Home > Uncategorized > Instead of Subsidizing Mega-Corporations with Incentives Like WI, Why Not Subsidize Small Businesses Like Richmond, VA?

Instead of Subsidizing Mega-Corporations with Incentives Like WI, Why Not Subsidize Small Businesses Like Richmond, VA?

In his recent Common Dreams post describing the deplorable incentives offered by Wisconsin to Foxconn, Sam Pizzigati describes a promising alternative approach to economic development offered by the City of Richmond Virginia:

The city of Richmond in Virginia is moving in one hopeful direction. Richmond has begun an Office of Community Wealth Building that aims to enrich local residents instead of billionaire CEOs. The city is focusing on everything from improving regional transportation systems to fostering locally based social enterprises. The Democracy Collaborative, a national organization, has fashioned a network of localities involved in similar “community wealth building” all across the United States.

As one who served as an ex-officio member on a County Economic Development Committee, I recall many debates about decisions to use scarce economic development dollars to subsidize a new business while providing no support whatsoever to existing businesses that employed a comparable number of wage earners. But I cannot recall any discussions about subsidizing small businesses that, in aggregate, might imply even more wage earners than a spiffy new facility. Economic Development was all about new employers… and if the new employer was a famous “name brand” it was even better! This kind of thinking led to the county supporting the construction of a new Walmart while simultaneously offering workshops to smaller businesses on how they could compete with Walmart. This kind of decision making by local governments across the country led to low-wage jobs, vacant store fronts, but lower taxes and cheaper food and merchandise. But as we move forward, more and more people are beginning to question the wisdom of this approach. Unfortunately, though, changes in the thinking will not happen quickly. As Mr. Pizzigati reports, while operations like the Democracy Collaborative could “…use some encouragement from the federal level”, it won’t be coming any time soon:

President Trump has proposed a budget, notes Greg LeRoy of Good Jobs First, that eliminates “successful federal programs that benefit small- and medium-sized manufacturers.” The contradictions between Trump’s budget cuts for these programs and his White House cheerleading for the enormous Foxconn subsidy deal, adds LeRoy, “boggle the mind.”

They only boggle the mind if one believes that political donations don’t matter… and if one wants to continue the belief that free speech should be based on the amount of money one can contribute to a campaign.

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