help achieve the 250,000 jobs promised by Walker. But Walker let him go.

Perez Arrives At Esperanza Unida

When I was hired to be Director of Esperanza Unida, I took on the challenge to restore a financially ruined agency. With over $750,000 in illegal loan debt, in addition to toxic debt of over $250,000 in expenses and another $500,000 in restoration and repairs needed at the two Esperanza Unida facilities, I implemented a plan that would have infused much needed revenue to the agency. The plan was an international manufacturing trade, job creation and training agreement between Esperanza Unida, MATC, Bucyrus International corporation and the country of Turkey.

The effort however was defeated by so-called progressive members of the Milwaukee Area Technical College (MATC) Board of Directors led by labor lawyer Peter Earle and former State Representative Pedro Colon with the help of Voces de la Frontera Director, Christine Neumann Ortiz in 2007. http://www.milwaukeerenaissance.com/PeaceOfMind/EsperanzaUnida

For several years, the agency struggled to stay afloat. In 2012, I had the opportunity to see Secretary Perez in action when I hired him to restructure the agency. After he confirmed that the organization’s board prior to my arrival had taken inappropriate loans using the 611 West National Building and 1329 West National Building as collateral, he went to work with the City of Milwaukee and the Federal Government to correct this situation, but conditions were not conducive.

Secretary Perez improved the 611 Building, found a buyer (Keystone Development), collaborated with the City of Milwaukee and the Federal Government EDA to allow a foreclosure of the building and perform an inmediate sell to the buyer. This saved the City of Milwaukee $700,000 in federal penalties and extinguished the $1.3 million in debt associated with the building. To derail Perez’ efforts at Esperanza Unida, Irene Correa made false allegations of harassment against Perez. Perez took her to court where her allegations were found to be baseless and were dismissed.

DWD - WEDC Pattern of Failure

Scott Walker has a habit of appointing people to key positions who are unqualified for the job and then blaming them for the failures of the agency. He also consults with people who appear to be his “friends,” but who feed him bad advice.

Examples of these are Mike Huesbch who – with Walker’s approval - pressed former Wisconsin Economic Development Corporation (WEDC) CEO Paul Jadin to give fraudulent loans to a company. There are those in Madison who say that, as soon as Jadin left WEDC and Perez left DWD, Wisconsin’s jobs future went with them.

Tim Murray basically destroyed WEDC. Former WEDC CEO Reed Hall had no knowledge of economic development. Marc Hogan, the new WEDC CEO, has no economic development experience.

Keith Gilkes, sources in Madison say, was a very bad Chief of Staff.

Scott Baumbach, Reggie Newson, and Georgia Maxwell at DWD are said to not have a basic understanding of or relevant experience with labor markets.

Of course when things go awry, Walker blames the agency or the Secretary in a feeble attempt to misinform the public, when in fact he himself is responsible for what happens under his watch.

My suggestion? Scott Walker do yourself and the people of Wisconsin a favor, consult and accept guidance from those people – such as Secretary Perez and many others - who have both the knowledge and successful experience in their field of expertise.

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Last edited by Tyler Schuster.   Page last modified on February 04, 2016

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