We spend huge amounts of money here in CenLa every year in attempts to spawn economic development. We have certainly have had some luck with a few new businesses opening and hopefully more coming to town than leaving. Unfortunately, however, we’ve seen the ugly face of traditional economic development efforts.
Local efforts to attract business investment have come in the form of the subsidization of construction and start-up costs and exclusion from taxation for a decade or two. It has worked (somewhat) to attract companies to the area. The most touted local example of this is the opening of Union Tank Car’s facility at England Air Park. UTLX is a great example of that ugly face. They received millions and millions of state and local funding to assist in building their facility.
The logic behind justifying these tax breaks is that the greater good of jobs created by the new business outweighs the added burden to the local worker’s tax that he will have to pay to cover services provided to that business. There are, of course, problems with this line of thinking. For one thing, these agreements rarely carry any requirements that the jobs created actually be good-paying jobs. In the case of UTLX, there was an added caveat that required UTLX to employ a certain number of workers. Unfortunately, the missing part of that puzzle is the refusal of our local and state leaders to actually enforce the agreement. Union Tank Car has failed to ever employ the numbers the agreed to. They also then, in two separate occasions, have fired large numbers of workers in an effort to save money. This should have NEVER been allowed to happen.
UTLX entered into a contractual agreement with the citizens of Central Louisiana via our various local and state governments. They have broken that contract. Yet, they have not been forced to return the money they received. Basically they got to keep their hundreds of millions of dollars and you the taxpayer are stuck with the bill. Too bad for you…
There is a reason I am focusing on this particular company. It speaks to accountability. We demand accountability of our local officials, we even are beginning to demand accountability of our corporate leaders. But, we allow our system of Economic Development to roll forward year after year with zero accountability. This makes Louisiana a great place to do business. You can promise the people here the moon, soak them for millions of dollars, then when you choose not to fulfill your end of the bargain you get off scott-free.
This is one leg of the dead horse I’m beating today.
Another is our local government’s refusal to enact fair wage legislation. The terms minimum wage, local wage, living wage, and livable wage have been thrown around for years. Nationally the living wage movement got quite a bit of attention about 10 years ago when local governments first began requiring employers to pay above the federal minimum wage. Naysayers predicted economic doom and swore it would lead to unemployment and price gouging of consumers. Of course none of that happened.
In fact, local minimum wages, living wages, and wage equity laws have been shown to have a net positive impact, especially in lower wage areas. Guess what, our entire region is a lower wage area.
I have worked for several companies over the years that operate in Alexandria and nationwide. Every one of those companies paid workers in CenLa less than they paid them in Baton Rouge, or New Orleans, or Iowa, or just about anywhere else because they could get away with it. I once worked as a manager of an Alexandria chain retailer. This store paid most of their workers minimum wage of within $1.50 of minimum wage in Alexandria. There was a corporate guideline that provided the manager with a range within which he could pay people. That same retailer paid workers in Baton Rouge between $2-4.00 more. They paid workers in New Orleans more than that, and workers other parts of the country generally made $10-15 per hour. Funny thing though, the prices on their merchandise were exactly the same in Alexandria as they were in Baton Rouge, New Orleans, or New York City. I know for a fact, this is the norm for most national chains operating in our community.
Another side of economic development that doesn’t get mentioned much is our local wage demographic. Generally businesses won’t publicly tell us why they choose not to locate in our communities. In the case of CenLa it’s because the majority of them think we are a bunch of uneducated, impoverished, bumpkins. It’s why we don’t have a Borders or Barnes & Noble. It’s why we don’t have a Best Buy. The biggest key in that puzzle, or at least the one in which they have a point is money. Our average incomes in Central Louisiana are among the lowest in the nation. This makes our region a bad investment for any but the lowest rung of retailers and restaurants.
For Alexandria to grow and offer the services to its residents that you find in every other metro area in the state, our wages must drastically increase.
So this brings me to my whole point. We need local wage regulations. Ideally they would be done at the regional level with the Rapides, Grant, Natchitoches, Vernon & Avoyelles police juries enacting identical wage legislation. At the least the city councils of Alexandria, Pineville, Woodworth, Boyce, and Ball owe it to their workers to provide them with protection from predatory employers.
We need at the minimum:
- A local minim wage: 50% above Federal Minimum wage would be an acceptable start and would still have us considerably below the national average of wages. The Republican theory against minimum wage is that no one really works for minimum wage anyway, so there shouldn’t be any opposition to this, right?
- A Living Wage requirement for government workers, employees of government contractors, and employees of any company receiving public economic development funding (including tax breaks). The living wage should be set as a minimum of what it takes for a single person to live in CenLa. That means rent in an apartment, a car payment, insurance, food, utilities, etc. About 5 years ago the number was $14.50 per hour.
- A Wage Equity law that requires businesses to pay local workers at a level at least the company-wide average for that particular combination of job and years experience. In other words, a Retail Clerk in Alexandria with 2 years experience should make no less than the average of all retail clerks in that company with two years experience nation-wide. This would require employers to pay their Alexandria workers the same as they pay their workers in the rest of the country.
The effects of such regulation are that the economy can grow because workers have more money. More money means more being spent locally which means these businesses make more in the process as well. More sales mean more tax dollars. Higer pay means fewer people in poverty. Fewer people in poverty means less crime…
Our State government will not do this for us. Especially not with Jindal in office. Our local leaders must take the reigns on this and move our community forward. This is a test — are these local leaders really out to protect and support the voters and workers or are they just out for a free ride.