Sunday, May 15, 2005

I'm shocked -- Shocked! -- to see that gambling is going on here!

New York State has a program that provides money grants to businesses that promise to add jobs. Now it turns out that many of those companies cut payrolls instead:

Gov. George Pataki's administration gives millions of dollars every year to businesses that promise to hire more people or retain jobs. It's a promise that is often broken. Almost half of those companies helped by New York taxpayers fell short of the job targets that are part of their deals with the state, records show. In fact, a quarter of the businesses took taxpayers' money and loans, then cut jobs.

Maybe if they spent some of that money not on grants to existing businesses, but maybe on tax breaks for people trying to launch new businesses -- you know, cultivating some entrepreneurship -- things might be going better.

It seems to me that what New York needs to do is worry less about propping up existing, and floundering, businesses and make it easier for new businesses to take root. The alternative doesn't seem to be working so well:

Take the case of Ingram Micro, a global computer-parts wholesaler with a distribution center near Buffalo. In 1999, it accepted $675,000 in taxpayers' money and promised to add 542 workers. Instead, it cut its workforce by nearly 400. The state demanded a penalty of $176,985, but an Ingram spokesman said it has not paid and is negotiating with the state. Last month, Ingram Micro announced it will lay off another 120 Buffalo workers and send the work overseas.

I don't have a problem, in principle, with government money being used to help businesses and to generate jobs and whatnot. But it seems to me that such activity should, you know, actually generate jobs. That doesn't appear to be happening here.

(BTW, I'm no expert on these things, but the Syracuse Post Standard seems to often have pretty good business and economics reporting, with particular focus on Upstate NY. I haven't lived in Syracuse for over two years, but I still check that site at least three times a week.)

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