Questionable Economic Impact Claims

Wisconsin Department of Tourism claims $321 million economic impact from Republican National Convention. 

As Center Square clarified:

Economists who have studied the impact of national party conventions says a report from the marketing firm Tourism Economics does not accurately reflect the actual impact of the 2024 Republican National Convention in Milwaukee.

Economist Victor Matheson of College of the Holy Cross has studied and written on national conventions and large events, He called the release, which claims the event had a $321.5 million impact, a “promotional booklet/press release, not a serious economic impact study.”

Center Square, in other economic impact reporting, further noted:

Economists say the numbers produced by the marketing group do not follow economic study principals and are not reputable. The numbers are used by politicians and state tourism departments to justify spending.

“Viewing what ‘economic impact’ consultants do to be economics is like considering horoscopes to be astronomy,” economist J.C. Bradbury of Georgia’s Kennesaw State University recently wrote. “Newspapers are smart enough to put horoscopes next to the comics and Dear Abby, while economic impact ‘studies’ get banner headlines on the front page.”

Bradbury noted economic impact analysis is not something real economists do and there is a reason that work is not presented at conferences or published in journals.  

Economic impact is often claimed surrounding publicly funded sports stadium projects or sporting events.

The annual tourism reports are paid for by state tourism departments and national tourism agencies.

Urban Milwaukee reported:

But when the Common Council discussed the RNC in September, it wasn’t as favorable.

“It didn’t trickle into the neighborhoods,” said Ald. Marina Dimitrijevic of the economic impact.

In an email to Dimitrijevic, LuLu Cafe & Bar owner Cameryne Roberts said the RNC didn’t result in a business boom. “For what it’s worth, the RNC was a complete bust for us and most of the other Bay View business owners I spoke with, not to mention those in other parts of town.” 

Alderwoman Milele A. Coggs asked for the final report to include a geographic breakdown and diversity data. “I just want us, as a council, in case we’re asked again to sign on to anything like this, to be aware of its impact. And where things might not have been how we wanted it to be, or we might not have achieved the goals we were going to achieve, that we recognize that and that we work differently in the future to better achieve those goals,” said Coggs. The final report does not include the breakdown requested.

Reports during the convention highlighted how many businesses outside of the hard security perimeter were seeing lackluster business. Across the month of July, sales tax revenue in Milwaukee was actually down year over year. But the state, which collects the revenue, does not collect data by week.

Per usual, many of these economic-impact no-brainers (conventions, stadiums, Olympics, etc.) which are touted to be win-wins for cities and states are anything but.  

Little Economic Impact From Stadium Projects

Report Finds Little Economic Impact From Stadium Projects

For Further Reading:

The Legalized Bribery That Is Sport Subsidization

It's A Scandal! It's A Outrage!

The Math and Taxes of Stadium Boondoggles

Big League Confusion

Brewing Up An Inflated Impact

Big League Broke

Bonds & Bondage: Indentured To The Sports Entertainment Cabal

Residency Requirements

Much (in the last year) talk about ending the residency requirement for City of Milwaukee (especially for police and firefighters) has been bandied about. Primarily by persons whose motives, and interest in this topic, are unclear. The residency requirement has been in place since 1930. Why is the state interfering with a City of Milwaukee employment policy?

Recently, Gary Kraeger, a Wind Lake appraiser, weighed in - The Principles Of The Residency Rule. He opines, "Milwaukee is everyone's business in the state, especially since Milwaukee is very dependent on state money [state aid to Milwaukee has actually plummeted]... On a third hand, Milwaukee is the fourth-poorest big city in America [not sure where this number comes from, Kraeger doesn't say], at last word, and I suspect it might move up a bit if we dump the residency rule. In which case, I expect Milwaukee to need even more of our money. On another hand, it sounds sensible that if you want taxpayers to pay your salary in a community, you should be one of them. In that way, if your compensation benefits from high taxation, at least you're pulling the cart, too. Also, normally you care more about the community you live in."

Kraeger states, "On principle, however, the residency rule should be lifted and lifted by Milwaukee itself." Um, yeah, so if it should be up to Milwaukee, why are so many people outside of Milwaukee concerning themselves with Milwaukee governance?

"The biggest hand of all is the principle of freedom," claims Kraeger. When it comes down to it, Americans should be able to do what they want, when they want, and where they want. No rules, no questions.

Kraeger continues on describing how removing the requirement could hurt property values in the City. So, he has laid out numerous economic examples of why the residency requirement is in place. Numerous reasons why it should be there. But he then concludes that it should be ended. Why? Freedom.

If the ultimate rationale for an argument one poses is "freedom," one really doesn't have much of an argument or a rationale.

The residency requirement is a pretty simple, straight-forward policy - as a public worker, you should live in the city that employs you. The economic idea of "leakage" is addressed by such a policy. Much of the dollars earned by these public employees will be spent back within the community. Which also addresses the economic multiplier effect - money earned and spent in the same area, thus percolating and rippling throughout the local economy, over and over. As opposed to City of Milwaukee tax dollars funding a Milwaukee Police Officer who now lives in Waukesha and spends most of his/her money there.

There are 2,697 City of Milwaukee fire and police employees. The average police employee earns $65,649; for fire it's $67,554. This a potential $177 million dollars of earnings "leaking" out of the city, including property taxes, sales taxes, and other spending.

The possible loss of property taxes, spending at local businesses, and neighborhood stability are more than sufficient reasons for maintaining the requirement. The economics behind the requirement make it a no-brainer.

Governing is a set of rules. If you want to live or participate in certain communities you have to follow their rules. Some subdivisions make homeowners have 5-acre lots. Others require certain facades or materials be similar amongst the homes. If you don't like those rules, you go somewhere else. That's freedom. Freedom isn't doing away with things one doesn't like.