Businesses Need to Hire More Low Income Candidates, Says State

The city has apparently not been in compliance with a loan program offered through the state's Community Development Block Grant program(CDBG), and the requirements have some concerned over its impact.

A letter from the Wisconsin State Department of Administration to the city said that to continue to be eligible for the low income loans through its CDBG program, it would need to require at least 51 percent of candidates for jobs created to be lower to middle income (LMI) earners, and that these candidates be given "first consideration" for them. The revolving loan program is designed to encourage job creation for businesses as they expand.

In addition, requirements state that businesses that borrow money for job creation must document that their hiring practices would result in 51 percent LMI persons being hired for such positions.

Jeff Muenkel, Community Development Director, explained the need to include these requirements in their procedures when the city is approached by businesses during the Community Development Authority meeting last week.

For example, a company may borrow money to help create jobs during an expansion of the company or the acquisition of new equipment under this program as long as the percentage of jobs offered, candidates interviewed, and ultimately hired, represent 51 percent as lower or middle income. The position itself also must fall within the LMI category. The definition of LMI is 80 percent of the city's current median household income, which equals just under $66,000 (US Census, 2010; 5-year average 2006-2010).

The reaction from Community Development Authority members was confusion, as many felt the program requirements would make businesses reluctant to participate.

"I guess I appreciate the spirit of these requirements," said Aldermann Rob Glazier, "but I think that it probably makes this loan program unworkable."

Member Bob Mueller was more direct in his criticism, saying "If I'm a business and I contact Jeff (Muenkel), he has to tell me about these changes. I'm going to think he's lost his marbles."

The CDA felt the requirements would either mean that LMI candidates hired may not receive raises during the term of the loan in order to keep them within the income limits, or that the program would no longer be of any interest to Muskego businesses.

However, Chela O'Connor, Financial Resources Manager for the Wisconsin Economic Development Corporation, told Muskego Patch that the CDA's concerns were unfounded.

"The LMI requirement applies to the time of the interview, not going forward, so businesses don't have to worry about defaulting under these terms," she said. 

Muenkel said the clarification was welcome news, but that concerns remain over the program's requirement to keep the position as LMI, if not the wage of the person in it. O'Connor clarified that only if the position turns over in the first two years of its creation would it have to remain in that category.

However, business owners scoffed at the requirements, seeming to side with the CDA's reaction.

"The requirements by the government for this program presents yet another reason we never get involved with public sector agencies," said Phil Ziegler, CEO of InPro Corp in Muskego.

"InPro is proud to be an equal opportunity employer.  We don't care about gender, ethnicity, religion, nationality, income level, etc., etc.  All we care about is bringing on board the best qualified individuals, period. Why would they think that people of various income levels should be considered differently for the same position.  To me, that's highly discriminatory."