Job Piracy Marches on in Alabama
Unmentioned in the recent Good Jobs First report on job piracy, it turns out that both relocation subsidies and retention subsidies are commonplace in Alabama. Greg Varner (@varnergreg) directs me to this report on how a Birmingham auto dealership, Serra Automotive, is demanding a multimillion incentive deal to keep it from relocating to another municipality in the metro area. As Birmingham News columnist John Archibald tells the story:
Across the Birmingham area cities spend tens of millions of dollars on incentives. Sadly, it is rarely to draw new opportunity or gain new blood. Instead we spill blood, as competition for existing businesses in the region pits city against city.
It happens all the time.
Birmingham commits millions to steal a hospital from Irondale, and St. Clair sweetens a deal to lure a coffee maker out of Jefferson County. Birmingham outspends the suburbs to take a Walmart, and the escalation continues.
We love the smell of industrial recruitment in the morning. And it gets us frustratingly nowhere.
We beat each other senseless. For a zero-sum game.
Because the city – the cities across the Birmingham area – pay to keep what they already have. Taxpayers lose and the region gains no jobs.
Here we have an example of the intra-metro area job piracy that Good Jobs First covered in its 2011 report on the Cleveland and Cincinnati metro areas, Paid to Sprawl. It would be interesting to see if Birmingham shows the same tendencies as those two regions, where most moves, even from one suburb to another, put facilities further from the city center. My guess is that’s exactly what we would find.
And I should emphasize, as the most recent Good Jobs First study does, that the state of Alabama knows how to put anti-piracy provisions in state subsidy programs. The very first entry on p. 45 of The Job Creation Shell Game shows Alabama’s Enterprise Zone Credit program as containing no-raiding language. Since cities are legally the creation of states, it’s time for Alabama to clip its cities’ wings and force them to stop this completely indefensible intra-state job piracy. The same holds true in many other states.
Cross-posted from Middle Class Political Economist.
Love thy neighbor. Do not covet thy neighbor’s jobs. Thou shalt not steal thy neighbor’s livelihood.
Does this kind of job piracy occur primarily in the SE quadrant? Would the country have been better off if the South had been allowed to secede?
And from the book of What Comes Around….
Though Virginia has two Democrats in the Senate, nine of its eleven House reps are Republicans. This from the NY Times today:
“Virginia’s Feast on U.S. Funds Nears an End”
This happens all over. RI and Mass are always going at it. Fidelity for one. Woonsocket lost Walmart to the town next door, North Smithfield because it wanted a Super Walmart. NS got it’s plaza however without giving up taxes…except when you realize that their plaza has turned dead Woonsockets plaza which means lost taxes.
The interesting thing, is as a city Woonsocket gets more money from the state than say a town like NS. Towns like NS are always complaining about this. Now, Woonsocket will need more from the state (though it’s state delegation is balking the state passed that idiotic tax raise cap) while NS has new revenue so will need even less.
These people just don’t get the zero sum game when there really is one being played.
Like Daniel said, it happens all over the country. The new Good Jobs First report highlights how it happens in Rhode Island, NY/NJ/CT, KS/MO, Georgia and Texas. GJF also did reports on the Cincy and Cleveland metro areas in 2011 and on the Twin Cities metro in 2000.
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i wonder if it’s “job piracy” at all
and not just old fashioned corruption.