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• Employers must get your permission before they use a third-party company to run a background check. 
• Employers can use your credit history to make employment decisions, but experts say it’s important to know your rights. 
• If there’s false or inaccurate information on your credit report, notify the consumer reporting agency that generated the report. 
• Experts say you can protect yourself by checking your credit report annually and placing a freeze on your credit report to reduce the risk of identity theft.

When you apply for a job, you probably know that your potential employer will check your criminal record. But what about your credit history?

Employers in most states, including Wisconsin, are allowed to run background checks that show your debts, available credit and payment history. Wisconsin Watch asked experts what job seekers and employees should know about this process and their rights. 

We spoke to:

• Nick Raef, employment attorney at law firm Hawks Quindel. 
• Jeff Palkowski, state director of the Wisconsin State Council of the Society for Human Resources Management.
• Adriana Peguero, assistant city attorney for the city of Madison.

What kind of credit information can employers see?

Not all types of background reports show financial information. Those that do typically show your credit accounts, payment history, available credit, bankruptcies, liens and self-reported work history, NerdWallet reports.

The reports do not show your credit score, the three-digit number that lenders, landlords and insurers use to assess how creditworthy you are. They also don’t show your income, birth date, marital status or medical debts. 

Unlike when you apply for a credit card or a loan, this is a “soft inquiry,” meaning it won’t affect your credit score and it won’t be visible to other employers or lenders. 

Can an employer run a background check without my permission?

No. If employers want to use a third-party company to run a background check, they need written permission. That’s because of the Fair Credit Reporting Act, a 1970 federal law created to protect consumers from false information being included in their credit reports. The law requires that an employer provide “clear and conspicuous” notice in a stand-alone document. 

“That means that if they throw the language into the boilerplate of an application, or scribble it in the margins of the position description, or fail to get your consent before pulling the report, then they are in violation of the law,” Raef, the employment attorney, said in an email. The employer can run the background check only if the employee or job applicant signs the document.

If employers want to run a background check later, like if they’re considering you for a promotion, they have to get permission again.

“It’s not the case that if you’re hired by a company that five years later they can go back and use the same acceptance of disclosure from when you were hired,” Raef said.

Notably, the protections of the Fair Credit Reporting Act apply only when employers use another company to run the background check, not when employers use the Wisconsin Circuit Court Access Program (CCAP) or other tools to check a person’s history themselves.

Can an employer use my credit history to make employment decisions?

Yes, though additional restrictions apply in the city of Madison.

If employers see something in the report that makes them choose to take an “adverse action” about your employment (for example, fire, demote or simply not hire), they must give you a “pre-adverse action notice,” along with a copy of your background report, details about the Fair Credit Reporting Act and an explanation of your rights, including the right to dispute the accuracy of the report and get another free report within 60 days. 

“The notice must inform an individual that their decision was influenced by the report, but does not have to clarify what exactly within the report has led to the employer’s adverse decision,” Raef said. That, he said, can “leave individuals with little clarity as to the employer’s reasoning.” 

The employer must allow time for the employee or applicant to respond before sending a final notice indicating the action the employer took. 

Still, Raef said, employers might say they had other reasons for choosing a different candidate. 

“Employers have the leeway to base their decision on a multitude of factors,” Raef said. “Oftentimes it can be really hard to sort of draw out what exactly happened here, and that’s where an employment attorney can be really helpful.” 

In Madison, employers face stricter limits on how they can use credit history. That’s because credit history is one of the 30 characteristics denoted in the city’s equal opportunity ordinance, alongside homelessness, citizenship status, source of income and physical appearance. 

“We have a very large, expansive number of protected classes,” said Peguero, the assistant city attorney. 

Employers in Madison can make employment decisions based on credit history only if one of the following is true: 

• They can demonstrate that the person’s credit history is “substantially related” to the job.
• The job requires that the person be bonded and the person’s credit history makes them ineligible. Some jobs, especially ones that involve handling money, valuables or proprietary information, require that employees be covered by a fidelity bond that will reimburse the employer if the employee steals or commits fraud. (Note: The federal government operates a little-known alternative bonding program for people who might otherwise struggle to find work, including those with poor credit. You can learn more about that program here.)

The ordinance applies within the city, so it covers Madison employers. It’s less clear whether it would apply to the growing number of Madison residents who work remotely for employers based elsewhere, Peguero said.

“That analysis would have to be done by the hearing examiner, but it is possible it could extend to an employer that is outside of the city of Madison,” Peguero said.

Why do employers check credit? 

Employers may use credit history to assess how trustworthy or responsible a person is, Raef said. An employer may assume that an employee or applicant who has lots of debt, for example, may be more likely to commit fraud, embezzle funds or accept a bribe, especially if the person is in charge of company funds. 

But Raef questions whether credit reports are useful in most employment decisions. “There’s not clear evidence that credit history is an indicator of an employee’s capacity to perform well in their job,” Raef said, pointing to a 2012 study that found no correlation.

