Tax Breaks and Economic Development: Where Are the Good Jobs?

I’m still puzzling over what I heard from Greg LeRoy, Executive Director of Good Jobs First.  The bottom line: all those tax breaks we’re giving to corporations aren’t really creating that many jobs, nor are they making a big difference in the success of American businesses.  As he points out, even though tax savings may sound big in dollars, taxes make up a very small share of a company’s finances.  Even worse, many of those tax deals, which significantly reduce state and local budgets, undermine the other elements that contribute to a good business environment.  Ohio has a revenue crisis these days, in part because we’ve cut taxes and deals to attract new businesses, but that in turn reduces funding for education.  And a well-educated workforce is one of the most important keys to attracting new business. 

So if it doesn’t really, work, why do states and localities keep doing it?  Two reasons, as far as I can figure out.  First, businesses have the leverage to cut these deals, because they can make large contributions to politicians and parties and because they control the most precious commodity in today’s economy: jobs. State and local governments are thus easily persuaded to do whatever it takes, including bankrupting themselves, in pursuit of that one-two punch – contributions and jobs. 

Second, making deals to attract new businesses sounds so good, and it’s a quick fix, or at least it’s a quick action that looks like a fix.  In order to be re-elected, politicians need to show that they are taking action.  Bringing a new company to town is a great-looking action – it creates nice photo ops and it sounds so promising.  And as LeRoy points out in our interview, the politicians may be long gone, often on to higher positions, by the time anyone can figure out whether the deal yielded solid results.  Investing in education and infrastructure just aren’t as sexy, and such moves take even longer to show results than tax abatements for new businesses do.   

So our leaders aren’t likely to fully embrace the more economically-just, progressive strategies LeRoy advocates (flip through the powerpoint on the Center for Working-Class Studies website for a list of these).  LeRoy offers two primary solutions to this problem.  One is education.  Good Jobs First provides information and tools to help you track  the results of subsidies to businesses across America.  If citizens demand accountability, we might be able to persuade our leaders to use public money to attract good jobs.  The other solution is organizing.  When citizens band together, we gain power.  One way to begin is to join the Mahoning Valley Organizing Collaborative and community groups from across the state next week in Columbus, for the April 5 Day of Action “to show they do not support balancing the budget through cuts, but instead through serious, long-term solutions including reforming Ohio's tax structure and generating revenue by balancing corporate and personal tax contributions.” 

Sustainable Agriculture is Good Business

Several of the people I’ve interviewed on Lincoln Avenue over the last couple of years have talked about the value of locally-produced sustainable agriculture.  They’ve discussed how it can not only help us eat better but also improve the environment, contribute to economic justice, and even help us fight back against the corporate take-over of American politics. All of that is coming from people like Eric Schlosser and Chris Hedges, who study social problems, and from folks who work on issues of hunger and urban development. 

 

This week, I finally talked with someone working on, or better yet with, the ground of sustainable agriculture, Floyd Davis of Red Basket Farm.  While the political and social aspects of this movement can get us thinking, Floyd’s discussion of his work makes a few other points clear.  One is that small-scale agriculture can be good business.  For Floyd, this work is at once satisfying and, if not hugely profitable then at least economically sustainable. It also demands a very different way of thinking about the work of farming and about the value of a business degree.  So much of what makes Red Basket work well is not about how Floyd treats the soil and the plants but about how he handles marketing.  His operation seems to be a terrific example of what it takes to run a small business these days: creative outreach and business models that adapt to the needs of diverse customers.  And when small-scale farmers understand that part of the business, they can make sustainable agriculture into sustainable business.

 Second, this movement is present, right here in the Mahoning Valley, and, in fact, the many relatively small farms in our area make this a good place to do this kind of farming.  While many small farms in our area don’t focus on sustainable practices, I’ve always appreciated the availability of so much locally-grown produce and the opportunity to buy from these small operations.  

Third, Floyd reminds us that we play a part in sustainable agriculture.  In fact, you can buy a share of Red Basket Farm this summer, through the Grow Youngstown Community Supported Agriculture project.  You could also visit the Red Basket website and find out how to go visit the farm. 

Fighting for Workers' Rights

Joe Schiavoni has been in the Ohio Senate for a little more than two years, but SB 5 has been his first major battle, and he’s gained statewide and national visibility for leading the first to protect collective bargaining rights for public sector workers.  His passion for the rights of working people is clear, as is his desire to develop into an effective political leader.  He’s still learning, and the SB 5 battle has provided some frustrating lessons in what it means to be a member of the minority party. 

While we can probably expect more anti-worker bills, such as one to limit overtime, the fight over SB 5 isn’t over, and it probably won’t be for a while.  The Ohio House held hearings last week, and it’s put the discussion on hold for the week ahead.  If the bill passes by April 6, opponents could pursue one or more ballot initiatives to overturn or limit its effects for the fall, 2011, election.  A petition would also stop the bill from being enacted until an election.  No one seems to know yet exactly what petitions will be put forth or whether they will be proposed for the 2011 or 2012 elections.  But as Schiavoni explains, this battle isn’t over. 

Persuasion through Information

To be  honest, the ideas Eric Schlosser shares in our interview are not – or should not – be news to anyone.  Because of his work – the book Fast Food Nation and the film Food, Inc. -- and efforts of folks like Will Allen, Michael Pollan, and local heroes like Elsa Higby, we should all know by now that there are problems in our food system.  But Schlosser brings two unique things to that discussion.

First, he recognizes that working conditions and pay are part of the problem.  Too often, when we talk about the food industry, we focus entirely on the (equally compelling) concerns of food safety, health, and the environment, forgetting that there are people involved.  Given my own involvement in working-class studies, I especially appreciate Schlosser’s attention to how the pursuit of corporate profits by the fast food industry and discount chains like WalMart are undermining the quality of workers’ lives. 

Second, he’s deliberate and compassionate in his choice not to preach.  He doesn’t want to tell us what to eat, and he doesn’t even have a plan to solve the problem.  He doesn’t demonize anyone (ok, except McDonald’s) or offer his own superior way of eating and shopping as the ideal.  Instead, he believes that information is the solution. He trusts people to make better decisions when they have better information.  That may be idealistic, but it may also prove more effective than more self-righteous approaches. 

They've Got Our Back

The battle over public sector unions has been going on for a while, and the bills going through the Ohio and Wisconsin legislatures are the latest, albeit the most aggressive (so far) attacks.  Part of what gives me hope amidst this war on the working class is people like Amy Hanauer and the incredible work she and her colleagues do at Policy Matters Ohio.  While some of us stand on protest lines and write letters to our representatives, the folks at Policy Matters are doing research, gathering the data that makes for compelling arguments and – if only legislators would listen – effective solutions to economic and social problems.   

Without getting involved in electoral politics, and indeed, in part because they don’t work on politics directly, Policy Matters is clearly watching out for the interests of Ohio’s workers and those with less access to power, whose voices are often drowned out by well-funded corporate interests.  Here are a few examples of their work:

·         * Testifying against Ohio SB 5, offering data about the educational levels and income of public sector workers compared with those in the private sector

·         * Keeping an eye on charter schools

·         * Drawing attention to the strategies employers use to avoid paying workers – also known as wage theft

·         * Tracking foreclosure rates in Ohio

And that’s just part of what they’ve done in the past month. 

People like Amy Hanauer and her staff can’t replace labor unions in representing the working class, but I feel a little less embattled, a little less vulnerable knowing that I can count on them to ask tough questions, gather the evidence, and make persuasive arguments about policies that affect the majority of Ohioans.