Jobs don't negate losses
It took the promise of $33 million in tax credits and $34 million in state spending on infrastructure to lure 550 potential jobs to a patch of quasi-public land where as many as 400 actual jobs are about to be lost, and a teary Tom Finneran says he has not felt this excited since the birth of his daughters.
The hype surrounding the decision by
In a state that has been hemorrhaging jobs and population for the better part of this decade, it can only be good news that a $50 billion international drug giant wants to build a $660 million plant in economically depressed Central Massachusetts, even if the first employee will not begin work until 2009. But it is fairto ask: Why the Herculean effort to bring future jobs to the same industrial park where so little effort is being expended to save existing jobs eliminated by Gillette's recent decision to close one of the two packaging plants it operates at Devens?
The average annual salary for jobs at the planned drug plant is projected to be $60,000. The Gillette workers, most of them Hispanic immigrants working without benefits, make an average of $8 an hour, according to Loren McArthur of the Merrimack Valley Project, a coalition of religious and labor groups fighting without any high-profile political support to save the Gillette jobs. A march and rally is planned June 17 to highlight the plight of workers who will be out of jobs next fall just when Bristol-Myers Squibb plans to break ground on its new plant.
Public officials, especially those with presidential aspirations, are desperate for signs of job growth. Corporations, especially those answerable to anxious stockholders, are eager to engage in bidding wars with states competing to cut them the best deal. Why wouldn't Bristol-Myers Squibb locate here when officials have promised to do everything from building a waste treatment facility to waiving restrictions on building heights? But why no effort to stop Proctor & Gamble Co. from moving one of its Gillette facilities at Devens to Greensboro, N.C.? Why no demand that it keep open its other facility at Devens? It is not good news for the 1,000 workers at that second unit that Gillette has not renewed a lease set to expire next year.
Lawmakers should take a hard look at tax incentives for Bristol-Myers Squibb. Peter D. Enrich, a professor at Northeastern University School of Law, notes that the drug manufacturer agreed to build before the Legislature approved the tax breaks. Maybe it will build without them. ``Use of tax breaks has been shown over and over again not to be the deciding factor in where a business locates," he said, adding that such incentives ``are under a constitutional cloud" and are ``lousy public policy" because of the dramatic loss of tax revenue.
Enrich represented taxpayers who challenged Ohio's investment tax credit. Because the US Supreme Court ruled that the taxpayers did not have standing to bring the suit, the case went back to the Ohio courts. Similar suits are pending in Minnesota and North Carolina.
Corporate tax breaks are an old, failed idea in Massachusetts. Fidelity reaped huge tax benefits in the 1990s from the state's effort to retain jobs in the mutual funds industry. Fidelity announced last January that it is moving 1,500 of its 12,800 jobs out of state by 2008. Those jobs are going to Rhode Island, which -- surprise! -- offered them tax incentives to relocate.
The promise of a job for someone to bottle rheumatoid arthritis medication does not negate the loss of a job for someone who has spent years packing electric razors. This is not a sane approach to economic development; it's corporate blackmail.
Eileen McNamara is a Globe columnist. She can be reached at mcnamara@ globe.com. 