“Someone might have poor credit on paper because of a domestic abuse situation in their home, or because they were born into really unfortunate circumstances that don’t reflect on their ability to be a great employee,” Raef said.

He worries that credit checks will create a “toxic loop” where the people who most need jobs can’t get them, which only makes their financial situation worse.  

“I can see the employer’s side where there are limited and specific circumstances where these checks make sense, but as a broad application, I think that it leads to a lot of unfair employment practices and probably exacerbates existing biases that are systemic within our society,” Raef said. 

A 2023 report by the Urban Institute, a national think tank focused on economic and social policy, echoes those concerns. 

“Research suggests that workers with low wages are among those harmed by preemployment credit checks, in part because workers with low incomes are the most likely to have imperfect credit records,” the authors write, though they note there’s limited data on low-wage workers specifically.

How common is it for employers to run credit checks?

About half of U.S. employers conduct credit checks when hiring for at least some of their positions, according to a 2021 survey by the Professional Background Screening Association.   

Jeff Palkowski leads the Wisconsin State Council of the Society for Human Resources Management. He has worked in human resources in Wisconsin for more than 20 years, mostly in the public sector in Madison. The closest he’s come to an employment credit check was when a friend applied to work at the FBI. 

“Anecdotally, I have heard of instances where a credit check may be part of the pre-employment process, but only in rare cases … Personally, I have never filled a role that had a pre-employment credit check as part of the recruitment process,” he said. 

Do all states allow employers to do credit checks?

No. As of 2023, 11 states had restricted the practice, according to the Urban Institute. Wisconsin has no state law restricting these checks.

What can I do if I think my credit report is wrong or if I think an employer used my credit history illegally?

If you believe there is a mistake on your credit report, you can dispute it by contacting the consumer reporting agency whose report showed the mistake. The agency must investigate. 

“If they can’t verify the accuracy of the information, then they have to remove it,” Raef said.

If you believe an employer used your credit history inappropriately, Raef recommends contacting an employment lawyer. 

“If they fail to notify you of a negative decision based on a report, or if they refuse to identify the source of the information that they obtained about you, or if they fail to get your permission at all, then you might be entitled to recover damages,” Raef said. 

If you or the employer is located in Madison, you can also file a complaint with the city of Madison’s Department of Civil Rights, which investigates alleged violations of the city’s equal opportunity ordinance. You must file the complaint within 300 days of the incident. 

Complaints are far less common than allegations of other kinds of employment discrimination, Peguero said. Of the 805 employment complaints submitted to the office between 2020 and 2025, just eight mentioned credit history.

How can I protect myself?

There are proactive steps you can take now to reduce the chance that a credit check will cause you unnecessary trouble.

 “You shouldn’t wait until you have signed something allowing your employer to look into this,” Raef said. 

He recommends the following actions:

• Request your own credit report to check for errors. You can do this for free once a year at www.annualcreditreport.com. If you find a mistake, report it. 

• Place a freeze on your credit report to reduce the risk of identity theft, which can damage your credit. A credit freeze blocks anyone from opening a new credit account in your name. You can place a freeze for free online, but you’ll need to do it separately for each of the three nationwide credit reporting agencies: Equifax, Experian and TransUnion. You’ll need to lift the freeze any time you want to apply for credit. “It’s kind of a pain … but it’s worthwhile to do with the amount of pain that it could cause if not done,” Raef said.

Natalie Yahr reports on pathways to success statewide for Wisconsin Watch, working in partnership with Open Campus. Email her at nyahr@wisconsinwatch.org. 

Can Wisconsin employers check your credit? is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

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• Fidelity bonds protect businesses if an employee steals or commits fraud. 

• The state issues the bonds, and research shows they’re one of the most effective ways to persuade employers to hire people with criminal records.  

• But Wisconsin issues few fidelity bonds. 

• Experts are divided on the issue, with some saying the free insurance can’t hurt and might help. 

• Others say it doesn’t address all the concerns employers have or educate them about the benefits of giving people with criminal records a second chance.

For every 10 people released from Wisconsin’s prisons, just seven find jobs within two years — even as the state’s ongoing worker shortage leaves many employers scrambling to find the help they need. 

The struggle isn’t unique to Wisconsin. Formerly incarcerated people nationwide are far more likely to be unemployed than the general population. One reason: Though people with criminal records often outperform their colleagues, many employers worry they’ll be unreliable or even dangerous. 

That’s why, 60 years ago, the U.S. government began insuring employers against that risk, for free. 

The Federal Bonding Program, established in 1966, offers “fidelity bonds” to reimburse businesses for losses if the covered employee steals or commits fraud. 

Recent research suggests these bonds are one of the most effective ways the government can persuade employers to give jobs to people with criminal records. Those jobs have ripple effects.  Families become more financially stable, communities become safer — as people with jobs are less likely to commit new crimes — and taxpayers save money as fewer people return to prison.  

So why aren’t Wisconsin employers requesting these bonds? While some states issued hundreds last year, Wisconsin issued just three — even though an estimated 1.4 million Wisconsinites have a criminal record. 

