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Corporate Welfare: State Taxpayers Pay to Train Workers for Large Corporations
Wednesday, January 11, 2012

Taxpayers are increasingly covering the cost of training for a corporation’s workforce, without getting any long-term benefit in return.

For instance, North Carolina has spent a million dollars for 400 residents to learn skills for working in a Caterpillar factory, in addition to a $4.3 million on a community college program customized specifically to meet the company’s labor needs. While the investments are expected to help Caterpillar remain in the state, there are no assurances that will happen.

Previously, the state spent $2 million to train employees for a Dell factory. Five years later, the computer maker closed down its operation, costing North Carolina nearly 1,000 jobs.

Among the subsidies given to corporations, according to a report by Good Jobs First, are income tax credits, cash grants, low-cost or forgivable loans, reimbursement for worker training expenses and reductions in property taxes.

-Noel Brinkerhoff

Private Sector Gets Job Skills; Public Gets Bill (by Motoko Rich, New York Times)

Money for Something: Job Creation and Job Quality Standards in State Economic Development Subsidy Programs (by Philip Mattera, Thomas Cafcas, Leigh McIlvaine, Andrew Seifter and Kasia Tarczynska, Good Jobs First) (pdf)

Comments

Anthony Werner - 1/26/2012 3:34:39 AM
there is another alternative to capitalism which was set out in a book published in 1879 in san francisco by henry george. the book, progress and poverty, became a worldwide bestseller at the end of the 19th c and beginning of 20th. the author seeks an answer to the question: why it is (it still is the case) that with the production of so much wealth there is still poverty? clearly it is not a lack of wealth that is the problem: it is the distribution of that wealth that is unfair. what henry george showed is how a tax reform could lead to a fairer distribution of wealth. the book is still in print or if you prefer to discover the remedy in novel form, it has been set out by john stewart in the president which looks at how a president seeking new policies for his second term, stumbles across henry george and decides to go for it.

John Steinsvold - 1/23/2012 7:33:49 PM
an alternative to capitalism (if the people knew about it, they would demand it) several decades ago, margaret thatcher claimed: "there is no alternative". she was referring to capitalism. today, this negative attitude still persists. i would like to offer an alternative to capitalism for the american people to consider. please click on the following link. it will take you to an essay titled: "home of the brave?" which was published by the athenaeum library of philosophy: http://evans-experientialism.freewebspace.com/steinsvold.htm john steinsvold “insanity is doing the same thing over and over and expecting a different result." ~ albert einstein

Mr. Blair M. Phillips - 1/14/2012 5:49:11 AM
i agree with the article but not with the present tax structure. corporations today and since the early 60's are paying little or no taxes while the rest of the society are paying the bulk. why not create laws that (1) give citizens/employees the right manage a corporation and (2) give citizens/employees the right to see the books and (3) give citizens/employees the responsibility of paying "what they think" is fair taxation contributions. sounds like a win/win situation to me!

Mary Ann Martorana - 1/13/2012 1:59:14 PM
ironic that the worker/taxpayers are being made to pay for being trained to wage slavery. wake up people.

The Glove that fits - 1/13/2012 12:49:17 AM
the department of defense and offense will waste much money to promote outstanding lies and assertions. reputations matter. money is no problem. the only thing keeping bankers in business is the hope jesus will come to take away our debts, and lead us to a victorious season against the evil ones, who are protestant, gun bearers and know their rights.

Tom - 1/12/2012 5:00:38 PM
just another example of too much government in all aspects of our lives. and as usual, it seems the states are too stupid to protect themselves from an employer leaving after getting so much state funding. i have seen many contracts in years past in the corporate world where there were performance penalties if the customer did not meet certain revenue committments since the price he received was based on the seller getting a certain minimum revenue. so why couldn't these dumb states put in a similar clause? they should figure out what amount of tax revenue they need in order to recover their costs. otherwise, bmw or whomever, pays a penalty. unlikely for sure but you never know.

czander - 1/12/2012 9:28:21 AM
there are the demands made by corporations and their ceos who want mbas ready to jump into executive roles and make significant contributions. they see the b-school as a training ground, and they donate large sums of money and send their executives to expensive executive programs where they expect schools to prepare them for leadership roles. the corporation has a direct investment in selected b-schools and they have turned them into “voctech” corporate training programs. ceos do not want to establish their own training programs because they find it much easier to donate a few million to their favorite b-school, offer their faculty consulting gigs, sit on b-school boards, and send their executives to a customized training program. b-school deans eagerly pursue these arrangements and offer ceos celebrity status on their campus. but there was a downside. in the process, b-schools have sold their souls, given up academic choice and freedoms, and pushed serious scholars aside in favor of “how to do it” motivational speakers and celebrity professors.

Jay Cast - 1/11/2012 6:20:43 AM
have you had the opportunity to look into walmart? they receive millions of dollars in tax abatement, grants for training among other perks from local and state governments wherever a store is built.