$750,000 government subsidy for twenty new jobs.

Last week I attended a Chamber of Commerce ceremony - it was one of the weirdest events I've attended in a long time.

The occasion was to honor and thank Netherlands-based Colbond Incorporated, which announced they are expanding their nonwoven fabrics facility here in Buncombe County, thus adding about twenty jobs to the local economy.

This in-and-of itself isn't odd. After all, why shouldn't the Chamber celebrate? When a business expands that's usually a good thing for the community.

But get this: In order to entice Colbond to expand here over another city - the corporation is getting $550,000 in tax credits from the state of North Carolina, $100,000 from Buncombe County and another $111,000 from the city of Asheville.

You read that right - the government is going to shell out over $760,000 for twenty jobs.

Most of these careers will pay about $15 dollars an hour, and a few of the sales positions may pay upwards of $75,000 a year. But the bottom line is Colbond's labor costs will be covered by the tax payers for a few years while they expand.

The company keeps 100% the profits made from the government-subsidized labor. Also, after they've meet their benchmarks and received the rebates and grants, they are under no obligation to keep those jobs here.

I'm not naive. I know these kind of deals go on all the time, and I understand why some think they are necessary. But that's not why I thought the event was odd, and not why I'm blogging about it.

During the Chamber ceremony, Colbond President Bart Austin was given gifts! He got a gold plate from the state, a painting from the county, and a piece of hand-made pottery from the city.

Community leaders handed these presents to Mr. Austin with smiles, flowery speeches and handshakes all around. Mayor Bellamy, a Democrat, and Councilman Mumpower, a Republican, - two individuals on polar opposites of the political spectrum - were both there and had nothing but good things to say about the deal. (ON EDIT: And for the record, this post is not meant to lampoon them. I like both of these people. IMHO, Mayor Bellamy is one of the best this city has had in decades.)

Everyone was acting as if we had won something.

The truth, which I felt everyone in the room knew but didn't want to acknowledge, was a sad reality that the economic situation in this area is so dire that Colbond was essentially able to blackmail the community into forking over money to do something they were going to have to do anyways.

I can't blame anyone involved. It would have been silly for Colbond not to take advantage of tax credits - they aren't a charity. Also, it's the voters who are demanding that something, anything, be done to stop the flight of jobs from this area.

But still - paying corporations for the privilege of working for them? Is this what the once-mighty economic machine of America has been reduced to?

Read counterpoint here. (Note: I don't like this counterpoint, but I couldn't find anything better. Does anyone know of an article that supports government subsidies for corporations? Everything I've researched so far is against these kind of deals. Let me know in the comments.)

Tags: Subsidized business - Colbond - Economics

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