Subsidy Sheet: Micron cuts jobs months after massive NY subsidy deal


There wasn’t much subsidy news over the holiday, but there sure was a lot of bad press for Micron: The nation’s largest computer chip producer is laying off 10% of its workforce (Forbes). 

In all fairness, Micron isn’t the only chip manufacturer suffering during a global oversupply – the heavily subsidized GlobalFoundries is also laying off 220 workers from its Malta plant (Times Union). But the downturn does raise questions about the wisdom of New York State playing investor – Micron is set to receive up to $5.5 billion from the state, which also gave $1.4 billion to GlobalFoundries in 2011.

For now, elected officials are sticking to their guns – Onondaga County Executive Ryan McMahon says Micron’s cuts will not affect the company’s plans to build a plant in Clay, New York (WRVO). That’s probably true, but Micron’s cuts may impact hiring. It wouldn’t be surprising given how officials’ rosy job projections rarely reflect reality.

Other stories you may have missed during the holiday:

Liz’s Library

Welcome to Liz’s Library, where our Senior Research Analyst Elizabeth Marcello highlights timely research on corporate welfare.

Bigger business subsidies lead to bigger campaign contributions: Turns out there is a reason that politicians hand out so many business subsidies, and it’s not job growth. In a 2021 study, Sobel, Wagner, and Calcagno show a relationship between business subsidies and campaign contributions. Using a large database of individual state incentive awards and a difference-in-differences design, the authors show that once a state begins offering large business subsidies, campaign contributions increase by approximately $1 million in the average state. Specifically, they find that annual campaign contributions increase by approximately 106.8% from large business advocacy and trade organizations, 38.4% from construction and labor unions, and 20.5% from lobbyists and lawyers who represent large firms in the political process. This study suggests that beyond showing that business subsidies don’t work, we also need to find ways to overcome their benefits to incumbent politicians.

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