The Plain Dealer, Feb. 3
For the more than 160 workers then employed at the plant, for the city of Brooklyn, Ohio, and for the Cleveland areas storied history of garment-making, the arrival in 2015 of a high-end men’s suitmaker to take over the closing operations of Hugo Boss AG in Brooklyn was fortuitous.
The acquisition was greased by generous grants — $150,000 from the city of Brooklyn to retain and create jobs and payroll; a $420,000 economic development grant from JobsOhio, also apparently tied to job and payroll goals; and an offered $650,000 Cuyahoga County loan, which a county official told reporter Olivera Perkins the company never completed the paperwork on.
With Keystone’s Jan. 10 “WARN Notice of Plant Closing” to the Ohio Department of Jobs and Family Services — informing the state of its intention to close the plant no later than March 11 and lay off all the 140 workers now employed there — the city of Brooklyn has determined that Keystone will be in default of those terms.
But what of JobsOhio’s grant? Three weeks after Keystone’s formal WARN letter to the state, JobsOhio still won’t say whether it will seek to claw back all or some of the $420,000 grant.
Ohio citizens deserve to know, at a minimum, how JobsOhio frames job-creation and retention requirements in its grants and how it enforces those requirements.
The Star Beacon, Feb. 3
A February 2017 report from the Upjohn Institute for Employment Research looked at 26 years of incentives in 33 states. Since 1990, tax breaks have tripled — in 2015 alone the total amount of incentives given to businesses nationwide was $45 billion — but when it comes to keeping companies the results are “statistically insignificant,” according to Slate.
So if businesses are going to prioritize other things, such as the workforce, and studies show incentives don’t have a tangible effect on where businesses locate, state and municipal leaders across the country need to ask an important question — what is the point?
Changing the system would require a major shake-up that extends far beyond a few counties or even states. What is needed is a national, or at least regional, moratorium on these wild monetary incentives big businesses might not even need.
But there is still a place for a public-private partnership. Instead of tax breaks, what would make more sense is a system focused on worker training and workforce retention programs. As we saw with Amazon, workforce issues are driving most business decisions. Ultimately, a well-trained workforce is a more valuable drawing card than any tax incentive.