The latest Atlantic Cities features a Richard Florida article that every tax payer who wants to get mad at yet another boondoggle should read.
“The Uselessness of Economic Development Incentives” points to a New York Times investigation into the corporate welfare scheme in which states give away the store to lure huge corporations in hopes of landing some jobs.
In many cases, the corporations are happy to take the money but had already decided where to locate -- and there are few states who know how to monitor how to lure for more effective results.
“Our biggest takeaway,” writes Florida: “there is virtually no association between economic development incentives and any measure of economic performance. We found no statistically significant association between economic development incentives per capita and average wages or incomes; none between incentives and college grads or knowledge workers; and none between incentives and the state unemployment rate.
“The only statistically significant association we find is between incentives and the poverty rate. This is in line with other research by Robert Greenbaum and Daniele Bondonio, which finds economic development incentives to be more likely in poorer, more economically disadvantaged communities, especially those that have faced recent economic decline.”
Forty-eight companies have received more than $100 million in incentives since 2007, Florida writes, “led by General Motors, which took in a whopping $1.77 billion in incentives. Other companies that are part of the $100 million incentive club include: Ford, Chrysler, Daimler, General Electric, Shell, Dow, Amazon, Microsoft, IBM, Google, Caterpillar, Procter & Gamble, Sears, Boeing, Airbus, Panasonic, and Electrolux. More than 5,000 companies received one million dollars or more in incentives, according to the Times’ estimates.”
OK, we'll let you go back to your holiday shopping.