While attending a conference recently, a couple of friends from Louisiana gave me some friendly grief, telling me how they are “kicking some Yankee butt,” or some such.
Amused, I inquired, “What are you talking about?”
They then proceeded to remind me how a few months ago, Gardner Denver Inc. decided to move 230 manufacturing jobs out of Sheboygan to Monroe, La.
This decision prompted Louisiana Gov. Bobby Jindal, who is believed to be one of the frontrunners for the Republican Party presidential nomination in 2012, to say, “Today’s announcement follows a recent trend – since early 2008, leading companies have announced moves of their headquarters or other significant operations to Louisiana from states such as California, Georgia, Mississippi, Rhode Island, Virginia and Wisconsin. We expect to see even more of these moves in the future as national executives become increasingly aware of Louisiana’s recent progress with ethics reform, tax competitiveness and workforce development.”
That’s a great campaign sound byte (aside from the “progress with ethics reform” part), but let’s look a little closer at this Baton Rouge ruse.
To convince Gardner Denver to leave Wisconsin for Dixie, the State of Louisiana offered an incentive package, including a grant of up to $9 million for relocation expenses. The City of Monroe kicked in a 124,000-square-foot building expansion.
Let’s do the math here. You divide $9 million by the 230 jobs, and Louisiana is paying more than $39,130 per job. By the way, the annual salary of the Gardner Denver jobs is estimated at $37,000.
Now remember, this is the same Bobby Jindal who refused to accept federal dollars to provide extended unemployment benefits to people who have lost their jobs in his state.
When I returned home from the conference, I was greeted by the news that MillerCoors LLC had officially opened its new corporate office in Chicago. The celebration was toasted by Democratic Chicago Mayor Richard M. Daley, who bragged about how MillerCoors had received more than $20 million in incentives from the State of Illinois and his city to locate its headquarters along Wacker Drive. MillerCoors plans to bring 375 jobs to the Windy City, leaving Milwaukee and Golden, Colo., out in the cold.
Again, let’s do the math. You divide the $20 million by 375, and you get an Illinois price tag of $53,333 per job.
It’s easy to understand how politicians, both left and right, love to pose for holy pictures after stealing away businesses from other states.
But this strategy of corporate welfare is a race to the bottom. Wisconsin would do well, not to focus its resources upon stealing away businesses from other states by giving away taxpayer dollars, but by doing everything it can to make sure the businesses that already are here can expand and hire more people.
A great first start would be to make more low-interest loans available for Wisconsin businesses to build new facilities or expand existing factories and offices, to buy more equipment or to hire more people. Many Wisconsin business owners tell me they simply cannot get financing from banks to expand their companies or launch new commercial real estate development.
If the private sector won’t finance these projects, perhaps the state can, even by leveraging federal stimulus dollars.
Let’s light this candle and get this economy rolling again. Daylight is burning!