Fwd: Fw: Payoffs for Layoffs

[Doug Henwood]

>>>  "Greg LeRoy" <goodjobs at ctj.org> 02/15 1:37 PM >>>
One of the most persistent criticisms of development subsidies is that they
fail to ensure job creation or even job retention. Indeed, it was the plant
closing movement's revealing that closing factories had been subsidized that
triggered many of the pioneering reforms -- such as disclosure and
clawbacks -- we see taking root in many places today.

The Center for an Urban Future in New York City has just released a damning
study, "Payoffs for Layoffs," that documents this problem among subsidized
companies there.  To quote from its summary: "Overall, it details 39
companies that announced major layoffs, large-scale mergers (which typically
resulted in layoffs) or put themselves up for sale (which are likely to lead
to layoffs) a short time after benefitting from retention deals. In the past
five months alone, at least 16 companies that received city incentives
announced significant job cut."

Those 39 companies comprise virtually *half* of the 80 companies analyzed!
As we've been preaching for 15 years: company-specific deals are risky; you
never know if a particular company will merge or make a mistake and the
subsidy- investment will be lost. By contrast, investing in public goods --
such as education, skills and infrastructure -- means that taxpayers will
retain their investment, no matter what happens to any individual company.

This is model research that could be replicated by any grassroots effort.
See it at:

http://www.nycfuture.org/econdev/0211payoffs.htm

Greg LeRoy
Good Jobs First -- www.goodjobsfirst.org
goodjobs at ctj.org