Stop us if you’ve heard this one before. A politician makes a splashy announcement about a great new deal with a big company to bring in new jobs! You know the drill. We’ve reported on many of them here ourselves. But does it all actually work out like they promise?
Here are Five Fast Facts on how corporate handouts don’t create jobs:
- 🤥 The Setup - Big companies have this down to a science. They like to say they’re “considering” multiple locations for a new plant (or whatever it is for them), and then they wait for the sweetest deal – meaning tax breaks, subsidies, or other local benefits – to come rolling in. They just pick the best one and cash the check.
- 💰 Happens All The Time - You know it and we know it! In fact, big money deals (often into the billions) have gone down just like this in at least half a dozen states this year alone. It doesn’t matter if it’s a red, blue, or purple state, they all like to play the jobs game, and the politicians everywhere are happy to do the grandstanding. It’s a win for the company and a win for the politician. The only loser? The taxpayer, who funds the whole scam.
- 🤔 Demonstration Time - Washington State gave Boeing almost $9 billion in 2013. No planes yet, but they’re sure quick to cash those government checks. Oh, they’ve also laid off 25k jobs in the state since then, too. Wisconsin offered almost $5 billion to Foxconn for 13k jobs in 2017, but now they’re only going to hire 1/10 of that number. Missouri gave Cerner almost $2 billion for 16k jobs in 2013 and has followed through on just a quarter of those jobs. Now that they’ve been bought by another company, well…you know how mergers go.
- 🚫 Consult The Experts - Economists often lean left or right politically, and that can…ahem…color their findings. But in this it seems there is a LOT of uniformity. These deals occasionally get some positive results, yes, but it’s mostly negative. And never the HUGE benefits that are promised by those politicians. Is that really surprising?
- 👍 What To Do? - Call a spade a spade. Government subsidies simply don’t provide the boost to the economy to match the promises. The best thing a government can do is create an environment where businesses can thrive and grow - keep taxes low, cut regulations to a minimum, and then get out of the way. #wishfulthinking
🔥Bottom line: This is a widespread practice, all over the country and at every level. The only thing that’s going to push it back is taxpayers being informed and voting wisely to support candidates who don’t bow to this sort of corporate shenanigans. Until then, it’s just going to be too tempting and too profitable for either politicians or big companies to resist.
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