(snip)"The plant, just off Interstate 85 in Troup County, will hire 2,893 workers at an average annual salary of $50,000 plus benefits. When at full production, by 2009, the plant will produce 300,000 vehicles a year.
Georgia Gov. Sonny Perdue said the nearly 2,900 jobs will ease the impact of the loss of thousands of textile jobs in the region over the past decade.
"This area was once the center of the textile manufacturing universe. Shortly after the Civil War, West Point Manufacturing Company saw an opportunity to reconstruct the South into an industrial powerhouse," he said. "We had the land, we had the resources, and we had the work force. Georgia was ready for an economic rebirth. Now, here today, we are witnessing that rebirth again."
Georgia's incentive package includes $75.9 million in job tax credits over five years, $20.2 million for a job training center on the site and $60.5 million to purchase and prepare the site. West Point and Troup County are offering up $130 million in property tax abatements E.S. Chung, the president of Kia and son of the elder Chung, told reporters that fewer than 20 Korean managers would be assigned to the West Point plant."(snip) ...
Well, let's do some math here. First, let's neglect the loss to the US federal gov't of tariff revenue on Kias formerly imported from Korea that will now be 51% US content (even though this has to run into the tens of millions if not hundreds of millions in lost federal revenues).
Next, figure an 'economic injection' over a 5 year period of 2,893 new employees earning $50k ... or $723 million. But this came at a cost to state and local taxpayers of $76m + $20m + $61m + $130m or $287m. Stated another way, the paychecks of these 2,893 new Kia employees are being subsidized at a rate of 287/723 or 40% or $20,000 per employee per year by Georgia state and local taxpayers.
Now granted that somebody in the Georgia state capital probably calculated that spending $20,000 per year to 'subsidize' a decent paying job for a Georgia resident is probably cheaper than providing social welfare benefits to that same Georgia resident and his family if unemployed. However, the fact remains that some portion of this taxpayer financed subsidy money finds it's way into the corporate coffers of Kia thus to a bank account in Seoul. The fact also remains that these tax funded subsidies will allow Kia to price their cars at a lower level while still turning a profit, thus making competitive offerings of (unsubsidized) US made cars from GM, Ford and Chrysler even less probable than they already were - thus contributing to the loss of even more auto jobs in MI, NJ and other 'blue' states. If this is a battle for jobs between the 'red' states and the 'blue' states, hint hint the 'red' states appear to be winning !
But in the final analysis, with the additional tax burden to federal (avoided tariffs) and Georgia taxpayers (subsidies) accounted for, I suspect that the only true winner in the whole deal is Kia !
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