Sunday, January 22, 2023

Bill Crawford: Are High-Cost, High-Wage Jobs Worth It?

A constant theme for governor candidates in Mississippi is job creation. Gov. Tate Reeves is no exception. When he announced for re-election he touted, among other things, his success in growing jobs.

He highlighted the $2.5 billion Steel Dynamics expansion coming to the Golden Triangle. The announcement said the company would create 1,000 new jobs by 2029 with average pay over $90,000. Reeves got the Legislature to commit $247 million in state incentives to secure the plant – a hefty cost per job.

The Governor also said Mississippi employers added “nearly 22,000 jobs over the course of 2022” and projected an additional 44,000 jobs for 2023.

A critic of massive public investments to lure industry, Northside Sun owner and publisher Wyatt Emmerich asked, “If it’s necessary to bribe companies to Mississippi with huge tax breaks, why were 22,000 jobs created in 2022 when there were no company-specific megadeals?” He continued saying, “What’s luring the 44,000 jobs predicted in 2023 if only 1,000 of them will be created with massive state tax incentives?”

No doubt the Governor and folks at the Mississippi Development Authority would point out that numerous other deals – just not so mega – helped attract a number of other major projects.

“In 2020, we had 36 corporate investments adding 4,485 jobs,” MDA deputy executive director Laura Hipp told Y’all Politics in September. “In 2021, we had 40 corporate investments adding 4,149 jobs. In 2022, we have already had 17 corporate investments adding 1,522 jobs, and we look forward to announcing more economic development wins before the end of the year.”

The interesting aspect to this comes from the numbers. The Governor talked about adding 22,000 jobs and 44,000 jobs. MDA talked about attracting 4,485 jobs, 4,149 jobs, and 1,522 jobs.

The difference results from how our jobs get created. Some come from state investments, the ones MDA usually talks about. The others, most others, come without state investments. That gets to Emmerich’s point. Why does the state need to spend so much on so few jobs when more jobs get added without state investment?

One answer comes from studying the types of jobs that get created. More than half of the 20,000 or so jobs added in 2022 came from the leisure and hospitality and retail trade sectors. They are the sectors with the lowest average annual pay according to the U.S. Bureau of Labor Statistics – leisure and hospitality jobs, the sector with the greatest growth, paid $20,079 and retail trade jobs $30,699.

Manufacturing jobs, the jobs governors like to claim credit for, accounted for slightly under 25% of the increase and paid $53,947.

It seems to take major incentive packages to attract companies with high wages like Nissan, Toyota, Continental Tire, Yokohama Tire, and Amazon to Mississippi.  

Are they worth the investment? Governors tend to think so.

“Give thanks in all circumstances” – 1 Thessalonians 5:18.

Crawford is a syndicated columnist from Jackson


Thanks Gov said...

Tate has done an amazing job creating a better state with more opportunities

Anonymous said...

No industry will set up shop in this shithole without a lot of financial incentives. This is because Mississippi has a long history of fucking up. My grandpa still tells stories of how Jacksonian's contributed to the bankruptcy of Western Auto because they decided to build a warehouse here and the theft was endemic. There are many such cases of business thinking the cheap labor was worth it, only to find the lazy workers and theft will cost more. This means state government has to offer really good incentives to compensate for these losses.

Anonymous said...

Sometimes yes and sometimes no. Two examples- Nissan yes, and Kior no.

Anonymous said...

The best long term incentive for growing business, jobs and prosperity in MS is to initiate Parental Choice and Vouchers in MS education.

This should be the single most important policy commitment in every single election in the state.

Anonymous said...

Give it up 10:16. Most of the people that vouchers would help have been brainwashed into not wanting them.

Anonymous said...

The limit to be considered a small business 1500 employees.
That the Steel Dynamics won't reach 1000 or the $90,000 average until 2029 is "telling".
Did you even figure out if MS companies were doing the construction work and how many temporary jobs at what wages that would bring to Mississippi if any?
While having small businesses in terms of " in State employment is indeed good news. But,what you really need to do Governor, is the math on how long it will be before the employees can recover the hundreds of millions in tax dollars that have been "gifted" for start up construction.
It's one thing to have research or industry given a reasonable land lease rate, it's quite another to gift them every dime of start up.
And, I hope you have evidentiary assurance their taxes on profit are on what is manufactured here are calculated properly.
I'm a bit worried as Steel Dynamics could show this facility as a loss depending on the production stage, where final production values are set, and tax deductions that will apply.

Don Drane said...

Government doesn't create jobs. That includes the MDA, a governor and any other elected official in any capacity. Government only helps guide the creation of circumstances that will attract (create) jobs. Mississippi fails in that responsibility.

Flags, lack of adequate healthcare, too many poor public-school districts, a failed capital city and kicking multiple cans down multiple roads are NOT attractive circumstances, although in the lack of evidence to the contrary, some believe they are.