Demand in the state is so low that when the federal government in 2019 offered Wisconsin $100,000 to spend on bonds, workforce officials used just $15,000.

To figure out what’s going on, Wisconsin Watch spoke to economists, insurance experts, criminologists and workforce development officials, who ranged from enthusiastic to cynical about bonding. 

Some said the coverage limits may be too low to address employers’ worries, or that bonds don’t help when employers are worried about safety or a bad work ethic. Some said employers overestimate the risk of hiring people with criminal records and that education — not insurance — is the solution. But most said offering this free insurance can’t hurt and might help. 

In a worker-strapped state, is this insurance program a little-known lifeline or an irrelevant relic? 

Bonding basics

Imagine you’re a hiring manager who wants to offer a job to an applicant with a criminal record. If you’re in the same boat as many businesses, your commercial insurance may not cover any theft or other act of dishonesty if the employee in question has a criminal record. 

To fill that insurance gap, you contact your state’s bonding coordinator to apply for a six-month, no-deductible fidelity bond that will reimburse you for up to $5,000 in losses. In special circumstances, you can apply for additional coverage of up to $25,000. The state handles the paperwork and the $100 cost. 

The program boasts a claim rate of just 1%, meaning businesses in the program seldom report losses. At the end of the six months, you may now be satisfied that your new employee is trustworthy — or you can buy additional coverage. 

In Wisconsin, these bonds are the only incentive available to encourage what’s often called “second chance” or “fair chance” hiring.

“It is a unique tool to help a job applicant get and keep a job,” the state’s Department of Workforce Development says on its bonding webpage. “It is like a ‘guarantee’ to the employer that the person hired will be an honest worker.” 

The same bonds are also available to other job applicants whose background could make it hard to get or keep a job. That includes people in treatment or recovery for alcohol or drug addictions and people with little or no work history. 

In practice, the program is almost exclusively used for people with criminal records, according to program administrator Kevin Kulling. 

Wisconsin focuses much of its outreach effort on prisons, making sure people know how to take advantage of the program when they get out. The stakes are high: Of those released in 2023, nearly 1 in 3 were rearrested within a year and 1 in 8 ended up back behind bars. 

Recent research backs bonds 

Governments have tried a variety of ways to persuade employers to hire people with criminal records. 

Nationally, there’s the $2-billion-a-year federal Work Opportunity Tax Credit, which rewards employers for hiring people with felony convictions. But new research finds the tax credit doesn’t increase pay or hiring for the workers it’s designed to help. It expired in December but could be reinstated.

Meanwhile, a growing number of states have tried to boost job seekers by barring employers from asking about criminal records on job applications. In about a dozen states, public and private employers are subject to such “ban-the-box” measures. 

Evidence is mixed. Several studies find these laws reduce hiring for Black and Hispanic men, suggesting that when employers can’t check an applicant’s criminal record, they instead make assumptions based on demographics.

Enter the bond, a policy that predates the others by decades. In 1975, the U.S. Department of Labor commissioned a study of the then-new program. Participating workers reported major salary increases after joining the program, and a majority held on to their bonded job longer than one year. 

New evidence supports the program. In a 2023 article, researchers from the National Bureau of Economic Research teamed up with an online hiring platform to survey businesses. The platform asked users about their willingness to hire people with criminal records and how that might change if the platform offered wage subsidies or insurance coverage. 

Researchers found employer willingness to hire someone with a criminal record rose 12% when offered up to $5,000 in crime and safety insurance. It would take an 80% wage subsidy to get the same result. 

Mitchell Hoffman, an economics professor at the University of California-Santa Barbara, co-authored that study. He said policymakers have often tried to solve these hiring challenges by trying to change the workers, like with training or therapy. This research suggests it’s possible to change employers’ behavior, too.

That matters, he said, because employers hold the cards. “If firms don’t want to employ people with a record, then it’s hard to move them to employment and to good jobs,” Hoffman said.

The findings are welcome news to Jen Doleac, executive vice president of criminal justice at the philanthropy Arnold Ventures and author of the book “The Science of Second Chances: A Revolution in Criminal Justice.” Doleac, who researches crime and discrimination, was surprised when she first learned about the Federal Bonding Program.

“It’s such a smart idea. Employers say they’re worried about the risk of hiring someone with a record. How do we deal with risk? We provide insurance,” Doleac said. A critic of the Work Opportunity Tax Credit, she said the new research shows why bonds are a better bet. 

“Insurance just moved the needle more, and much more dollar for dollar,” Doleac said.   

Experts divided

Even in states issuing hundreds of bonds a year, that’s just a fraction of those released from prison annually, and a smaller share of all people with criminal convictions. 

“The total number of firms nationally that were involved, it seemed like a very small number,” Hoffman said. “There's interesting variation across states, but overall, just not that much usage.”

