Wednesday, June 22, 2005

Giving Incentives for Poverty Level Jobs

As their taxes are waived, employees of Jabil can take heart. They not only will have new jobs, but they likely will qualify for food stamps.

That’s right. The Memphis and Shelby County Industrial Development Board actually gives away taxes for jobs paying $8.50 and $11.50 an hour. If you calculate salaries like the federal government does, rather than the way the IDB does, the annual salary calculates out to $15,937 for the lower paying hourly wage and $21,562 for the higher. At the lower, a family of three can qualify for food stamps, and at the higher, a family of five can qualify.

Most amazing of all is that the IDB not only gives incentives to offer Memphis workers food stamp wages, the jobs pay less than the per capita income in Shelby County, thus beginning a self-fulfilling prophecy where public policies create low-skill jobs that pay low-wage salaries that attract more low-skill jobs that…

With Shelby County as the world headquarters for the creator of global commerce, FedEx; with a major facility for UPS and with an airport and a highway grid often called the best in the U.S., it’s easy to think that distribution jobs would need no other incentives to locate and expand here.

Coupled with the new policy passed by city and county legislative bodies whose end result is that distribution warehouses rarely pay property taxes any more, it begs the question of why this remains a targeted industry for Shelby County tax freezes and why tax freezes aren’t limited to companies who pay a living wage.

There are some days when those jobs at McDonald’s must look pretty good to some Memphis workers.


turnerarch said...

I can't help but feel that we are facing a chicken and the egg situation. The Memphis region is not known for its highly educated workforce. To some degree we are a victim of our own success and failure. The drive to become "America's Distribution Center" came with the hope that companies locating warehouses here would, after a few years, choose to relocate the means of production here as well. The former succeeded and the latter never materialized. Now we are left we a job market heavily biased toward low skill, low paying employment opportunities.
The main question remains, would any amount of incentives attract the sort of industry here that Memphis so craves despite such a limited pool of educated workers?

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