Study: Giant Job Subsidy Packages Grow More Common and Costly
WASHINGTON, June 19, 2013 /PRNewswire-USNewswire/ -- In recent years, state and local governments have been awarding giant economic development subsidy packages to corporations more frequently than ever before. The packages frequently reach nine and even ten figures, and the cost per job averages $456,000.
These are the findings of Megadeals, a report released today by Good Jobs First, a non-profit research center in Washington, DC. The report can be found at www.goodjobsfirst.org/megadeals.
"These subsidies are getting out of control," said Philip Mattera, research director of Good Jobs First and principal author of the report. "Huge packages that used to be reserved for projects creating large numbers of jobs are now being given away more routinely."
Good Jobs First identifies 240 "megadeals," or subsidy awards with a total state and local cost of at least $75 million. Their cumulative cost is about $64 billion.
The number of such deals and their costs are rising: since 2008, the average number of megadeals per year has doubled and their aggregate annual cost has roughly doubled as well, averaging around $5 billion.
Michigan has the most megadeals, with 29, followed by New York with 23. In dollar terms, New York is spending the most ($11.4 billion). Next is Michigan ($7.1 billion).
"Despite their high costs, some of the deals involve little new-job creation," said Good Jobs First executive director Greg LeRoy. "Some are instances of job blackmail, in which a company threatens to move and gets paid to stay put, while others involve interstate job piracy."
Megadeals have been awarded to many large corporations, such as: Amazon.com, Apple, Boeing, Citigroup, Exxon Mobil, Ford Motor, General Electric, General Motors, Goldman Sachs, Intel, Nissan and Toyota.
The most expensive listing is a 30-year discounted-electricity deal worth an estimated $5.6 billion given to aluminum producer Alcoa by the New York Power Authority. Taking all of a company's megadeals into account, Alcoa is at the top with its single $5.6 billion deal, followed by Boeing (four deals worth a total of $4.4 billion), Intel (six deals worth $3.6 billion), General Motors (11 deals worth $2.7 billion) and Ford Motor (9 deals worth $2.1 billion).
The megadeals list is a new enhancement of Good Jobs First's Subsidy Tracker database, the first 50-state online compilation of company-specific data on economic development deals.
Contact: Phil Mattera 202-232-1616 x 212
SOURCE Good Jobs First