Just 27 Wisconsin employers participated in the program in the last five years, according to federal records obtained by Wisconsin Watch. Those businesses range from national retailers like Dollar Tree to smaller agricultural businesses like Rine Ridge Farms. 

Why haven’t bonds proven more popular? Wisconsin Watch asked more than a dozen Wisconsin businesses and industry groups about their experience with the Federal Bonding Program. Just one responded, and none agreed to answer questions. 

Hoffman thinks maybe employers just aren’t that worried, or that the risk they’re worried about isn’t covered by the bonds. They may worry the applicant will be unreliable or even dangerous, despite evidence to the contrary. In a 2021 survey by the Society for Human Resource Management, more than 80% of business leaders said second-chance hires perform the same as or better than other employees. 

“If someone does something bad to a customer,” Hoffman said, that customer might sue, or customers might take their business elsewhere. Bonds don’t cover that risk. “That is very difficult to quantify. What is the cost of that sort of event?”

Another possibility, Doleac said, is that employers don’t know about the bonds. Some states may be doing more to get the word out than others, but marketing costs money that state workforce departments may not have.

The more likely explanation, she said, is that the process is too cumbersome for employers who are used to buying insurance that covers all their employees. Although job applicants and employers do not have to complete any paperwork to get a bond, employers still need to keep track of the policies that were issued to a specific employee. 

“It’s just too inconvenient and too much paperwork to keep track of,” Doleac said. She and her colleagues are exploring whether standard policies could include riders covering these workers, without a separate process or schedule. 

Meanwhile, some advocates for formerly incarcerated people worry that the bonds can backfire, making employers worry even more. 

Craig Coleman, a case manager for Forward Service Corporation, helps formerly incarcerated Wisconsinites get trained and find work. He doubts bonds will help them. 

“You’re saying to your employer, ‘If I steal from you, then you'll be reimbursed,’” Coleman said. “I’m not an HR person, but if I had someone come in with an insurance policy saying, ‘If I steal from you,’ that’s the end of the conversation. I'm not hiring you.”

Genevieve Martin of Talent Nova agrees. Before starting a website designed to help formerly incarcerated people prepare for the workforce, she worked at Dave’s Killer Bread, which built its brand on hiring people with criminal records. 

There, she trained more than 50 other companies on “fair-chance hiring,” teaching them that hiring people with criminal records isn’t risky. Talking about extra insurance policies undermines that message, she said.

“Rather than hiring the person because they’re the best person for the job, but they happen to have a record. Now we’re trying to say, ‘Here’s an insurance policy. Please do it,’” Martin said. 

The fact that Wisconsin employers seldom use fidelity bonds might even be a good sign. The state has unusually strong organizations that prepare applicants for work and match them with employers, said Josh Morby, who represents such groups as spokesperson for the Wisconsin Workforce Hub. If those organizations are doing their jobs well, employers will trust their participants — no insurance policy necessary. 

“Wisconsin employers are looking for candidates who are screened, prepared and supported so hiring justice-impacted talent becomes a reliable workforce solution, not a risk,” Morby said in an email.

Wisconsin bond use lags 

The bonding program’s popularity varies among states, according to data Wisconsin Watch obtained from the U.S. Department of Labor’s Employment and Training Administration. In 2025, New Jersey issued 277 bonds, and Washington, D.C., issued 192. 

Meanwhile, 12 states didn’t issue any in 2025. 

Wisconsin Watch requested interviews with workforce officials in New Jersey, Tennessee, Washington, D.C., and West Virginia to learn why employers there are using more bonds. None responded. A U.S. Department of Labor spokesperson also declined an interview. 

One possible explanation for the higher numbers is that those states have higher unemployment rates. But Wisconsin’s unemployment rate was at a historic low in 2018, when the state issued 27 bonds, more than 12 times as many as it did in 2025. 

In 2019, Wisconsin workforce officials requested the maximum $100,000 federal grant to buy more bonds. They said they planned to buy 1,000 bonds over four years, plus more with other funds. They estimated more than 5,500 Wisconsinites with criminal records were eligible. The bonds, they said, would help break “the cycle of recidivism.”

But the COVID-19 pandemic — which shuttered businesses and locked down prisons — derailed the state’s plans. 

“With the unemployment rate at an increased rate in Wisconsin, many recruitment efforts for employers to use Fidelity Bonds (have) slowed,” officials wrote in each quarterly grant report from April 2020 to February 2021.

When the grant period ended in 2023, Wisconsin had issued just 59 bonds. Officials wrote that, despite their outreach efforts, their bond numbers were “extremely low.”

The bond’s popularity has since further waned. In each of the last two years, Wisconsin issued no more than three bonds. Department spokesperson Haley McCoy attributed that to the state’s tight labor market. 

“Given the strong demand to fill vacant positions, employers have not needed the added incentive of fidelity bonds to hire justice-involved employees during this historically strong economic period,” McCoy wrote in an email to Wisconsin Watch.

Asked whether the Department of Workforce Development plans to make any changes to Wisconsin’s bonding program, McCoy said the bonds are “just one tool in the toolbox that can help a job seeker secure a job.” 

