Posts Tagged ‘corporate welfare’

Not-So-Free Enterprise and VW Jobs

Not-So-Free Enterprise and VW Jobs

Beacon CEO Justin Owen had a Letter to the Editor published in the Wall Street Journal yesterday. The letter discussed the UAW, VW Chattanooga, and corporate welfare.

Regarding your editorial “The Chattanooga Jobs Payoff” (July 15): Yes, we are honored that the company chose our income-tax-free, low-regulation and business-friendly state for its new SUV. And it’s a welcome announcement for the 2,000 people who will now become Volkswagen employees. But it didn’t come without a cost, and taxpayers may pay an even bigger price if the United Auto Workers has its way.

While you note that Volkswagen “will invest $900 million” in the Chattanooga expansion, you fail to note that at least $230 million of that will come from state and local taxpayers in the form of handouts. Tax credits and job training grants could eventually balloon to as much as one-third of the entire investment, at a cost to taxpayers of at least $115,000 per job.

While it is also great that VW Chattanooga employees sent the UAW packing in February, the union only took a temporary detour. The UAW’s establishment of a dues-free, voluntary union just four days ahead of the expansion announcement was certainly Kabuki theatre. But it raises the question: Will VW workers, who soundly rejected the union in February, be able to withstand the union’s rejuvenated pressure to garner majority support? That may be tough now that the UAW has months to wear down and intimidate employees in their own workplace based on what it calls a “consensus agreement” with VW management.

We must hope that the company will refuse to capitulate to the UAW, or else the union’s dream of organizing the South may well come true, financed by none other than Tennessee taxpayers.

Justin Owen


Beacon Center of Tennessee

Nashville, Tenn.

July 22nd, 2014 | Commentary, Feature

Beacon Statement on Government Handout to VW

We are extremely disappointed in Governor Haslam’s decision to give VW nearly $180 million in taxpayer handouts today, especially considering the uncertainty surrounding the company’s relationship with the UAW. Beacon CEO Justin Owen stated “At a cost of $90,000 per job, this is a bad deal for the taxpayers of Tennessee. While Beacon is happy to see VW staying in Tennessee and creating jobs, it comes at a cost that is unfair to the average Tennessee taxpayer, especially considering the recent decision to ignore the will of its workers and let the union into the plant.” In less than four days, the Beacon Center has already received almost 300 signatures from Tennessee residents opposing this act of corporate welfare for a company that permits the union to discard the votes of its workers.

July 14th, 2014 | Beacon Blog, Recent News

Government Subsidized Baseball Players?

Government Subsidized Baseball Players?

If you watched baseball this past week, you witnessed some of the wealthiest people in the world getting paid to play a game. Some critics might say that it is a waste of money to pay these men such exorbitant salaries. Yet, fans might counter with the argument that this is the free market at work.

Unfortunately, the game is not entirely a free market utopia. The market for baseball—and professional sports in general—has been distorted by stadium subsidies. Cobb County, a suburb of Atlanta, is considering giving the Braves a massive handout of $368 million for their new ballpark set to open in 2017. This year, the Braves will spend over $107 million just on player salaries. It’s certainly not out of need that this handout is coming their way.

If Cobb County chooses not to give the Braves a subsidy, one of three things will happen: the Braves would build a stadium that cost substantially less than $672 million; they would sign a new lease for their current (and not even 20-year-old) home, Turner Field; or the least likely, the Braves would build a $672 million stadium and cut player salaries. If the Braves did the latter they would have a harder time competing with other teams that get government subsidies.

Governments sell these subsidies to voters by claiming that the “investment” will create millions in tax revenue and economic activity. Claims of economic impact are dubious at best. Why should the government be using tax dollars to back private enterprises anyway? Local governments don’t realize that in the process of subsidizing professional sports venues, they are indirectly subsidizing player salaries on the backs of taxpayers, regardless of whether those taxpayers even watch the sport. When wealthy sports owners get stadium subsidies, they save tons of money, which in turn allows them to pay their players more than their true value. In effect, the government is taking money from someone making $12 an hour and giving it someone who makes millions of dollars a year. This is just another example of government meddling in the private markets, creating benefits for the well connected at the expense of the middle class.

- J.R. Walker III

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June 4th, 2014 | Beacon Blog, Feature, Recent News

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