In 2013, Good Jobs First — a Washington, D.C.-based nonprofit, watchdog of business incentives — published “The Job-Creation Shell Game.” This study looks at states’ willingness to pay “companies to jump state lines,” with offers of targeted incentives such as “property, sales and income tax breaks, land and infrastructure subsidies, low-interest loans, ‘“deal-closing’ grants, and other subsidies to footloose companies.”
The study demonstrated that corporate “border hopping” in search of incentives is an ineffective tool for creating jobs. At best, such efforts are just pilfered jobs from a nearby state at great expense to the “winning” state.
Good Jobs First used NETS data and calculated that Texas — as just one example — enjoyed a net gain of 28,375 jobs from 2003 through 2009 as a result of firms relocating within its borders. That may sound like a lot. But it is a tiny percentage of the total number of jobs in Texas over the period, amounting to only 0.3% of total job creation per year, on average. This analysis demonstrates the puny number of jobs added to a state’s employment rolls through business relocation. It also places a low ceiling on the potential impact of incentive programs designed for this purpose.