For those of you who think tax breaks/incentives and 'money thrown at prospects' is a waste...look no further than Ingall's Shipyards 70 years ago. That was the first occurrence in this state of BAWI (balance agriculture with industry), the literal genesis of what is now MDA with its tax abatement authority.

Was it worth it to incentivize Ingalls 70 years ago? Look at the billions in payroll dollars (jobs) over the years, some of which, of course, flowed into the Mobile area and even Louisiana. But, still, Pascagoula and much of our coastal region would just be another D'Lo without Ingalls.

Forty-five years ago, Washington County, primarily Greenville, began a strong effort that resulted in the recruitment and relocation of 40 or so well-paying industries that either moved to the area or expanded. Most of them were lured with tax abatements, available labor and proximity to rail, highway and the river.

They came and they stayed awhile. Some left when the tax abatements expired. Others left when the labor force (and its work ethic) soured. Boeing left when Senator Stennis retired and moved to a nursing home in Madison.

Others, like Schwinn Bicycle pulled up stakes and left the country entirely due to federal over-reach and regulations. Schwinn left the unionized territory of Chicago and brought its entire operation to Greenville, but Schwinn could not outrun Government regulation.

But the point remains...these programs, handled then by the forerunner of MDA, attracted millions in payroll dollars to the Delta region. And those dollars kept families off federal benefits and state unemployment compensation, until plants closed down and people moved away.

Anonymous said...

Crawford and Wyatt Emmerich advocate for continued economic disparities. No surprise.

Anonymous said...

Something is better than nothing. Give the tax breaks and get the companies here. Some honest folks still want to work for a living and not live off the gubmint!

Anonymous said...

Democrats' dependency bots can be brainwashed and yet still want the best education for their child. Many teachers and administrators in MS's existing sorry ass public school system could become motivated to compete for parental approval if education dollars were redirected to Choice and Vouchers.

Iowa is very near approval of what could become a model system for assigning education dollars to follow the student, wherever each attends school, public or private.

That'sMisterDeplorableToYou said...

@10:16 Amen. Imagine telling your employees that if they want to keep their job, they're going to be transferred to Mississippi where they'll either have to send their kids to something like Jackson Public Schools, or pay private school tuition.

Hookah said...

Remember how Nissan was going to bring everyone out of poverty? Last time I checked starting pay was $14 per hour then $17 per hour after 90 days. They have absolutely no work life balance and vote down unionization every time it comes up under the threat of moving production to Mexico.

Anonymous said...

Extraordinary investment of resources in public education might take several years to show the results, therefore a piss-butt politician whose interests never exceed his own term in office tend to ignore such investments. This is especially true in Mississippi where the focus is always on the examples of waste and not the many successes of public education. Fully funding schools will result in wasted money, not economic success, that's our mantra. Better to rely on private education and bribe industry to come to our backwards state. After all, the bribes will only go to help rich corporate interests, not to greedy teachers.

Anonymous said...

Hookah, I know several folks who work at Nissan and they all seems to be doing good and have a high standard of living. All are taxpayers and don’t live off the government like most Mississippians.

That'sMisterDeplorableToYou said...

@1:23 What's wrong with $17/hr which equates to $34K per year at full time, for someone with no marketable skills? Surely there's room for advancement with experience and demonstration of a solid work ethic. What do they pay their people in other places?

Anonymous said...

"Extraordinary investment of resources in public education might take several years to show the results"

Oh...The past fifteen years of extraordinary investment of resources in public education is not enough to gauge results?

Pray tell, what other sorts of investment do public schools in Jackson and Canton need in order to show results?

Or pick any other failing or almost failing district and answer the same question. The excellent public schools in this state don't graduate young folks to work in factories. Most 'factory jobs' and entry positions are more than willing to train but one thing is required of the labor force and that's a demonstrable work ethic, something pouring money into school systems will not provide.

Anonymous said...

The existing spending per pupil is enough. Let us say it is $12-15,000 per student per year. In the Parental Choice Voucher plan, that $12-15,000 goes toward the school chosen by their parents -and- away from the school they leave.

Get it? Spending is the same but punk schools with woke curriculum, substandard teachers and sorry results get punished. Choice + Vouchers = Meritocracy.

Anonymous said...

6:35 - when you dream through your pipe, it's called a pipe-dream. When you can figure out a system whereby vouchers and choice will work in this state let us know.

Tell us of an accounting and math-based model of bookkeeping and budgeting that would deduct dollars from a school's bank account and transfer dollars, through parents, to other schools.

And while you're at it, reveal the solution for the transportation conundrum involving poor parents of poor JPS and Canton students.

If 130 JPS parents (actually singular) want to split their children between Rankin County schools and Clinton schools with a good number targeting Madison County schools, how will they be transported and how many buses will be crisscrossing the metro hauling a few students back and forth?

And if I'm a JPS parent and want my elementary school kid to change to Clinton, my middle schooler to go to Rankin and my high schooler to go to Madison Central, will I have three buses lined up at my house in the morning with me guessing what time in the evening three buses might return them to my house - and which district pays for that transportation?

