Amazon: Not a bargain?



South Carolina always has offered generous incentives to mega-businesses. We’ve never liked this, because it warps our already dysfunctional tax system and gives an advantage to the newcomers over home-grown businesses, but we’ve accepted it in some cases because that’s what you have to do to compete with all the other states that do that.

But you have to draw a line somewhere, to identify a price you can’t pay to buy new jobs. Amazon’s request for a significant competitive advantage over our locally owned businesses, as well as Walmart, Best Buy, Lowe’s and all of its other big online competitors — companies that employ tens of thousands of South Carolinians — crosses that line.

Economic development deals often overlook the external costs - and there are often lots of them which need to be considered. In some cases, those deals costs more than those industries bring in. When they do (and the Amazon venture may end up being one of those cases) it's best for everyone to walk away from the table.

When a company has negotiated a deal which leaves local governments at break-even or loss for several years, those deals don't keep them from having to widen roads, build new classroom space and incur other infrastructure costs to accomodate the population growth which is attracted by industry.

A lot of jobs that come with places like distributions center pay relatively low wages, leaving employees who move to an area to seek public assistance to make ends meet. Tax deals with reduce state revenue means the burden for those programs fall upon everyone else who pays taxes.

Jobs are needed and sometimes deals can be worth the return on investment. South Carolina has done so with projects from small to large, but the state can't "buy" jobs by giving preferential treatment or dumping other costs off on taxpayers. If the Amazon deal is one of those, then it's better off for all parties to drop things and seek more equitable opportunities to bring jobs to our state.

1 Response to "Amazon: Not a bargain?"

  1. Anonymous 4/4/11 17:36
    Well said. - Gene

Post a Comment

Thanks for taking the time to share your thoughts!

To post a comment without having a Blogger account, select "Name/URL", put your name in, but leave the URL line blank. Email me if you'd like to comment, but need help making it work.