Wednesday, April 30, 2008

Let's Just Let Business Work for Free

Here we go again. Business threatens to leave town. Town gets on its knees and gives up the bank to keep business in town. Business doesn't even have to leave. Never mind the fact that there are other businesses out there to purchase the newly open space (read: new job growth), this particular business (JP Morgan) wasn't even threatening to leave Massachusetts!
The firm looked at moving to other states but ultimately decided to stay in Massachusetts largely for the quality of the workforce, executives said.
Of course, the Globe buried the money quote halfway through its article, but that doesn't change the fact that it's there. They wrote it. The JP Morgan people said it. It's the elephant in the room, but states and cities are all too willing to ignore it.

The ugly truth: Businesses are attracted to qualified workforces, not tax cuts. Of course, they're more than happy to take the tax cuts - to the extent they'll even threaten to leave - but corporations that require skilled workforces are going to go where the skill is at. That's just a fact. So, in a year when the city of Boston had to open up its piggy banks to the tune of $10 million to keep the schools afloat, the city is now going to hand over JP Morgan $2 million - just for the privilege of staying in the city. All that, and JP Morgan wasn't even threatening to leave the state - one of their high level people admitted as much in the Globe.

If JP Morgan is going to relocate its offices in the Commonwealth of Massachusetts, how many people think they'd actually leave the city of Boston? If they want a talented workforce, they're going to go where the most talent is - which is in Boston, because of its Universities and public transportation. Unfortunately, Mayor Mumbles Menino was duped again.

How many more times will cities and states fall for this? And when will politicians learn that job growth comes from new, small companies - not these mega corporations owned from afar. Shareholders of JP Morgan don't care about the city of Boston; Let's invest in the business owners who do. Those are the ones that'll stick around - because they live here and send their kids to school here.

It's difficult to worry about larger corporations, because they're going to do what they're going to do. Giving up the bank isn't a good strategy to deal with them, because half the time their threats are about as meaningful as pigs with wings. Kind of scary, but nonexistent. Meanwhile, if Boston would like to do something to help keep its major corporations here, why not institute policies that encourage what companies like JP Morgan truly want - policies that will keep a young, talented and highly educated workforce in the city. A better use of that $2 million would be on affordable housing, or making the T usable again. Let me know when the Mayor's office gets the Memo.

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