For years, research organization Good Jobs First has been at the forefront of examining the impacts of using public money to subsidize wealthy corporations. Now in a new series, “Race and Economic Development,” they explore how economic development subsidies funnel public money to wealthy white men, perpetuating institutionalized racial and wealth inequality.
The newly released report, “How Economic Development Subsidies Transfer Public Wealth to White Men,” finds:
- $95 billion in business subsidies are awarded by states each year, with large companies as the dominant recipients.
- 50 of the most expensive “megadeals” (those given at least $50m in state and local tax dollars) went to multinational corporations primarily headed by the wealthiest white men in the world.
- Business subsidies intended to develop the economy instead transfer wealth collected through taxes from the public to companies owned by the world’s richest men including Amazon’s Jeff Bezos, Tesla’s Elon Musk, Berkshire Hathaway’s Warren Buffet, Apple’s Tim Cook, real estate mogul Stephen Ross, Rocket Mortgage’s Dan Gilbert, and Under Armour’s Kevin Plank.
- None of the companies receiving a “megadeal” were led by an African American. Of the 12 companies with non-white leaders, none were US-born.
- Giving public subsidies to large companies ultimately funnels money to a small group of predominantly wealthy white men and undercuts resources available to invest in programs that improve economic mobility, like workforce training, public education, and small business support.
Good Jobs First recommends disqualifying large companies from receiving subsidies because they don’t need them to open or expand their businesses. If large companies do receive subsidies, they argue, recipients should have stringent requirements for creating new, good quality jobs located in underserved communities or where people who rely on public transportation can access them.
These findings underscore why large subsidies for already profitable big businesses are not a good investment of public funds. Policies in Maine, like the new Dirigo subsidy, do not focus on creating good jobs in underserved communities and instead end up transferring public wealth from working Mainers to wealthy CEOs and shareholders who need it least.
The flawed structure and lack of accountability for economic development subsidies means rather than level the playing field and promote opportunity for small businesses and workers alike, they uphold and potentially make worse existing inequalities that disproportionately impact women and people of color. Instead of spending public dollars to pad the fortunes of corporations and people with extreme wealth, we should demand they pay what they owe in taxes and use those funds to boost long-term investments in Black, brown, Indigenous, immigrant, and communities with low income that make it possible for all people and families to achieve economic security.