That FoxConn Deal Trump was bloviating about - 3 Billion Bucks


 

That FoxConn Deal Trump was bloviating about - 3 Billion Bucks
 


18 August 2017 at 2:15:06 PM
salon

Ars Technica

Opponents said the deal wasn't a good use of taxpayer funds. The $3 billion incentives package includes about $2.85 billion in cash payments from taxpayers and tax breaks valued at about $150 million. The state is also waiving certain environmental rules.

....

Democratic opponents of the deal have pointed out that paying $3 billion to get 3,000 jobs means the state subsidy amounts to around $1 million per job.

 

That's $66,600 per employee for each of the next 15 years, according to an analysis by Prof. Michael Hicks, an economics professor at Ball State University who opposes the deal. Foxconn will pay the workers an average of just over $53,000 per year. (Those numbers are based on the initial count of 3,000 workers.)

"Voters might wish to ask just why each Wisconsin household is stuck with a nearly $1,200 bill to subsidize a company that is half as productive as Wal-Mart, and one-tenth as productive as Harley-Davidson," writes Hicks in an op-ed for MarketWatch. "It is an over-the-top bad deal for Wisconsin."

However, the full $3 billion in incentives only becomes available if Foxconn ends up creating 13,000 jobs. But there's no ironclad guarantee in the deal that Foxconn even meets its 3,000 job promise, so the opponents' "$1 million per job" argument could be true if the factory only ends up employing 1,500 people or fewer.

Even if the plant never expands beyond 3,000 jobs, though, Foxconn will get $1.35 billion for building the plant. Assuming even the beginning stages of the deal come together, Wisconsin will be paying $500,000 worth of incentives per job.

Either way you slice it, the Wisconsin proposal will be the largest-ever subsidy provided by a state to a foreign company, according to Politifact.

 

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