Stop Feeding The Hand that Bites Us

Source: Alexandra Bradbury, Labor Notes, September 8, 2014

… The politicians boasted they’d persuaded VW to “invest” $600 million in Tennessee—though almost $300 million of that will come from the state’s taxpayers. And Chattanooga was VW’s logical choice for the SUV anyway. … The plant was built just a few years ago, producing 2,400 jobs with an “investment” of $1 billion. Half of that, too, came from taxpayers. The argument goes that subsidies like these produce more jobs than meet the eye, a “multiplier effect.” Auto parts suppliers spring up. People earning good incomes at the plant spend more at local stores and restaurants. It’s true enough that jobs beget more jobs. A University of Texas at Knoxville study found the VW plant indirectly created 10,000 jobs. But another study of the plant’s outcomes, this one by Tennessee State University, had more sobering findings. One-third of Chattanooga’s African-American residents live in poverty. Extreme poverty in the city has actually increased in the past decade, despite the new plant. While the state’s been handing out money to the private sector, the people of Tennessee have been coping with drastic cuts to public programs. Since the economic crisis, cuts have hit health services, services to the elderly and disabled, and higher education. What about the “multiplier effects” of all that?…