“We’ll continue to work with our partners to provide opportunities and prepare job seekers and workers for their next opportunity in Wisconsin,” McCoy wrote.

From a job market ‘hidden force’ to a lever against bias

Meanwhile, Arnold Ventures researchers are trying to figure out how to get more businesses across the country to use federal fidelity bonds or something similar. 

Criminal justice director Carson Whitelemons has been studying ways to improve the federal program. But she said just trying to understand how bonding works and how it fits with existing business policies can be “incredibly difficult.”

“Even for business owners who are trying to ask their insurers what is covered and what is not covered, it's not always clear, and often that realm of uncertainty, I think, is what makes employers cautious,” Whitelemons said.

But it’s not just about bonding. The work is part of a new effort she’s organizing with experts from a variety of fields, trying to understand the biases that can keep people from getting all kinds of coverage and how to fix them.  

“(Insurance) is such a powerful lever in terms of what people feel safe or empowered to do, what they feel protected from. This has come up again and again in terms of different issues in the United States, in home ownership and redlining — insurance is often this hidden force, especially in areas where there is stigma or discrimination.”

Hoffman, the HR economist, said if more employers use bonds, that could help dispel misconceptions about people with records. 

“Employers … think they’re less productive than they actually are,” Hoffman said. That’s not the problem bonds are designed to solve, but if bonding gets more employers to hire these applicants, the experience may change how they view similar applicants in the future, he said. 

Meanwhile, officials from Wisconsin’s Department of Corrections will continue teaching prisoners about these seldom-used bonds and encouraging them to pitch the opportunity to their potential future bosses — for better or worse.  

Hongyu Liu is a data investigative reporter for Wisconsin Watch. Email him at hliu@wisconsinwatch.org. 

Natalie Yahr reports on pathways to success statewide for Wisconsin Watch, working in partnership with Open Campus. Email her at nyahr@wisconsinwatch.org.

‘Second chance’ bonds show promise. Few Wisconsin businesses use them is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

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Wisconsin Watch has launched a new, searchable dashboard to track layoffs across the state — the latest release in a broader rollout of news applications, which began this week with a national immigration court data tracker.

The Wisconsin Department of Workforce Development (DWD) maintains a public dataset of layoff notices submitted by employers; our tool aims to make that information more accessible and to highlight statewide or county-level patterns. The tool draws from data dating to 2018 and allows for searches by employer, industry, county and year.

These tools can always be improved, and we welcome questions, suggestions or feedback. If you or your organization find a way to use these tools, please tell us about it.

We’ll release a few more new tools in the coming months, so keep an eye out.

New Wisconsin Watch tool makes statewide layoffs easier to track is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

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Track statewide layoffs across Wisconsin is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

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• Jobs for data centers happen in three phases: development, construction and operations. 

• The largest numbers of workers are on site when a data center is being built, experts said. 

• The number of long-term jobs a data center brings depends on the size of the facility. 

• It’s difficult to measure the ripple effects data centers have on the economy; however, experts say local businesses can benefit from producing components and products for data centers. 

• Data center technicians will be in high demand as more facilities come online.

As data center developers stake out land in Wisconsin communities, much debate has surrounded whether the computer-packed warehouses will deliver economic benefits locally. 

Waves of opposition and concerns about land, water and electricity use routinely follow data center proposals, while supporters echo that the centers will create jobs and help the economy. 

But what jobs? How many of them? And will they last?

To answer those questions, Wisconsin Watch talked to three professors:

• Xiaofan Liang, who specializes in urban and regional planning at the University of Michigan.
• Scott Adams, a University of Wisconsin-Milwaukee labor economist. 
• Dijo Alexander, who specializes in information technology, digital transformation and artificial intelligence at the University of Wisconsin-Milwaukee. 

Here are some takeaways.

What kinds of jobs do data centers bring?

Data center jobs fall into three major categories that represent phases in their creation: 

• Development
• Construction
• Operations

A data center first needs people to plan for its existence. Developers, engineers, designers and planners lay that groundwork. 

“The data center industry as an ecosystem is pretty big … When they first introduce a data center to a place, they have to figure out the design standard, how to construct all kinds of facilities, how it connects to city systems,” Liang said.

Then, developers must hire heaps of hands-on laborers to construct the gigantic warehouses from the ground up — the largest portion of workers needed in creating and operating a data center. Among other professions, this includes electricians, plumbers and pipefitters, carpenters, structural steel and iron workers, concrete workers and earth drillers.

The job boom from early phases fizzles out once the building is complete, Liang said. 

“(During) construction time, you usually have a lot more jobs — maybe 10 times in magnitude more so than operations,” Liang said. 

Operations jobs, fewer in quantity, are largely “unglamorous,” Adams said. 

Some of these roles have relatively low barriers to entry, such as maintenance workers and security guards. Meanwhile, electricians and HVAC workers are needed, considering that power and cooling are data centers’ “two most important inputs,” Adams said. 

