The Financial Times once again hits the nail squarely on the head in an article entitled “US states become addicted to the use of economic sweeteners.” Unfortunately, the article isn’t freely available on their website yet, but it’s an easy argument to sum up:

What’s the best set of incentives a state could provide to attract a company to locate there?

Just off the top of my head a few things come to mind: a well educated, appropriately skilled workforce for the type of jobs the company needs to fill; a place that is easy to do business with, i.e., not a lot of red tape and bureaucracy to have to deal with; a place with good schools and communities, and taxes that are reasonable rather than onerous and used for the right kinds of things.

But what typically happens? States ‘bid’ (and even cities) against each other offering incentives and economic “sweeteners” to attract companies at a cost that often exceeds the benefits of bringing the company to the state in the first place. Why? Because the people in charge of making the offers know they’ll get the credit for bringing in the jobs and they know–either implictly or explicitly–that they won’t be around when it comes time to explain why those jobs cost more than they were worth.

After detailing a number of ’successful’ efforts by Georgia, Mississippi and other states to woo large companies to economically devastated communities, both the writer of the article and many of the citizens from those communities question whether the efforts were worth it. The article goes on to quote Greg LeRoy, the head of an advocacy group called Good Jobs First, who points out that “Mississippi has been offering these deals for decades yet it is still number 49 out of 50 states in terms of per capital income.” As NorTech points out in its report, “Navigating the New Realities of the North Shore,” it is educational attainment that has the greatest tie to per capita income, not state incentives designed to attract established companies to the region.

Chad Adams, head of the John Locke Foundation, thinks the key is for states to to simply focus on making their entire economies more competitive. “By offering tax breaks you are admitting there is something wrong with your tax system…If you had low taxes for all businesses you would not need additional incentives.”

Or at least that would be true if your workforce were well educated, you were a place that was easy to do business with, and had good communities people wanted to live in.

We already know we have good communities people want to live in; but do we have what it takes to turn our attention away from the “incentives game” and focus on building an educated workforce and removing bureaucratic barriers to business formation and growth here in Northeast Ohio?