Thursday, December 15, 2011

Good Jobs First report shows states, in New York, offering subsidies for jobs without getting much in return

Guess what? Most states, including New York, offer subsidies for jobs without ensuring job creations and job standards in return, according to a new report.


From Good Jobs First:
States are spending billions of dollars per year on corporate tax credits, cash grants and other economic development subsidies that often require little if any job creation and lack wage and benefit standards covering workers at subsidized companies. These are the key findings of Money for Something: Job Creation and Job Quality Standards in State Economic Development Subsidy Programs, a 51-state “report card” study published [yesterday] by Good Jobs First, a non-profit, non-partisan research center based in Washington, DC.
“With unemployment still so high, taxpayers have a right to expect that economic development investments create significant numbers of quality jobs,” said Good Jobs First Executive Director Greg LeRoy. “The days of ‘no strings attached’ are largely gone, but the fine print in many states is still full of gaps and loopholes.”
....“If subsidies do not result in real public benefits, they are no better than corporate giveaways,” said Good Jobs First Research Director Philip Mattera, principal author of the report. “States should be using these programs to reduce unemployment and raise living standards, not simply to increase corporate profits.”
Each program is rated on a scale of 0 to 100 (with extra credit for advanced features). Nevada, North Carolina and Vermont rated the highest, with the District of Columbia, Alaska and Wyoming the lowest.

Also low was New York, tied for 43rd place, with details at bottom.

Some improvement?

Things might be getting somewhat better. As noted in Politics on the Hudson:
The report, however, did not take New York’s latest economic development effort—ten regional councils that competed against each other for grant and tax break money—into account. It did look at several of the state’s existing subsidy programs, such as the film tax credit and the Excelsior Jobs Program.
Who's got the upper hand? Not the public

I'd note that Atlantic Yards subsidies--infrastructure help under the premise it would create jobs and tax revenues--are not calculated in the report.

But the state's willingness to help, even before the economic crisis, was noticeable. And now, as framed by the New York Times story yesterday, With States Desperate to Keep Jobs, Companies Have Upper Hand, Report Shows, that's part for the course:
Economic development programs cost states and cities billions of dollars a year, but many programs require little if any job creation, fewer than half call for wage standards, and fewer than a quarter require the companies to provide health care for their workers, according to a study of program requirements scheduled to be released Wednesday by Good Jobs First, a nonprofit research organization that tracks corporate subsidies. Some merely require companies to invest in plants or new equipment, which could actually enable them to reduce their head counts.
States’ desperation to hold on to jobs was vividly illustrated this week in Illinois, which is so short of money that it has been unable to pay its bills on time in recent years. After Sears and the Chicago Mercantile Exchange were courted by other states, the Illinois Legislature passed large tax breaks to keep them where they are, over the objections of protesters who unfurled a “Stop Corporate Extortion” banner in the Illinois House chamber on Monday.
...Such deals are hardly unusual. Companies routinely seek tax breaks to relocate or to stay put. But the new report found that many states lack safeguards to make sure that the money they give companies creates long-lasting, well-paying jobs.
Consider, for example, that Atlantic Yards subsidies were premised in part on the (optimistic) claims of 17,000 construction related jobs, or job-years. If Forest City Ratner builds modular, as is announced, the amount of tax revenues from construction worker salaries would certainly decline, as well as likely the number of jobs.

Skepticism on job claims

For a relatively rare mainstream media coverage of contested job claims, consider the NPR blog report yesterday Just How Many Jobs Would The Keystone Pipeline Create?, concerning the xontroversial Keystone XL pipeline:

Republican presidential candidate Jon Huntsman said it would create "more than 100,000 American jobs."
And earlier Wednesday on the Senate floor, Republican Kay Bailey Hutchison of Texas said the project "promises 20,000 immediate jobs and 118,000 spin-off jobs."
They all appear to be getting their numbers from the same source: TransCanada Corporation, the company behind the project.
...What he fails to mention is that the jobs numbers are based on "person years," meaning the number of people employed could be much lower.
..."It's unsubstantiated," says Sean Sweeney, who directs Cornell University's Global Labor Institute. He co-wrote a paper that found the numbers to be exaggerated.

That paper's worth a look. It's the kind of report that should have been issued regarding Atlantic Yards, as it gives an authority to criticisms that members of the press are too unwilling to pursue on their own, given their devotion to The View from Nowhere.

moneyforsomethingny

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