Adams echoed a popular analogy likening data centers to warehouses full of rotting bananas that need constant cooling and replacing.

“You need banana technicians, more or less, that take the rotted bananas out and replace them with new bananas,” Adams said. “Now, granted, they’re much more expensive bananas in there, and they’re doing a whole lot, and it requires a little more expertise. But again that expertise, by and large, can be developed pretty quickly.”

Those workers will be data center technicians — people who install servers, replace hardware and cables, monitor systems and notice when things break down.

How many jobs do data centers bring? 

The number of jobs created depends on a data center’s size, Liang said.  

That can initially mean thousands of jobs at gargantuan developments like in Mount Pleasant. Microsoft says it has employed 3,000 people to construct the location, compared to 500 full-time workers once the plant is operating. But these numbers are expected to climb as the company constructs a cluster of additional centers at the site. 

Not all of these workers will be local. Given the temporary high demand, the projects will likely need out-of-town construction laborers who travel to the area and don’t stay long term.

Smaller projects will employ far fewer people. For a typical data center, Microsoft estimates it hires about 50 full-time employees. What those numbers mean for the local area depends on the community’s size. 

“In a bigger city, like Atlanta, it’s like a drop in the ocean, right? It doesn’t really affect much,” Liang said. “In a rural area, in a smaller town, hundreds of jobs … are a big deal.”

What about the trickle-down economic benefits? 

A sizable new employer entering communities could ripple across other nearby industries, though Liang notes this is hard to measure. 

“(A data center) just has such a big infrastructure need that trickles down in many different ways,” Liang said. “Now we need expanded utility infrastructure, grid, fiber, water, all these things. Construction of these infrastructure, even though it’s not directly related to (a) data center, could increase local employment in those areas.”

Inside a data center are “cabinets after cabinets of steel frames holding computers” that need to be built, Alexander said. This can boost local manufacturing, especially the metal fabrication industry. 

Wisconsin manufacturers have already begun cashing in on the construction boom nationwide. As Wisconsin Watch previously reported, just three Wisconsin companies alone have amassed more than $1 billion in equipment sales — such as motors, generators and cooling systems —  to data centers.

Massive developments like Microsoft’s in Mount Pleasant can potentially lead to a “tech corridor,” a cluster of warehouses and manufacturers near the data center they serve, Alexander said. 

“If we take the initiative and if we bring a few big enough component manufacturers, we can create locally created components for these data centers to consume,” Alexander said. “It’s like if you have a big restaurant or food manufacturer here, you will have agriculture around there, because it is easy for you to bring your produce for their consumption. Just like that. ”

The trend could also activate industries like nuclear power, Adams said. Building data centers  in conjunction with nuclear reactors to generate their power would fuel even more construction and energy jobs, he added. In Kewaunee County, an energy company wants to rebuild Kewaunee Power Station, a defunct nuclear power plant, anticipating energy demand from AI and data centers.

In more rural communities or near smaller data centers, the trickle-down effects could prove more modest — perhaps a few new restaurants and housing units, Adams said. 

Alexander also noted the effects could also be less concentrated, with growth spilling into neighboring cities as employees work at the center but live elsewhere.

But will enough permanent jobs be created to sustain the growth sparked during the early labor-intensive development phase? That’s unclear, Adams said. 

“We don’t have a firm enough grasp about the indirect effects in the longer term,” Adams said. “Short run, that’ll be great. Longer run, can we sustain the new development that might happen around these? I don’t know the answer to that. I think if the power generation side of it comes in connection with them, there’s more of a chance that that will work.”

Who are data center technicians?

Data center technicians are perhaps the most novel job introduced by the data center boom. The roles are more specialized than others needed inside the warehouses.

Job postings for data center technicians at Microsoft’s Milwaukee location say the workers will be “preparing, installing, performing diagnostics, troubleshooting, replacing, and/or decommissioning equipment under the guidance of more experienced data center colleagues.” 

The posting states the job requires a high school diploma, knowledge of computer hardware and some experience with IT equipment. Pay for lower-level technicians ranges from $23 to $36 per hour, with more experienced workers making up to about $48 per hour.

Adams said likely candidates will include engineers and computer coders and people now entering college with their sights on data center work. Microsoft and Gateway Technical College in Kenosha launched a “Data Center Academy,” preparing students to work in data center operations. Adams believes partnerships like this will become more common.

Are these good jobs?

You can use the interactive table below to explore many of the jobs data centers are expected to create, including wages, employment totals and required education.

Here’s what the data center boom means for Wisconsin’s workforce is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.

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• The federal Work Opportunity Tax Credit rewards companies for hiring people who often struggle to get jobs.

• Lawmakers are currently in the process of reauthorizing the $2 billion tax credit, which has been around since 1996.

• Proponents of it argue that it helps people get jobs and get off government assistance. 

• However, a new study by researchers at the University of Wisconsin-Madison and the University of Southern California found that the credit fails to increase hiring or pay for workers. 

