NC Pays Dell to Create Jobs in Poland

In a great review of Kenneth Thomas’s new book on the continuing alarming growth of corporate welfare among state and local governments in the US, David Cay Johnston tells of how millions of taxpayer dollars that could have gone to hire teachers, firefighters, and health workers to provide valuable services in North Carolina ended up subsidizing jobs in Poland instead:

Thomas tells how Dell moved a factory from Ireland to Poland in 2009 and then months later closed a four-year-old factory built in large part with North Carolina tax dollars. The Irish taxpayers gave €53.5 million to Dell, while North Carolina gave as much as $242 million. But when the Poles offered €54 million more, it was enough to get Dell to move about 1,900 jobs to Lodz.

And as for arguments that corporate welfare from state and local governments is necessary to create jobs, here’s what Thomas and Johnston have to say:

Any thought that giveaways of tax dollars stimulate foreign investment in America is demolished by a little table on page 101 of Thomas’s book. It shows that between 1985 and 2007, the American share of global direct investment fell by two-thirds, from 36.7 to 12.7 percent. However, in the 15 more-developed EU countries where subsidies were few, the share of foreign direct investment increased from 28.6 to 40.3 percent.

As yesterday’s news of $11 million in new incentives to keep Red Hat in the Triangle makes clear, the failure of corporate welfare to generate new jobs and investment has yet to reach the ears of North Carolina’s policymakers.