As a homeowner in Cary, I have been getting a good lesson in how government giveaways aren’t all they are cracked up to be.
Last month New York-based MetLife revealed it will be moving employees from Northeast locations to two campuses — one in Charlotte, one in Cary here in Wake County.
The state, county and city all came forward with various goodies to lure the insurance giant here, the news media reported. Wake County commissioners OK’d $1.9 million in special incentives. They were so eager to do so that they watered down their own rules about how much companies have to invest to qualify for the breaks.
Also, the state gave the company a sweet deal worth $94 million; Cary also chipped in $1.9 million.
Part of all that is my tax money. What am I getting for it?
In one sense – nothing. Or at least nothing North Carolina, Wake County, Cary and I wouldn’t have gotten otherwise. I’ve lived in Chicago, New York and Pittsburgh. I’ve seen how businesses are treated in those areas. Companies should be glad to get out of there – even to North Carolina, where the business climate isn’t optimal. Some news reports bolster my suspicions that MetLife was coming here anyway, but was happy to accept freebies.
It’s not like the company is impoverished. For 2012, it reported a handsome profit of $1.2 billion.
On the other hand, the Cary site is expected to employ 1,300 people making good salaries. They’ll buy houses, groceries, etc., in theory boosting the local economy.
But is that entirely a good thing? Only if it’s real growth, not just shuffling jobs around. Yet the Met Life deal doesn’t “create new jobs,” it will bring old jobs here. So it won’t be providing jobs for unemployed North Carolinians, and potentially will put more Tar Heels out of work.
Specifically, is it fair that Fred’s coffee shop or Connie’s software start-up has to carry the full costs of being in Cary — and in Wake County and North Carolina — while a multibillion-dollar corporation gets special breaks? The financial burden will be shouldered by those businesses not enjoying the political privileges granted to MetLife. How many jobs will be eliminated or never created because that burden becomes too heavy?
Observers must read past the headlines announcing “new jobs” courtesy of the MetLife deal. Such corporate welfare schemes come not only with the easily seen headline benefits, but also with significant yet harder-to-detect costs. Chief among these costs are not only the jobs and business ventures foregone due to the uneven playing field created by government picking winners and losers, but the loss of freedom as more of our economy becomes further politicized.
Finally, the MetLife situation is far from unique in North Carolina. These kinds of special deals and favors are littered across the state. The latest example: a much-touted Lincoln County project is in trouble. Denver Global Products markets hybrid-powered lawn mowers. It was in line for $3.6 million in state incentives to locate a big facility in Lincoln County. According to media reports, Lincoln County in March approved an $800,000 grants and incentives package. But problems with the mower have reportedly hurt sales and led to layoffs and walk-outs by executives. Right the project’s future looks hazy, at best.
Sadly, that’s a common theme when the government tries to pick winners. All too often, government handouts backfire.
So in the long run we all suffer. That can be seen in an unemployment rate that continues to be fifth highest in the nation, and a shaky economic outlook. In the end, we may think we’re getting government goodies, but overall the current system takes a lot more from us than it gives away.