What are they thinking?

Sometimes things seem so obvious to me that I hesitate to mention them.  But the more I read the news the more I wonder “Is this hard to understand?”

 

Case in point: Indiana is struggling to rebuild our workforce after years of decline.  Recently the Governor and a staff of 80 traveled to the Far East to court overseas investment, shortly after their return, the Governor announced that Toyota would bring 1000 jobs to the Lafayette SIA plant.  The Governor’s office proudly announced that they had gotten a deal; they were only paying $22.2 million dollars or $22,200 per job to bring the Toyota deal to Indiana.   

They point out just how cheap this deal was:

  • The incentive package that brought SIA to Lafayette in the 1980s was $90 million for the first 1,500 jobs, or about $60,000 per job.
  • It took $57,000 per job to bring Toyota's pickup truck production to Princeton, Ind., in 1998.
  • State and local incentives for a new SYSCO Corp. food distribution facility in northern Indiana, a deal announced earlier this month, come to $11,200 per job. 1

Local Lafayette officials moved quickly to help close the deal:

  • Cinda Kelley, acting executive director of the Lafayette-West Lafayette Economic Development Corp., asked Tom Easterday, the senior vice president of Subaru of Indiana Automotive, what local governments could do to facilitate the deal. She quickly found that, "The biggest need is training," she said.

    Funds for that purpose will come from economic development income taxes, which local residents and businesses pay.

    "We've been stockpiling money for a couple of years for something like this," said David Byers, president of the Tippecanoe County Council.     1

  • The local Indiana Workforce Development office and other local entities will provide about $475,300 in assistance for recruiting, assessing and hiring employees. 2


I applaud the State for working so hard to bring jobs back to Indiana, and I am happy for our friends, the residents of the Lafayette area.  These jobs will help shore up a sagging job market in the area. 

 I just wonder if the Governor realizes that he did not have to go so far, and spend so much money to build the workforce:

  • In 2003 in Indiana alone there were over 264,000 small businesses employing 2.5 Million people and providing an annual payroll of $81 billion. 3

I have to pause here to let that sink in. 

 

Not 1000 jobs, but 2.5 million jobs, all in one place.  You do not have to travel to Japan.  Heck, you already have our phone numbers.

 

Let’s imagine that the State were to offer every small business $22,200 to hire one new employee.  That would create 264,000 jobs, in a week.  OK, it would cost the State more then it can pay.  Let’s trim it down, let’s just say the State offers $22,200 to every small business to hire one employee that earns $15 or more per hour.  How many jobs would that create, maybe 100,000?  Still to much for the State to pay?  Let’s trim it down again, after all there may not be 100,000 people in Indiana that really want a good job.  What if the State offered $10,000 to every small business to hire one employee for $15 or more per hour?  What if the State offered not to pay the money out, but to eliminate payroll, income and workforce development taxes until a $10,000 credit was used up?  How many jobs would it create? 

 

I guarantee the number would be staggering.

 

And the taxpayers would not have had to provide 80 people with an all expense paid trip to the Orient.

 

1. Source:  Lafayette Journal and Courier

 

2. Source: Inside INdiana Business

 

3. U.S. Census Bureau

 

 

 

 

 

 

 

 


Steve Weigle is the founder of The Village Geek, and has been a Small Businessman for more than 30 years.