Wednesday, July 23, 2014

Job-creation, Mississippi-style

Posted By on Wed, Jul 23, 2014 at 11:07 AM

BIG PLANT/BIG SUBSIDY: The Nissan plant in Canton, Miss.
  • BIG PLANT/BIG SUBSIDY: The Nissan plant in Canton, Miss.

When candidates this year make big promises on economic development, listen closely for candidates who claim they'll match Mississippi, a solid red Republican-controlled state.

I'm not sure we want to model our corporate welfare state after our neighbors.

 Check this out.

Mississippi is falling farther and farther behind its constitutionally mandated duty to provide adequate education — $1.3 billion behind. It is spending $648 less per student than it spent in 2008. (To date, Arkansas has complied with school finance court rulings. But the Republican-majority legislature has frequently flouted court rulings and who's to say they might not be inclined to follow this course, too?)

It just so happens that education's loss is matched by corporate welfare. Mississippi found $1.3 billlon in tax breaks to attract a Nissan plant to the state, this on top of nearly $400 million spent for infratructure and job training.

Nissan has 5,200 workers at its Canton plant. And that's a big thing.  But.......

However, out of all 5,200 workers at Nissan’s Canton plant, most of them are employed by temp agencies. Regular, full-time employees are paid over $23 per hour and have benefits, but the temp workers at the Canton plant are often hired for just half that amount, given no healthcare, retirement, benefits, or paid time off, and have very little job security. The automaker has even issued a 5-year wage freeze for its Mississippi workers even as the company pocketed $3.3 billion in profit last year. Nissan likes to brag that it never lays people off, yet they don’t count temp workers who have been let go. While many other Nissan plants have unionized workforces, Nissan has indirectly threatened to close its Mississippi plant for good and move out of state if its workers organize.

Oh, but you say, those workers generate taxes. Not as much as you might think. For 25 years, Nissan gets to capture $160 million in income taxes from its workers. Mississippi doesn't get it the money. In Arkansas, the same deal would leave the state with a sales tax on workers' utilities and the clothes on their back and occasional non-food purchases. Do the math. It takes a while to recoup $1.3 billion at that rate.

Would we like an auto plant? Would you like a new car? You shouldn't answer yes to either question without knowing the cost and benefits first.

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