Why it’s hard to end incentives like Amazon’s

Amazon’s demands for its second headquarters has ignited a new debate about incentives.
Amazon’s demands for its second headquarters has ignited a new debate about incentives. The Wichita Eagle

From Carroll Gray, former president of the Charlotte Chamber, in response to “Amazon’s demands are madness; Congress should act” (Nov. 3 For the Record):

Former N.C. Treasurer and now banker Richard Moore calls on Congress to end “corporate welfare” in which a state offers financial incentives to attract a business expansion or relocation. I concur, with several caveats.

First, any responsible business will accept “freebies” if they are offered. Occasionally freebies are declined, but not often.

Second, financial incentives are only part of a site selection process. More important are workforce education and training capacity, transportation infrastructure (road, rail and/or air), quality of life considerations and attitudes about inclusiveness for the client’s current and future employees. For decades, Charlotte has worked hard on these foundations for quality growth.

Third, recruiting and retaining business investment is a competition with big payoffs for the winners – and a checklist for community improvement for the losers.

Finally, incentives remains one arrow in a community’s toolkit. Admittedly, as Mr. Moore points out, there is an unfairness to some businesses as the new company is subsidized to an extent.

But today, some state and local incentives are required to get into the recruiting game. The only way to evenly remove cash incentives from the business recruiting process is to prohibit it at the national level. Few states or cities unilaterally will stop offering incentives, but no recruiter will object if all states and localities cease the cash giveaways at the same time.