NPQ: Corporate Economic Blackmail and What to Do about It
Editors’ note: This piece by Good Jobs First’s Arlene Martínez and Greg LeRoy is from Nonprofit Quarterly Magazine’s summer 2024 issue, “Escaping Corporate Capture.”
For the summer 2024 issue of Nonprofit Quarterly, “Escaping Corporate Culture,” Good Jobs First’s Arlene Martínez and Greg LeRoy wrote about how economic development subsidies are usually little more than corporate windfalls, and how communities are rising up to challenge these giveaways:
“Promisingly, there have been great strides when it comes to more equitable development. Transparency is foundational and especially critical to counteract the corporate secrecy that hides the tax-break dogma. Only with clear disclosure of subsidy awards and deal outcomes can anyone judge whether a company delivers.
By 2010, Good Jobs First found that 37 states had some type of company-specific, deal-specific disclosure. We launched a Subsidy Tracker to aggregate what had been a data Tower of Babel. By our 2022 report, 48 states (plus the District of Columbia) were disclosing—all but Georgia and Alabama posted at least some information online. That list is now up to 49, after Alabama passed the Transparency in Incentives Act in 2023 to disclose the names of companies that had received economic development subsidies…
Of course, disclosure does not make a subsidy justified, fair, or effective. That takes organizing. Alongside gains in transparency is the major new coalition model, community benefits agreements. Pioneered by the Los Angeles Alliance for a New Economy in the early 2000s, CBAs are a historic evolution of community and labor organizing.
These agreements are comprehensive rather than one-offs. Tailored to the impact of each project and the needs of the affected community, they may include local hiring preferences for both construction and permanent jobs, living wages, affordable housing, environmental and open-space provisions, and space set-asides for local merchants or social services such as day care or a health clinic.37
Popularized by the network now named PowerSwitch Action, the framework is increasingly common, and not just for use in single development projects—even some midsize cities such as St. Louis and Cleveland have enacted community benefits ordinances/agreements that apply to many new projects.
The community benefits frame is also woven deeply into recent federal legislation, such as the CHIPS and Science Act, Inflation Reduction Act, and the Infrastructure Investment and Jobs Act.“
Read the full story at NPQ.