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TOYOTA
PORK CHOP “PROGRESS"
A recent Flagpole piece on the Athens-Clarke
County Economic Development Foundation
[City Pages, Aug. 8] got me to thinking about
how challenging it is to recruit new industry
compatible with local needs and circumstances.
Much—although perhaps still not enough—has
been said about the economic disparities that
lurk beneath the serene and appealing surface of
this community where the percentage of people
living in poverty is actually more than 40 percent
higher than the state average, but unemploy
ment is roughly 20 percent below the statewide
mean. Incongruous as it may seem, the "working
poor" are often a sizable presence in college
towns, .where universities and other employers
need little bait on the hooks they dangle into a
captive pool of faculty and student spouses and
an assortment of hangers-on addicted to the lo
cal lifestyle and ambience. Anyone who imagines
that educatiori-oriented university communities
are insulated from the vulgar realities of supply
and demand need only consider that, according
to the last full accounting I can find, on aver
age, only 22 of Georgia's 159 counties pay their
teachers less than Clarke County does.
years hardly seems worth mentioning compared
to the hundreds of millions of dollars being
tossed at some larger prospective employers
these days, but before we go farther down this
road, we might want to consider where it can
lead. Georgia's most recent high-stakes foray into
the industrial bidding wars came just last year
when state officials announced that a new Kia
automotive assembly plant would be built over in
Troup County at West Point. The facility is sup
posed to employ at least 2,500 people, meaning
that the announced incentive package totaling
$410 million in stath and local concessions works
out to $164,000 for each job, slightly less per
worker than Alabama offered Mercedes to open
a plant near Tuscaloosa way back in 1993. Still,
when the Kia deal was announced an Atlanta
Journal-Constitution writer gushed, "Georgia joins
the club of southern states enjoying the invest
ment and prestige that foreign automakers like
BMW, Hyundai and Nissan have brought to the
region over the past 15 years.''
Some club! Its highest roller is Alabama,
whose $800 million in cumulative generosity to
Mercedes, Hyundai, Honda and Toyota over the
needed to make good on Alabama's promises to
Mercedes, which included buying $75 million
worth of new vehicles from the company for state
use*. Six years later, Alabama cut $266 million
from its education budget before serving up $318
million in incentives to Hyundai and Honda. Just
in case you're wondering, when Alabama opened
the floodgates with its $253 million payoff to
Mercedes in 1993, the state ranked 41st overall
in teachers' salaries. 14 years later, it ranks 47th.
Mississippi, meanwhile, maintains its almost pro
prietary grasp on 50th.
THE UGLY KID'S GAME?
Georgia's $20 million investment in train
ing Kia's workforce pales in comparison to what
Mississippi did for Nissan, but it's worth not
ing that the average Kia worker is projected to
earn $50,000 annually. As close as I can figure,
in order to make that much, a teacher in Troup
County would need about 10 years of experience
plus a master's degree. Would it surprise you if
some local would-be teachers opt for the line at
Kia instead?
Teachers aren't the only Troup Countians
who stand to come out on the shorter end of
the Kia deal. Developers and politicians love
to brag about how many new jobs they've cre
ated with their subsidies, but I have yet to hear
one mention how many jobs are actually lost as
established employers simply pack it in because
they can't maintain a stable workforce as their
employees head off to greener pastures fertilized
heavily at taxpayer expense. Kia, for example,
has received both a 15-year, $130-million prop
erty tax abatement and a promise of $21 million
in expanded and improved local infrastructure,
the bill presumably to be footed by those whose
employees they are taking away as well as those
whose property taxes will have to be jacked up
in order to make up for what Kia isn't paying and
won't be for quite a while.
There is no denying that subsidies to busi
ness and industry can produce some economic
benefits. Still, like many quick-fix drugs that
appear to work wonders in the short term, the
A scene from a groundbreaking in April at a new Toyota SUV plant in northern Mississippi.
Southern states in particular have gone to great lengths lately to attract manufacturers with
financial incentives, but are those big outlays worth it?
Given the drag effect of large numbers of
relatively low-paying university staff jobs and
the relatively high concentration of private em
ployment in the low end of the service sector,
it's hardly surprising that only in Valdosta are
Georgia's metropolitan area production workers
likely to earn less than they do here. That said,
at $12.04 per hour, a typical siich local worker
is positively in the chips compared to a local
cashier pulling down a whopping $7.57 per hour.
As the folks over at EDF seem to understand, our
need here is not so much more employment op
portunities, but better ones that will ultimately
pull local wage scales up rather than hold them
down. Unfortunately, however, such jobs are
most likely to be found in manufacturing, and
needless to say, they are not exactly plentiful in
these days of oversized executive salaries and
downsized factory payrolls. Nor is our community
the only one caught up in what is a fiercely com
petitive scramble to snag as many of the increas
ingly scarce new jobs as possible, sometimes, it
seems, irrespective of the costs.
A DiXIEFIED CLUB
The $920,000 in tax "forgiveness" bestowed
locally on SKAPS Industries over the next 20
Toyota workers seen at the 2003 opening of an engine plant in Huntsville. AL. Landing a big
manufacturer is typically a big deal for any community, but what other effects can it have
on the local economy?
last 14 years seemed
absolutely extraordinary
until its recent an
nouncement of a single
$811 million fork-over
to German steel giant
ThyssenKrupp AG doubt
less made the quartet of
carmakers feel downright
unloved. Running a dis
tant second to Alabama,
but determined to catch
up, Mississippi has dumped a combined $660
million on Nissan and Toyota over the last seven
years. Need I point out that, despite their indus
trial conquests, Alabama and Mississippi remain
the states for which Georgians concerned about
their own state's image continue to thank God?
Want to know one of the big reasons why?
When, as part of a $295 million show of hospital
ity, Mississippi ponied up $80 million in 2000
just to train workers for Nissan's assembly plant
near Canton, the cost per employee came out
to more than four times the state's per-pupil
expenditures in K-12. In 1995, only a threatened
lawsuit by a teachers' group prevented Alabama
Governor Fob James from raiding the state's
school fund for some of the remaining money
practice of buying jobs can prove highly addic
tive and downright unhealthy over the long haul,
especially if state and local leaders are reluctant
to invest more of the benefits of economic devel
opment in human and community development.
As I suggested a while back on my website, .ww.
cobbloviate.com, instead of cashing in on some
of these gains in order to make their state or
town something more than the equivalent of the
ugly kid whose parents have to hang a pork chop
around his neck to get the dog to play with him,
too many of the champions of industrial give
aways in Alabama, Mississippi and elsewhere are
simply resorting to bigger pork chops.
James C. Cobb
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