• Furthermore, large businesses disproportionately use it.

A new study of Wisconsin data finds what some researchers and policy wonks have long suspected: The $2 billion Work Opportunity Tax Credit doesn’t work. 

Congress created the credit in 1996 as it overhauled the country’s welfare system. It rewards companies for hiring people who often struggle to get jobs, including some people who receive government aid, have disabilities or felony convictions or have been out of work for a long time. Employers can typically claim up to 40% of the wages paid to qualifying workers, with a maximum credit of $2,400. 

The credit subsidizes around 4% of all new hires, according to 2022 federal data cited in the study. Overwhelmingly, they’re low-wage, short-term jobs at large employers, including major retailers and temporary staffing agencies, researchers have found. 

Researchers have wondered for decades whether the credit pays off, but most states don’t offer the kind of records that would answer that question. Wisconsin does. 

Thanks to an unusual collaboration between the state government and the University of Wisconsin-Madison, researchers can track the earnings and employment status of participants in certain social safety net programs. 

In a 2025 working paper, researchers from UW-Madison and the University of Southern California studied two decades of records of Wisconsinites who received food aid through the Supplemental Nutrition Assistance Program (SNAP), the most common way an employee qualifies for the tax credit. Researchers compared SNAP recipients who were eligible for the credit with similar recipients who weren’t. 

Their findings were unequivocal. 

“We find that these subsidies do not increase hiring or earnings among eligible groups,” the authors wrote. In fact, they said, their findings rule out even so much as a 0.2 percentage point effect on hiring. 

They estimate 97% of the hiring subsidized by the tax credit would have happened anyway, a phenomenon known as “windfall wastage.” It’s possible, they wrote, that every one of the subsidized jobs falls into that category. 

The companies that take advantage of the credit are disproportionately large. In Wisconsin, they found, half of the subsidies go to just 48 businesses. Nationally, they estimate the credit costs more than $2 billion a year.

“Without reform, the program will continue as a costly transfer to firms with little benefit to the populations it is meant to support,” the researchers wrote.

Meanwhile, a bipartisan group of federal lawmakers wants to increase the credit, which expired in December. 

In November, legislators introduced a bill to extend the credit and expand eligibility to older SNAP recipients and spouses of military service members. The legislation would increase the amount companies can receive and automatically raise the credit amount with inflation. 

In a statement, co-author Rep. Lloyd Smucker, R-Pa., called the credit “a proven tool” that serves workers and employers. “WOTC is a bipartisan, commonsense approach that every Member of Congress should champion,” Smucker said.

Neither Smucker nor co-author Sen. Bill Cassidy, R-La., responded to a request for comment. 

Troubleshooting the tax credit

So why doesn’t the Work Opportunity Tax Credit work? The authors think one important reason is that hiring managers often don’t know which job applicants qualify. 

To receive the credit, employers must certify that they knew the applicant was eligible on or before the day they hired the person. Researchers surveyed 170 companies that use the credit. Less than 1 in 5 screened for eligibility on job applications. At companies that do collect this information, it might stay in the human resources office, never reaching the person who decides who to hire.

That may well be intentional, said UW-Madison economist Corina Mommaerts, one of the authors of the study. Federal and state law bars employers from considering certain factors in hiring decisions. That includes age and, in some cases, criminal record. There are ways to screen applicants without violating such laws, Mommaerts said, “but you can see why employers might still be very concerned.”

In addition, she said, some job applicants may hesitate to tell a prospective employer that they’re eligible. People with felony convictions, for example, may prefer not to draw attention to their criminal records. In the last two years, Wisconsin authorities certified the hires of just over 3,000 people with a felony conviction as qualifying for the credit.

“The concern is that there might be this stigmatizing effect,” Mommaerts said, explaining that some employers try to minimize that by asking applicants to review all the WOTC eligibility categories and indicate whether any apply to them. 

Melissa Riccio, director of inclusive hiring at the national re-entry nonprofit Center for Employment Opportunities, is an expert on that stigma. It’s her job to convince employers that hiring a formerly incarcerated person may not be as risky as they imagine.

Asked about the tax credit, she said such policies won’t singlehandedly make the kind of change she’s looking for, in part because many employers may see them as more work than they’re worth.

“You would never hear any of us say that it would be a bad thing,” Riccio said. “But I don’t think that that alone is enough to move the needle in encouraging employers to make a change in their hiring practices.”

Some policy experts say the new study proves that the temporary tax credit shouldn’t come back. 

Until now, there was little evidence on how well the Work Opportunity Tax Credit works, said Jen Doleac, executive vice president of criminal justice at the philanthropy Arnold Ventures, who researches strategies to reduce recidivism and help formerly incarcerated people get jobs. She and former colleague George Callas penned an October op-ed in Tax Notes calling the credit “completely ineffective.” 

“The evidence is clear: The WOTC does not serve its stated purpose and is a waste of taxpayer dollars,” they wrote. “Encouraging the hiring of workers from disadvantaged groups is a worthy goal. We must devote scarce public resources to solutions that actually achieve it.”

