The Nation.



Money for Nothing

By Bobbi Murray

This article appeared in the September 1, 2003 edition of The Nation.

August 14, 2003

Nevertheless, after 9/11, the public paid out some eye-popping sums to retain companies in lower Manhattan. The Bank of New York got some $40 million, while American Express, whose building is adjacent to the World Trade Center site, got $25 million, even after company leaders had already elected to stay.

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The money came from $2.7 billion in community development grants administered by the Lower Manhattan Development Corporation, a city/state collaboration that has already doled out some $1 billion to businesses affected by the attacks, including corporate giants. The Labor Community Advocacy Network to Rebuild New York (LCAN), a coalition of more than fifty unions, community organizations and environmental-justice groups, estimates that the terror attacks cost New York 80,000 to 100,000 jobs. LCAN representatives have been lobbying hard for the remaining $1.2 billion to be used to create 25,000 fully subsidized public-service jobs and 35,000 partially subsidized private-sector jobs.

Good Jobs New York (an affiliate of LeRoy's Good Jobs First) and LCAN have only begun to insert themselves into New York's subsidy debate, but their efforts are emblematic of a national movement that's grown up over the past decade to contest corporate welfare, push back-room deals into the light and attach strings to public economic development dollars. Hundreds of activists gathered in July 2000 in Baltimore to share strategies at a first-ever conference of its kind; in November, Good Jobs First and other leading accountability activists will join labor allies in Milwaukee to press these issues at the annual gathering of the AFL-CIO's Working for America Institute.

Activists call it a movement for "accountable economic development," a phrase that doesn't begin to describe the dynamic range of political work going on, from a campaign in California to limit sprawl while bringing jobs and services to urban centers to a union lockout fight in Ohio, not to mention the widespread push to attach wage conditions to subsidy-based hires.

It's a sign of the times that few, if any, campaigns in the movement call for a subsidies cutoff. The role of government, under unflagging attack by the right for more than twenty years, has been increasingly supplanted by privatization, says Madeline Janis-Aparicio, co-founder and executive director of the Los Angeles Alliance for a New Economy. Opposition to subsidies is simply not winnable in most places, she argues, but public monies used for development give grassroots groups a chance to wedge into the debate and shape it from the beginning, to assess what a community really wants and fight for it.

Some development should be flatly opposed, she says. "There are times when a project is so bad, it should just be stopped in its tracks. Like Wal-Mart. It's a death star, killing all the local businesses." But in general she believes--as does the accountability movement as a whole--in a strategy of engagement. "Public investment is sometimes really needed in blighted communities," she says. "We need the right kind." To oppose all subsidies, she says, would be to "give up our place at the table."

For many organizations, the ground-floor fight is for information. Their battles center on local disclosure measures that require companies to reveal the figures on incentives received and jobs created. Public subsidies spew from so many spigots, it's often hard to identify all the sources and quantify the amount of public benefits any given company gets. The information provides the road map for subsequent accountability fights. Nine states now have some form of disclosure legislation that covers one or more subsidy programs.

The Minnesota Alliance for Progressive Action (MAPA), a coalition of twenty-eight organizations, pushed through the first and toughest disclosure law in 1995, which was subsequently strengthened even further. Minnesota's laws require public hearings that expose the details of subsidy agreements and provide an opening for demanding living-wage rules or other provisions. Beneficiary companies must make public their job-creation goals and wage structures, while the government body offering the subsidy has to report the amount and types of incentives it hands over. "We've got them on record if they're getting a bunch of money and giving nothing," says MAPA executive director Scott Cooper. MAPA is now working with organizations in North Dakota, Wisconsin and Iowa on crafting parallel disclosure legislation.

About Bobbi Murray

Bobbi Murray lives in Los Angeles and writes frequently on economic justice issues. more...

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