Bosses Get Skills, Taxpayers Get Bills
The New York Times’ economics beat reporter Motoko Rich reports that critics are starting to speak out against the amount of public money being spent on worker skills development that they say serves hiring companies before the state.
In North Carolina, the state is paying $1 million to develop job skills for 400 newly-hired Caterpillar employees. Further, a local community college has agreed to develop a custom curriculum for the industrial equipment giant, which they have valued at $4.3 million.
Rich notes that many companies have come to expect public funding for such programs in return of creating jobs in the local economy, though the sums spent by the state on training are typically dwarfed by the tax breaks and corporate credits used to lure companies to set up operations. North Carolina’s secretary of commerce, J. Keith Crisco, told Rich offering training was a valuable tool to make states competitive for valuable corporate attention.
“On the whole spectrum of things that are done to attract businesses, this is one of the best investments and highest return for the invested dollar that our state and many other states do,” said Crisco.
Many critics have warned of the danger in providing workers with a very narrow set of skills that probably won’t transfer to new positions. They say these programs provide extremely specific skills for potentially low-paying jobs that may not exist in a few years—exemplified in North Carolina by the closure of a Dell factory after just five years that put nearly 1,000 people out of work after the state spent just under $2 million on training.
Ross Eisenbray, the vice president of the Economic Policy Institute, told Rich that companies should be more responsible for funding the training of their own employees.
“The question is, why shouldn’t the company pay for this training?” Eisenbrey asked. “It’s for their benefit.”
Mark Pringle, the director of operations at a Siemans gas and steam turbine plant in Charlotte, N.C., told Rich that government training and development subsidies were fair compensation for the creation of jobs and the injection of money into the economy. The Siemans plant has received nearly $1.2 million in training for about 700 workers.
“At the end of the day we’re creating more jobs for the state of North Carolina,” said Pringle. “There’s no doubt it’s a competitive process.”