CNBC, the cable business news channel, predicts that North Carolina will be selected as the site for Amazon’s second headquarters. We are also told that it is between our state and Alabama in securing a Toyota-Mazda auto-manufacturing plant. Would we be starry-eyed optimists to dream we could land both of them?
Our chances appear to have gotten better as, just this week, Forbes magazine named North Carolina as the best state in the country for business.
A visit to the Spartanburg-Greenville area, Alabama, or any of the localities selected for major new facilities confirms the axiom that a rising tide lifts all boats. The economic impact from either or both of these prospects in North Carolina would create a tremendous ripple throughout our state. Thousands of new jobs would be created as a result of either of these prospects picking us for a new location. In addition to those hired in the plants, there would certainly be a resultant spillover effect created as suppliers, transporters and other support businesses start up or relocate to be near them.
But before we get carried away in our enthusiasm, we must look at some practical considerations. What would taxpayers have to provide in the form of economic incentives necessary to close the deals? In September, Wisconsin gave Foxconn approximately $3 billion in state and local tax breaks to lure the 3,000 jobs and $10 billion in construction investment the flat-screen manufacturer is projected to provide. Economists predict it will be 25 years before Wisconsin taxpayers see a return on their investment.
Is North Carolina prepared to offer similar competitive economic incentive packages and if so, what impacts will these tax breaks have on revenues to the state and local governments? Do we have enough capacity to land both Amazon and Toyota-Mazda?
Not only would there be the reduction in tax revenues, but we would also have increased demands on public infrastructure like roads, water and sewer utilities and public schools.
Do we have a workforce prepared to fill these new jobs? Ingersoll Rand recently revealed they had 1,000 job openings in their Davidson County facility they can’t fill because of a lack of needed skillsets from applicants. Some of these unfilled jobs pay as much as $100,000. This is a growing concern among employers. If our state is going to compete for these or other new big industries, we need to ramp up our labor pool for today’s jobs.
But instead of focusing on problems, let’s look at the opportunities, and they could be tremendous. The overall impact of either Amazon or Toyota-Mazda would ignite our state economy in ways we have not seen in years, lowering our unemployment rate, raising family incomes and trickling down to increased sales for retailers, car dealers, realtors, construction companies and our hospitality industry. More new jobs would surely follow.
The greatest benefit would be the confidence gained from knowing we were winners, an attitude that has been lacking since the late 1990s. Let’s tell Santa we want both of these great prospects, but even if only one of them chose our state it would be welcomed news.
Tom Campbell is former assistant North Carolina State Treasurer and is creator/host of NC SPIN, a weekly statewide television discussion of NC issues. Contact him at www.ncspin.com.