GEOStrategy

Economic Development Programs

How does a location get greater advantage from their economic development “spend?” And how does a corporation, understanding that reality, make investment a win-win for both the company and the community?

Many government entities today are recognizing that the quality of the jobs created is as important as the number of jobs created. In part, higher wage jobs answer other quality of life and community development needs. But there is also a recognition that knowledge workers are less easily displaced when companies seek lower-wage manufacturing or back office workers in an effort to cut costs. Good Jobs First, a DC-based center for corporate and government accountability, states that 43 states and 41 cities attach job quality standards to at least one development subsidy. Georgia’s headquarters credit, as an example, specifies that headquarters tax credits are available only if the company creates 50 headquarters jobs, invests at least $1 million and the average wage of the jobs recruited equals the county average. The credit doubles for jobs that earn 200% of the county average. Minneapolis, by contrast, imposes wage standards derived from either regional industry or occupational averages and a living wage law pegged to the poverty rate. Market-based wage requirements are generally higher than those pegged to the poverty rate, and succeed in attracting higher-wage investments.

How does a corporation benefit from the location’s desire to get a bigger economic development “bang for the buck?” It’s critical to understand the subtleties of the local incentive, wage, and tax structure when evaluating investments in a geography. Geo Strategy Partners is adept at maneuvering through the red tape of site selection to support good corporate decision-making.