Lobbyists hail a proven, bipartisan tool

Initially authorized for just one year, the Work Opportunity Tax Credit has stuck around far longer — in part because of a powerful lobby. Major backers include payroll processing companies, temp agencies and groups representing the hospitality and retail industries. 

In 2022, a variety of industry groups seeking “solutions to the U.S. labor shortage” joined forces to form the Critical Labor Coalition. One of the coalition’s top priorities: lobbying for WOTC. The group spent $60,000 on lobbying last year, according to watchdog Open Secrets.

“Members of the Critical Labor Coalition — representing restaurants, retail, hotel and lodging, construction, food manufacturing, and other sectors — consistently affirm that strengthening and reauthorizing WOTC is essential both to their industries and to addressing the nation’s ongoing labor shortage,” Critical Labor Coalition Executive Director Misty Chally said in an email. 

Asked about the new Wisconsin study, Chally questioned its “narrow” focus on SNAP recipients. She said her group places “greater confidence” in a 2025 study commissioned by multinational talent management company Allegis Group. The authors of that study estimate renewing WOTC would subsidize 131,000 jobs, but they note it’s not clear how many of those jobs would have existed regardless.

“The exact impact of WOTC on net new job creation is uncertain … While some studies find that WOTC leads to meaningful employment gains among eligible groups, a significant share of the cost may stem from subsidizing hires that would have occurred anyway,” Allegis Group wrote. For their analysis, they assume more than 85% of those jobs would have existed without the credit. 

Why has WOTC stuck around?

Sarah Hamersma has been worried about WOTC for more than 20 years.

In the early 2000s, she was an economics graduate student at UW-Madison interested in programs designed to reduce poverty and help people work. She wanted to study the much larger Earned Income Tax Credit. Her adviser suggested she instead examine the smaller, newer and unstudied Work Opportunity Tax Credit. 

At the time, the credit was just 4 years old and limited to people who received cash welfare assistance. She asked state officials for access to the data. What she found matched what Mommaerts and her colleagues found decades later. Unlike the Earned Income Tax Credit, which gives money directly to low-income workers — and which studies show increases employment and boosts incomes — this tax credit seemed to just boost employers’ bottom lines.

“They’re not passing it along to the workers in the form of higher wages. They’re just sort of being like, ‘Awesome, I got more money,’” Hamersma said.

She wanted to do similar analyses on other places, but she couldn’t find any other states willing to share their data. Now an economist at Syracuse University, she researches programs like Medicaid and SNAP.

“I started studying other programs that seem to make more of a difference … but I always come back to this,” Hamersma said.

From time to time, reporters contact her to ask about it. Lawmakers, not so much.

“I still wait for them to someday call me and say, ‘What should we do, Sarah? Should we reauthorize this?’ Congress has never called,” Hamersma said.

She’s sure legislators didn’t read her research. But she hopes they might read the new study, and that it might sway them. 

“They’ve checked every angle you could possibly check, and the program is not working,” Hamersma said, calling it an “ironclad case.”

The new research was enough to convince Elena Spatoulas Patel, co-director of the Urban-Brookings Tax Policy Center, who saw the authors present their findings at a conference. “That really changed my mind about how we think about the credit,” said Patel, who co-authored a December op-ed calling for an end to WOTC. 

But Congress has reauthorized the credit each time it lapsed before, and it will likely do so again this year, Patel said. It’s not just that there’s so much industry power behind the credit (“a classic case of lobbying versus good tax policy”), she said — it’s also that lawmakers like the idea of it. 

“Unless and until something better is offered, it’s probably easier to renew the credit than to let it expire,” Patel said. “But again, it’s sort of ignoring the point, which is that we are spending taxpayer dollars on this by offering this credit, and it really isn’t helping employment.”

Exactly what the alternative might be is “the million-dollar question,” Patel said. Policy experts say options could include supporting evidence-backed job training programs or expanding the Earned Income Tax Credit.

“If you’re trying to reduce poverty, putting money in the hands of working people is a great way to do it, which is what the Earned Income Tax Credit does … Those low-income working families get more money to spend on the things they need, and we kind of cut out the middleman of the employer altogether,” Hamersma said.

Still, Hamersma doesn’t think Congress will follow her advice anytime soon. 

“This is my cynical take: It’s kind of the perfect program because it benefits corporations, which Republicans historically like, and it seems like it’s supposed to be for poor people, which Democrats historically like,” Hamersma said.

“The facts are kind of irrelevant, the facts where nobody gets helped — it doesn’t quite make it to the top.”

Natalie Yahr reports on pathways to success statewide for Wisconsin Watch, working in partnership with Open Campus. Email her at nyahr@wisconsinwatch.org.

Tax credit meant to help struggling workers mostly helps employers, Wisconsin study finds is a post from Wisconsin Watch, a non-profit investigative news site covering Wisconsin since 2009. Please consider making a contribution to support our journalism.