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:
- Good Jobs First says 2022 was “a mega-year for mega-deals,” citing NY’s $5.5 billion Micron subsidy as one example.
- Is the Penn Station area really blighted? (New York Times)
- Amazon repaid $2.5 million in tax breaks for 150 Long Island jobs it never created (Newsday).
- Richard McGahey writes about what it takes to improve troubled cities (Forbes).
- The Yankee Stadium parking company owes NYC $162 million (The City). As Field of Schemes details, NYC has provided huge subsidies for the stadium.
- The Buffalo Bills stadium subsidy is no longer the largest in history – but it’s still terrible, says Chris Churchill at the Times Union.
- The Comptroller’s office released its 2022 “Public Authorities by the Numbers” report. Oh yeah, they also got most of their contract oversight powers back.
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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