Key Reforms: Preventing Job Piracy

State and Local Anti-Poaching Agreements

Although the use of subsidies to lure existing business facilities from one jursidiction to another is widely criticized, state and local officials have done little to stop the practice. In a handful of  places, however, governments have entered into formal or informal agreements to stop trying to “steal” one another’s companies. For an overview of such agreements, see the September 2006 backgrounder written by Wendy Patton of Policy Matters Ohio.

Federal Anti-Piracy Provisions

Prohibitions against piracy have also been written into various subsidy programs authorized at the federal level, including Empowerment Zones/Enterprise Communities and Urban Development Action Grants.

Good Jobs First conducted a survey of these provisions and summarized the findings in a memo; we found at least eight federal subsidy programs that have had anti-piracy rules.

Good Jobs First Publications on the Issue

Ending Job Piracy, Building Regional Prosperity

Local job piracy – the use of subsidies to attract businesses from nearby communities in the same metro area – generates heavy costs for regions in terms of both lost tax revenues and externalities associated with sprawl while failing to create new jobs. But anti-piracy agreements used by the Denver, Colorado and Dayton, Ohio regions have cultivated an economic development ethos that is focused on shared regional prosperity.



The Job-Creation Shell Game: Ending the Wasteful Practice of Subsidizing Companies that Move Jobs from One State to Another

This study describes how state and local governments waste billions of dollars each year on economic development subsidies given to companies for moving existing jobs from one state to another rather. It also looks at how the existence of relocation subsidies emboldens some large companies to demand large job blackmail subsidies to stay put. The report offers policy recommendations to address the problem.



Ending the Economic War among the States: A Strategic Proposal

Many Americans are rightly aghast at the “economic war among the states” as exposed by Amazon’s HQ2 auction. Now, they are also emboldened to challenge this corrosive war by the enormous community organizing victory in New York City that caused Amazon to cancel one new headquarters in Queens. Good Jobs First proposes five ways to rein in the problem of governments over-spending for economic development deals—so they can better focus on strategies that work.