Manufacturing Job Creation Lacks a Common-Sense Approach

The typical intent of governmental economic development is to increase the number of manufacturing jobs and boost the positive economic contribution of manufacturing at either the state or federal level, or both. Such efforts typically take the form of financial assistance and incentives related to either relocating Original Equipment Manufacturer operations, or opening up new OEM operations local to a particular site. This approach has had dubious positive impacts. For instance, many states employ “smokestack-chasing” to lure manufacturers from another state to theirs. This is, of course, a zero-sum game from a national perspective. Similarly, the manufacturers opening up new operations often fail to live up to their employment and financial-impact commitments. Just ask Wisconsin how their deal with Foxconn worked out! Bottom line is that state and federal economic development programs add up to a significant investment that may or may not yield acceptable results. Yet these programs typically don’t provide financial assistance—at least not at the same level—to “incumbent” manufacturers who, by the way, have paid taxes and providing good-paying jobs for years, if not decades. Go figure! 

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