DMI Blog

Adrianne Shropshire

Giving Away the Farm

When public subsidies are used to spur job creation, what's the penalty for cutting jobs once you've received the money?

Generally, the answer is that there is no penalty. Companies can make promises, get tax breaks, and not only not live up to the promises that they've made, but cut badly needed jobs from struggling communities. Today's Metro reports on a study released in Albany yesterday that shows that 63% of Industrial Development Agencies around the state gave money to companies that created no new jobs, and, in fact, contributed to job loss. This is not a new story and yet we continue to uphold policy that in no way leads to greater economic opportunity for the communities that give up their tax revenues.

Current reforms being proposed in the state legislature raise critical questions about expectations and outcomes. They are intended to shine the light on the issue of job quality, not just the numbers. Wal-Mart received $8 million in IDA subsidies in a two year period while the average wage for workers remains less than $14,000 a year. State agencies should not be in the business of subsidizing poverty.

As we move ever closer to the end of the legislative session in Albany and approach the inevitable late session horse trading season, the question looming on the horizon is which reforms will make the cut. The job quality reforms must go hand in hand. Prevailing wage for construction without Living wages for permanent jobs undermines a community's chances for economic viability. And living wages without local hiring provisions undermines the community itself.

Ultimately we must get to the question of should public money be used to subsidize private developments. But until then we must to set conditions and standards for how we expect corporations to behave with our money.

Adrianne Shropshire: Author Bio | Other Posts
Posted at 8:05 AM, May 10, 2006 in
Permalink | Email to Friend