Why subsidize wealthy corporations? | Arkansas Blog

Sunday, January 8, 2012

Why subsidize wealthy corporations?

Posted By on Sun, Jan 8, 2012 at 7:03 AM

The New York Times takes another run today at examining the handouts state give to lure manufacturers. The familiar points are touched, particularly the core question of why taxpayers should bribe profit-rich corporations and whether the return is worth the investment. This particular article looks further at a handout for job training, a routine benefit offered in Arkansas, including to Caterpillar, the featured recipient in the Times' article.

These handouts are such an article of faith among Arkansas politicians — check their campaign reports for the money that elects them — that it's almost a waste of time to discuss (up there with the ever-increasing devotion of newsprint acreage in the Democrat-Gazette to the still-dead David O. Dodd.) The near-universal support is also reflected in the Times article, though it notes:

Various studies have long questioned whether states get their money’s worth from incentives for companies that build facilities or expand existing ones. In a report last month, Good Jobs First, a nonprofit research organization that tracks such spending, found that states often attract companies that create few jobs, pay low wages or scrimp on health insurance.

But customized job training for a specific employer still holds favor with public officials, who often argue it may be an effective use of taxpayer dollars, especially when so many workers have been displaced. Targeted programs can be preferable to the more general training paid for by the federal government, programs that have been used by hundreds of thousands of Americans yet have left many participants still out of work.

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