Saturday, December 17, 2011

Stupid Corporate Welfare Tricks

The Economic Populist

Speak Your Mind 2 Cents at a Time

by Robert Oak

Good Jobs First has released a new study which shows most state's corporate tax incentives and subsidies don't work to create jobs and pay living wages. Corporations are getting subsidies and tax breaks and instead of requirements to support the State's labor force, 43% of these subsidies are glorified corporate welfare. State corporate subsidies cost $11 billion a year and $7 billion worth of them do not require job creation and living wages. From the report, Job Creation and Job Quality Standards in State Economic Development Subsidy Programs:
  • Fewer than half (98) of the 238 programs impose a wage requirement on subsidized employers, and only 53 of those wage standards are tied to labor market rates, which are a more effective benchmark for economic development than fixed amounts that can stagnate in the manner of the federal minimum wage.
  • Only 11 of the wage requirements serve to raise overall wage levels by mandating rates that are somewhat above existing market averages for the geographic area or industry sector.
  • Wage requirements, which can be found in 42 states, vary enormously—from just above the federal minimum wage to more than $40 an hour in certain circumstances for a handful of programs. Using the lower end for those with ranges, the average of the hourly wage requirements is $14.76; the median is $11.82.
  • Those programs without any wage requirement which together cost more than $8 billion a year—can potentially result in jobs that pay so little that workers must rely on social safety net programs such as food stamps, Medicaid, State Children’s Health Insurance and the Earned Income Tax Credit. These hidden taxpayer costs may also occur from wage requirements that are sometimes set below market levels.
  • Only 51 programs (in 28 states) require that a subsidized employer make available healthcare coverage of some kind, and only 31 of these require that the employer contribute to the cost of the premium.