Via an email from Greg LeRoy of Good Jobs First, we learn that the Tesla deal, as enacted by the Nevada Legislature, is even worse than announced. Aside from the widely touted 6500 jobs only being 6000 jobs for which the state is paying for, it turns out that Tesla doesn’t even have to create the jobs itself!
You read that right. Tesla gets to receive tax credits for investment and job creation not only for itself, but for any of its suppliers (“participants,” in the law’s language) that locate on the project’s huge location. Theoretically, Telsa does not even have to create half the jobs for which it will receive subsidies.
Why does this matter? Isn’t Tesla still responsible for bringing all those jobs (assuming they all come, which Richard Florida doubts) to Nevada? Yes, but it tells us that all the figures bandied about for indirect and induced jobs are just malarkey. The state claims that there will be a total of 22,000 jobs ultimately due to the project, but that depends on Tesla itself creating 6500 jobs. If the state is instead paying for some of the indirect jobs it claims would be due to the project, it is admitting that the Tesla base of direct jobs is smaller than 6000; therefore, 22,000 jobs would no longer be supported (assuming you buy into that methodology in the first place, which you shouldn’t). These multipliers are easily manipulated, and we have just gotten an object lesson in how to do that.
Amazingly, the media is not paying much attention. As far as I can tell from searching the Web and the premium Nexis news service, the only place that has picked up LeRoy’s statement is the Las Vegas Sun‘s blog. Really, this is no time for the media to be letting us down!
I encourage you to check the link to the legislation above. It is a sight to behold, and proof once again that bad economic deals are a dime a dozen, leaving the average taxpayer to pick up the slack.
Cross-posted from Middle Class Political Economist.