Vouchers and choice are nice buzzwords that can never be implemented.

Meritocracy? You do realize that's a system driven by ability and merit, don't you? Neither ability nor merit enter into a system of vouchering and choice.

Maybe Mississippi needs a system whereby applications for Charter Schools are approved, rather than rejected. Currently, approval and denial rest with the State Department of Education and that department views Charter Schools as the enemy.

Anonymous said...

5:16, how about mandatory fathers in the home, or at least mandatory child support from the male "contributor" that created the child.

Anonymous said...

Iowa is on the verge of a Choice & Voucher System where both the GOP governor and the Legislature expect it to pass. This could be a model program adaptable by MS.

Of course parents may have to transport their kids and may consider Catholic or other religious alternative school.

Writing bigger checks to piss poor public schools isn't working, administrations just lower standards.

Anonymous said...

Public schools are just another form of welfare payments to teachers who can not teach.

Anonymous said...

Vouchers and choice will have no impact on 'Catholic or other religious alternative schools' since those private schools are under no obligation or incentive to participate. No private school in this state is willing to sacrifice itself, its excellence or its students to social experimentation in the form of 'choice' or vouchering.

I've got no information on how many JPS parents (singular) provide transportation for their children, but I'll bet it's 15% at most.

The only thing Iowa and Mississippi have in common is corn.

Kingfish said...

The parents you worry about crossing district lines under a voucher system are probably not the ones you have to worry about. The parent who is willing to drive their kids some distance is probably the parent who takes an interest in the child's education.

Anonymous said...

5:16 Get one thing straight, Mississippi has never POURED money into education. Even in an inspired moment when the state finally developed a comprehensive plan for state-wide support the Mississippi legislature never fully funds it. In every state there are failures and successes, but Mississippi seems to only see the failures when public funding becomes comprehensive and involves ALL it's people. After the Civil War Mississippi's people were historically the most undereducated, therefore one would expect an extraordinary effort to catch up. No such luck. In fact just the opposite. Hence the results.

Anonymous said...

Don Drane:
Ingalls customer, the Navy and that there aren't many ports available to compete make that Ingalls a ridiculous comparison.

You are missing the importance of doing the math and market evaluations that can be done in advance that could predict which tax "investments" were " paid back" and which were "gifts" with no return policy available.

Now, despite all the evidence generated over several years by The Nuclear Waste Policy Council of why the Richton Dome is unsuitable for any nuclear waste storage AND the current status of the Tatum Dome, Tate Reeves is and will succeed in getting low level storage into The Richton Dome.

You miss too that short term employees were older when terminated and provided no data as to whether skills acquired helped or didn't were transferrable. In other words, you are long on generalities without any appreciation that details matter and can add to evaluation IN ADVANCE.
You get credit for understanding the same money could have been used to correct the problems that make Mississippi unattractive.
And, everyone seems to forget that few( historically)decades ago, solid businesses didn't need government "investment" other than on available land. They got human investors with a promised return on investment and/or used their profits to expand . A good plan increased their stock value.

Even before the computer age, making these evaluations in advance were possible. Now it's easier.

Anonymous said...

Agree KF and the people who buy in your neighborhood can also afford the house.

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Trollfest '07 was such a success that Jackson Jambalaya will once again host Trollfest '09. Catch this great event which will leave NE Jackson & Fondren in flames. Othor Cain and his band, The Black Power Structure headline the night while Sonjay Poontang returns for an encore performance. Former Frank Melton bodyguard Marcus Wright makes his premier appearance at Trollfest singing "I'm a Sweet Transvestite" from "The Rocky Horror Picture Show." Kamikaze will sing his new hit, “How I sold out to da Man.” Robbie Bell again performs: “Mamas, don't let your babies grow up to be Bells” and “Any friend of Ed Peters is a friend of mine”. After the show, Ms. Bell will autograph copies of her mug shot photos. In a salute to “Dancing with the Stars”, Ms. Bell and Hinds County District Attorney Robert Smith will dance the Wango Tango.

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In the spirit of helping those who are less fortunate, Trollfest '09 adopts a cause for which a portion of the proceeds and donations will be donated: Keeping Frank Melton in his home. The “Keep Frank Melton From Being Homeless” booth will sell chances for five dollars to pin the tail on the jackass. John Reeves has graciously volunteered to be the jackass for this honorable excursion into saving Frank's ass. What's an ass between two friends after all? If Mr. Reeves is unable to um, perform, Speaker Billy McCoy has also volunteered as when the word “jackass” was mentioned he immediately ran as fast as he could to sign up.

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If you get tired come relax at the Fox News Tent. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both will entitle you to free drinks.Get your tickets now. Since this is an event for trolls, no ID is required, just bring the hate. Bring the family, Trollfest '07 is for EVERYONE!!!

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