As Donald Trump brags about “jobs” deals like the one supposedly bringing Foxconn to Wisconsin, Bryce Covert takes a look at the reality of such deals in general …
Incentive packages have tripled in size since 1990, as states feel increasing pressure to up the ante to attract jobs for their residents. Yet research has found that these packages rarely change companies’ behavior. One study found that companies receiving tax incentives wouldn’t have left the states that offered them anyway. On top of that, the tax breaks had no discernable impact on job creation or company expansion. […]
Meanwhile, these packages don’t correlate with better economic performance. State tax regimes don’t have a substantial impact on economic activity. Rather, they represent a hefty giveaway from a state’s taxpayers to a large corporate entity.
… and the Foxconn deal in particular:
If Foxconn’s Wisconsin factory actually does create 13,000 jobs, the upper limit of what the company estimated, that would mean the state is spending $23,769 per job that will pay an average annual salary of $53,000. But so far the company has only actually committed to 3,000 jobs—which would mean Wisconsin shelling out a whopping $1 million per job.
Best deals ever! Winning!