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Attracting Jobs

March 2, 2012 • Volume 22, Issue 9
Do tax breaks for business spur employment?
By Marcia Clemmitt

Introduction

Fans stream into the Yankees' brand-new $2 billion stadium in the Bronx (Getty Images/Mario Tama)
Fans stream into the Yankees' brand-new $2 billion stadium in the Bronx, built with substantial public funding, on Oct. 29, 2009, for game two of the World Series. Skeptics of taxpayer-funded business subsidies, including many economists, disagree about the claimed jobs and other benefits of subsidies. (Getty Images/Mario Tama)

Tax-supported subsidies aimed at luring companies to relocate or retain offices and factories in specific locations have proliferated. Local and state governments, engaged in fierce competition for jobs, are giving businesses up to $70 billion annually in tax breaks, new roads and training facilities and other incentives. Economic-development officials and companies that have relocated for subsidies say the incentives have spurred employment growth and helped some businesses stay profitable. But critics, who include many economists, argue that the incentives generate relatively few new jobs and instead lead many companies merely to shift operations from one place to another, depending on where they can broker the best deal. Among the most controversial subsidies are those supporting professional-sports stadiums. Supporters say new sports facilities help cities raise their profile and attract growth, while critics charge the subsidies fail to pay for themselves.

ISSUE TRACKER for Related Reports
Jobs and Skills
Oct. 04, 2013  Worker Safety
Mar. 02, 2012  Attracting Jobs
Jul. 22, 2011  Reviving Manufacturing
Jun. 04, 2010  Jobs Outlook
Feb. 20, 2004  Exporting Jobs
Jan. 11, 2002  Future Job Market
Apr. 24, 1998  High-Tech Labor Shortage
Oct. 24, 1997  Contingent Work Force
Feb. 28, 1992  Jobs in the '90s
Jun. 27, 1986  America's Service Economy
Jul. 22, 1983  Technology and Employment
Dec. 10, 1969  Jobs for the Future
Jun. 21, 1967  World Competition for Skilled Labor
Sep. 03, 1965  Shortage of Skills
Oct. 31, 1962  Retraining for New Jobs
Nov. 28, 1956  Shortage of Critical Skills
BROWSE RELATED TOPICS:
General Employment and Labor
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