Brian McClung’s @mnforward “job provider” @target Cuts Jobs

This one time (last night) I sent out the following tweet about Brian McClung’s work at the corporate welfare campaign fund, Minnesota Forward:

@edkohler @bmcclung tweet

Which, to me, is the kind of thing that isn’t really disputable. Stating what, as far as I can tell, is a non-contestable fact for companies such as those who fund Minnesota Forward.

It turns out that there was a contester of my tweet by the name of Kris Jensen:

@krisjensen @edkohler tweet

Kris brings up a good point. If our local corporations paid less in taxes, surely they’d spend at least some of that money to hire more employees.

Right?

It’s a theory.

They could also kick the savings to shareholders. That’s a perfectly rational thing for a corporation to do, since the company is owned by shareholders. Which gets back to my original point: it seems like the companies funding MN Forward are more likely to reward shareholder than increase Minnesota’s workforce if they were to effectively help elect Tom Emmer. (You know, the anti-gay equality guy who has a habit of drinking and driving, and later tried to loosen DWI laws.).

(BTW, if you want to see the entire exchange Kris and I had, click here and read from the bottom up.)

A MN Forward Job Destruction Example

Let’s use Target Corporation as an example. Why? Because when they’re not busy supporting fighting against gay marriage, they’re increasing revenues for shareholders rather than being Minnesota’s “job providers”.

I took a look at Target Corporation’s revenue and employee count and found out that their revenues over the past few years have been:

2007 – $63,367,000,000
2008 – $64,948,000,000
2009 – $65,357,000,000

There are a lot of digits at play above, so to be clear, those are sixties in the billions, and growing. That’s impressive, and very awesome. It’s great to see a local company kicking so much butt.

Now, here is the employee count over the same period:

2007 – 366,000
2008 – 351,000
2009 – 351,000

That’s interesting. It’s almost as if Target brought in more revenue in 2009 than in did in 2007, and did so with 14,000 less people on their payroll. That’s an impressive feat for their CEO, and it’s ABSOLUTELY NOT what I’d describe as “job providers”. But, if you’re Brian McClung, and your job is to pimping your Minnesota Forward sugar daddies, the term “job providers” may refer to corporations who make more money while cutting staff.

What if we take Target’s revenue and divide it by the number of people Target has employed in 2007-2009? Here’s what that looks like:

Target Corporation's Gross Revenue Per Employee

Here’s what that chart says to me.

Between 2007 and 2008 Target increase their revenue by around $1.5 billion year over year while simultaneously reducing their workforce by 14,000.

Between 2008 and 2009, Target increased their revenue by around $400 million year over year without increasing their workforce by even one person.

So, two years later, their workforce is smaller while the company is bringing in nearly $2 billion in additional revenue.

Shareholders should be pleased.

Now, back to Brian McClung and MN Forward’s twisted talking points. Brian McClung said that MN Forward represents “job providers”. How so? It sure seems that this MN Forward funder is better at creating shareholder value than Minnesota jobs.

In case things weren’t clear above, here’s another pass. Here’s Target’s revenues over the past three years:

target_corporation_revenues

And here’s Target’s employee count over the past three years:

target_corporation_employees_by_year

One chart is up and to the right and one is down and to the right. It doesn’t seem like this correlates with the “job providers” talking point Brian McClung blabbers on about for a paycheck.

Back on August 24th, I talked about how startups are more likely create jobs with additional funds than MN Forward’s funders. The above example is illustrative of the fact that there is no guarantee that Brian McClung’s MN Forward sugar daddies would turn corporate tax savings into new jobs in Minnesota.

Target appears to be doing exactly what it should do as a shareholder owned corporation: generating more revenue with fewer employees. That’s good business for a publicly traded company. Target has no incentive to turn increased revenues into increased jobs, but they do have an incentive to turn increased revenue over to shareholders.

Which leads me to believe that Brian McClung’s MN Forward is a tad bit dishonest with their framing.

This all being said, if MN Forward’s funders were willing to pledge to hire employees in Minnesota at levels that would balance out the corporate tax cuts they’re hoping for under an Emmer administration, I may be willing to take them serious. If that’s what Brian McClung is really getting at, I’d love to see it in writing on MN Forward’s website.

Back to Kris Jensen’s tweet: Funding of startups creates jobs since startups are in a position where they have a lot more work than they can handle. In the case of MN Forward’s funders, a case can certainly be made that people funding Emmer’s TV advertising are creating jobs, although they’re primary focus is to create a return on capital rather than job creation (illustrated above using Target’s financials).

In cases of well established companies who’ve reached a point in their lifespan where they’re now capable of creating more with less (good for shareholders) cutting their state corporate tax rate does not seem like an effective job creation tactic, since they’re more likely to turn over excess revenue to shareholders than create additional jobs with the cash.

Which leads me to believe that Brian McClung either doesn’t know what he’s talking about, or is intentionally misleading people for money.

If MN Forward’s backers, including Target, can lay out a case explaining how they’ll create enough jobs to offset the revenue losses from the cuts from corporate taxes that they’re pushing for, I’ll back them. In fact, what candidate wouldn’t back tax cut policies that create jobs at a level that actually generates more revenue than is lost from the tax cuts? Clearly, that would be the easiest thing to do, politically, so if it actually worked, politicians would be doing it all the time and there would be no need for groups like MN Forward to spend hundreds of thousands of dollars on elections.

That leads me to believe that Brian McClung isn’t being entirely honest with us. Brian, set the record straight. Are you being paid to mislead us? Do you not understand what you’re being paid to do? Or, is this some sort of fuzzy math?

4 thoughts on “Brian McClung’s @mnforward “job provider” @target Cuts Jobs”

  1. “If MN Forward’s backers, including Target, can lay out a case explaining how they’ll create enough jobs to offset the revenue losses from the cuts from corporate taxes that they’re pushing for, I’ll back them.”

    Sort of off-subject, but Pawlenty’s going to have similar problems to Romney in ’08: running against your state’s liberal-ness. You can’t campaign on the strengths of Minnesota’s economy, but then turn around and praise Mississippi-like tax systems. This creates a huge disconnect — when you look at the quality of life and tax structure and concentration of Fortune 500 businesses in Minnesota (or Massachusetts) and then yearn for a low-tax, low-service regime, voters get confused because it makes no freaking sense.

    Ignoring oil oligopolies or car-industry states, it looks like GOP policies — as usual — try to enrich high income folks at all costs, rather than focusing on actual free markets. That’s why states w/ adequate revenue reap the benefits of such a system –> http://tinyurl.com/2d5q7q7 Debating McClung, while admirable, ignores his bad faith.

  2. To be fair (and, according to the numbers you cited), they “provided” 351,000 jobs in 2009.

    They may not be “job increasers” but they are most certainly “job providers.” Calling them such is very accurate.

  3. @Apathetic Observer, fair point. To me, this illustrates that the companies funding MN Forward are not the pro-jobs companies Brian McClung would like you to believe that they are.

  4. Not only has the amount of employees decreased, but I would be willing to bet the number of hours given to the employees they do have has decreased as well. I’ve watched first-hand at my own company people saying “We need to cut hours because we just aren’t making goal” and then turning around and praising this year’s record profits. I’m certainly not seeing those profits. “Job providing” doesn’t do a whole lot of good if someone needs multiple jobs provided to them just to put food on their table.

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