Sunday’s New York Times has a twist on the “privatize gains, socialize losses” meme we lefties often harp on about: privatize gains, socialize costs.
States like North Carolina, in the hopes of luring jobs from corporate giants like Caterpillar, are paying to train workers in the often-times narrow skills specific to Caterpillar’s needs.
Yet North Carolina is picking up much of the cost. It is paying about $1 million to help nearly 400 workers acquire these skills, and a community college has committed to develop a custom curriculum that Caterpillar has valued at about $4.3 million.
Caterpillar is one of dozens of companies, many with growing profits and large cash reserves, that have come to expect such largess from states in return for creating jobs. The labor market is finally starting to show some signs of improvement, with the government reporting on Friday that employers created 200,000 jobs in December.
Although the sums spent on training are usually small compared with the tax breaks and other credits doled out by states, some critics question the tactic.
“The question is, why shouldn’t the company pay for this training?” asked Ross Eisenbrey, the vice president of the liberal Economic Policy Institute. “It’s for their benefit.”
Yes, that is a good question. Why doesn’t Caterpillar pay to train its own workers? Time was, employee training was part of the deal. Not any more. Desperate times call for desperate measures, apparently; when unemployment is high, employers can set their own terms. That means generous incentives — the Times story says Caterpillar got a $51 million package from North Carolina — all in the hopes of luring an employer. Kinda makes you wonder who’s really paying for all of this “job creating,” hmmm?
And honestly, I almost wouldn’t mind this so much, were it not for corporations like Caterpillar pissing and moaning about their gawd-awful tax burden all the time — yes, even as they get handed a trained workforce on a silver platter and tax credits and everything else, they’re still pulling shit like this:
Caterpillar Inc. used offshore subsidiaries in Switzerland and Bermuda to avoid about $2 billion in U.S. taxes from 2000 to 2009, boosting its earnings through a “tax and financial statement fraud,” according to a Caterpillar executive’s lawsuit.
The company, the world’s largest construction-equipment maker, sold and shipped spare parts globally from an Illinois warehouse while improperly attributing at least $5.6 billion of profits from those sales to a unit in Geneva, according to the suit filed by Daniel J. Schlicksup. He was a global tax strategy manager for Caterpillar from 2005 to 2008.
CHICAGO (Dow Jones)–Caterpillar Inc. (CAT) remains highly critical of Illinois’s business climate, despite state lawmakers’ approval of a series of business tax breaks this week that includes tax credits for research and development investments sought by Caterpillar.
A spokesman for the construction machinery manufacturer called the extension of the R&D credits a “small step in the right direction,” after the state allowed the credit program to expire at the end of the 2010. But Caterpillar characterized the package of business tax breaks as largely a knee-jerk reaction to threats by companies to leave the state. Caterpillar said the legislation does little to improve a state fiscal condition that the Peoria, Ill., company considers unappealing for business investment.
“From a financial standpoint, Illinois is a patient in critical condition,” said spokesman Jim Dugan. State government “continues to react in crisis mode, using band-aids rather than developing a long-term plan to get the state on the road to being healthy.”
The business tax breaks are expected to cost the state $214 million a year by 2014, according to state estimates. Illinois is facing budget deficits and massive pension costs for state employees in the coming years that threaten to force legislators to consider additional increases in state income taxes.
And Caterpillar “starving the beast” of $214 million helps how, exactly?
Corporations like Caterpillar are the worst offenders because they’re exploiting a jobs crisis they created by outsourcing jobs overseas, while at the same time dodging their tax obligation through fraud, tax shelters and strong-arm “negotiation” tactics. They’re getting all of the benefits of operating in the United States without paying their fair share, threatening to “go Galt” and all that crap because they know they’ve got us between a rock and a hard place. You know what? Fuck you, then. Go. You don’t like this country? Leave. Go move your HQ to someplace else, if you don’t think we’re a nation worth investing in. Go wave someone else’s flag, then.
I mean, seriously. Look what they’re doing to their workers up in Canada, demanding a 50% pay cut, no cost of living adjustment, changes to the healthcare co-pay. The union said no and Caterpillar locked them out. That’s some serious hardball. So wise up: are we this desperate for jobs that we’ll cut a deal with the devil? Apparently, yes.
Such is the American dilemma in these days of high unemployment. But corporations need to remember that times change. They won’t always be on top. We’ll muddle through this crisis and, God help us, when we emerge on the other side, let’s not forget how Our Corporate Overlords treated this country and its workforce in its time of need. Let’s not forget how they starved the public of the tax money it needs to make this country a place worth living and working in. Let’s not forget that while cheating on their taxes, they acted like Mafia bosses, demanding ever more from We The People or else. We pay for the training and the tax abatemenss, or the workforce gets it.
And pray let us not forget how at the same time, they spent millions on lobbying, hoping to stack the deck ever more in their favor. Oh yeah, and let’s not forget the sorry “poor me” song they sang, while they netted $2.7 billion in profits off of $42.6 billion in revenue.
We took these deals because we were hungry. But we won’t be hungry forever. Things change. The world changes. Some day they’ll be on the losing side of some trend, or some awful shift in technology. They are going to demand Uncle Sam bail their sorry asses out for some stupid mistakes that were made, and God help us, let us not forget this moment in time.
Let us hope the Memory Hole is there to remind us.