US gives big tech $9.3b in subsidies
Recently, Taiwanese electronics giant Foxconn received up to US$4 billion in tax breaks and other incentives from the state of Wisconsin.
And while news reports suggest that it is one of the biggest “packages” offered to a company, the fact is that the US has been known to offer subsidies to various tech companies in order to incentivize them for building new offices, factories, and business units.
In fact, in most cases, it is the cities and states within the US that compete with one another, vying for the attention of big tech companies looking to grow their business.
The reason that most of these cities and states cite when justifying their “investment” is the fact that the growth of the tech company in a particular area will create jobs and help employ the local residents.
However, this might not be completely true.
In the case of Foxconn, for example, company executives say that the new plant will employ 13,000 workers in Wisconsin.
However, given the fact that the state is experiencing one of the lowest unemployment rates in history, resting firmly at 2.8 percent, the investment to create 13,000 new jobs raises questions.
In fact, the state is even said to have initiated a new campaign to attract workers from other states to fill the vacancies that will be created as a result of Foxconn’s new plant.
According to CNN, “the state alone is poised to give the company up to US$3 billion in tax credits and breaks. It will take until at least 2043 for the state to recoup that lost tax revenue, according to Wisconsin’s estimates.”
However, it’s not Wisconsin alone whose actions demand scrutiny.
If the UK’s Guardian is to be believed, giant technology companies in the US, which include some of the world’s most profitable firms, have been pledged at least US$9.3 billion in state and local subsidies over the last five years – much of it coming from the coffers of cities and states with failing infrastructure, struggling schools, and broken budgets.”
Companies like Amazon, Apple, Facebook, and Google often receive tax breaks and other subsidies from the US, but their projects only create a few jobs in comparison.
The figure that the Guardian has put together doesn’t include the billions in tax breaks and subsidies that various cities and states have promised Amazon for its HQ2 project. Montgomery County, Maryland, for example, has offered tax breaks and infrastructure improvements worth more than US$8.5 billion.
The question at this time is really simple: Does the government really think these subsidies are going to help create real, high paying jobs for US citizens and residents?
16 August 2022
16 August 2022