By SJ Otto
It was back in the 1980’s that I heard a lecture about reviving small town economies. I was in the town of Windsor, MO. The population was 2,893 as of the 2010 census. It turns out that a lot of what is needed amounts to checking out a company or person or persons before inviting them to come and relocate in the town. It also included making sure that money comes into the town and stays in rather than just passing through it.
Towns often give out tax abatements to entice a company to relocate in a town. Sometimes an abatement is for a percentage, such a 10 or 15%. Other times the abatement is 100%. They are often for a set amount of time, such as Ten years, which is a common time period. So if a company comes in with a complete 10-year tax abatement that means they pay no taxes for ten years. Some cities or towns even give free water and electricity. A company can move to a town and pay nothing for 10 years. In that time they are using the streets, the sewers and other resources. All of that is free for the 10 year period. In that time, the city is losing resources to that company.
There are companies that go to a town, move in and in 10 years later they move out. Then they look for the next town waiting to entice them. It’s like a scam. Small towns get so eager to entice new business that they give away too much and become corporate chumps and they get taken advantage of. Small towns need to be careful who they give these tax abatements to and whether a company is really going to benefit the town or just take away a lot of free stuff.
Another thing towns need to look at is where a company is going to put its money. A company moving in should make use of the local bank or banks. Some companies use their own bank in their headquarters’ town. If they are not putting money in the local bank, they are just letting it go through the town to somewhere else. The trick to any economic development is to bring money into the town, but also to keep it from leaving. If the only thing a company is doing is paying some local workers, but the company doesn’t use the local bank or rely on other business in the town, then most of the money is leaving the town. It is passing through the town and not really helping the local economy.
In Windsor there was a convenience story that had located there. They didn’t even carry the local newspaper. All they did for the town was provide a few jobs. They contributed little to the towns overall economy. Other things a company should do is to make use of all the town’s resources, including tools, from local stores or companies. If there are farms near by the farmers need to grow anything that a company may use. An example of this was a town that had a potato chip factory. At first that factory imported potatoes from a different state. Eventually local farmers turned to growing potatoes in order to sell to the factory. That made more sense.
While many companies hire people from the town, they may use a bank that is in another town. Many companies use banks where their main company is located, possibly in another state. A company should also be using local companies for their day to day business. They may use the local newspaper for advertising. They may be buying supplies and tools there. The author gave an example of a potato chip factory that had been importing potatoes from another state. Local farmers got together and decided they should grow potatoes to be sold to the potato chip factory.
Another thing to look at is how many employees a company plans to bring in to help run things. It may make sense to bring in some experienced managers from the company’s other plants. But they should be developing a pool of local talent. They can either train local people to be managers or send people to schools to be educated for certain jobs in the company, book keeping for example. People who move into a town do rent apartments and houses. It is important that local people be used for labor as much as possible.
A company’s labor relations are important also. If a company has a record of bad employee relations, they don’t need to relocate in the town. Whether they allow unions is important. If they are anti-union or non-union, it makes sense not to invite them in. They will only encourage bad relations with unions that already operate in the town. A lot of conservatives will claim that is not really important, but it is.
US Representative Alexandria Ocasio-Cortez was slammed by conservative organizations and news outlets for pushing away a deal with Amazon. That company decided not to relocate in her district. But chances are she knew a lot about these various aspects of bringing in corporations to build up local economies. Amazon was an anti-union business and that does matter. Ocasio-Cortez was right to pass on having them in her district. A businesses treatment of unions does matter.
So this is why people need to be careful and selective when choosing companies for their town or community. Don’t just listen to conservatives who believe in doing anything to get a corporation to move in.
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Towns often give out tax abatements to entice a company to relocate in a town. Sometimes an abatement is for a percentage, such a 10 or 15%. Other times the abatement is 100%. They are often for a set amount of time, such as Ten years, which is a common time period. So if a company comes in with a complete 10-year tax abatement that means they pay no taxes for ten years. Some cities or towns even give free water and electricity. A company can move to a town and pay nothing for 10 years. In that time they are using the streets, the sewers and other resources. All of that is free for the 10 year period. In that time, the city is losing resources to that company.
There are companies that go to a town, move in and in 10 years later they move out. Then they look for the next town waiting to entice them. It’s like a scam. Small towns get so eager to entice new business that they give away too much and become corporate chumps and they get taken advantage of. Small towns need to be careful who they give these tax abatements to and whether a company is really going to benefit the town or just take away a lot of free stuff.
Another thing towns need to look at is where a company is going to put its money. A company moving in should make use of the local bank or banks. Some companies use their own bank in their headquarters’ town. If they are not putting money in the local bank, they are just letting it go through the town to somewhere else. The trick to any economic development is to bring money into the town, but also to keep it from leaving. If the only thing a company is doing is paying some local workers, but the company doesn’t use the local bank or rely on other business in the town, then most of the money is leaving the town. It is passing through the town and not really helping the local economy.
In Windsor there was a convenience story that had located there. They didn’t even carry the local newspaper. All they did for the town was provide a few jobs. They contributed little to the towns overall economy. Other things a company should do is to make use of all the town’s resources, including tools, from local stores or companies. If there are farms near by the farmers need to grow anything that a company may use. An example of this was a town that had a potato chip factory. At first that factory imported potatoes from a different state. Eventually local farmers turned to growing potatoes in order to sell to the factory. That made more sense.
While many companies hire people from the town, they may use a bank that is in another town. Many companies use banks where their main company is located, possibly in another state. A company should also be using local companies for their day to day business. They may use the local newspaper for advertising. They may be buying supplies and tools there. The author gave an example of a potato chip factory that had been importing potatoes from another state. Local farmers got together and decided they should grow potatoes to be sold to the potato chip factory.
Another thing to look at is how many employees a company plans to bring in to help run things. It may make sense to bring in some experienced managers from the company’s other plants. But they should be developing a pool of local talent. They can either train local people to be managers or send people to schools to be educated for certain jobs in the company, book keeping for example. People who move into a town do rent apartments and houses. It is important that local people be used for labor as much as possible.
A company’s labor relations are important also. If a company has a record of bad employee relations, they don’t need to relocate in the town. Whether they allow unions is important. If they are anti-union or non-union, it makes sense not to invite them in. They will only encourage bad relations with unions that already operate in the town. A lot of conservatives will claim that is not really important, but it is.
US Representative Alexandria Ocasio-Cortez was slammed by conservative organizations and news outlets for pushing away a deal with Amazon. That company decided not to relocate in her district. But chances are she knew a lot about these various aspects of bringing in corporations to build up local economies. Amazon was an anti-union business and that does matter. Ocasio-Cortez was right to pass on having them in her district. A businesses treatment of unions does matter.
So this is why people need to be careful and selective when choosing companies for their town or community. Don’t just listen to conservatives who believe in doing anything to get a corporation to move in.
