Tech Companies Worsening Social Divide By Milking Municipalities For Insane Subsidies

Because these companies are so large, politicians hope that if the initial project works out, even more jobs may be created either by the large tech company or by smaller companies that follow it to the new locale. Attracting big companies helps politicians show voters they've been effective and should be reelected -- they created jobs! -- but they can also serve the ideological position of the politician. Republicans can view handing corporations huge sums of public money as forwarding their goal to slash government to the bone.

Good Jobs First, a national policy resource center, estimates that major tech companies have received $9.3 billion in subsidies and incentives to build data centers and warehouses across the United States over the past five years. These companies are already massively profitable and some of the incentives amount to hundreds of thousands to millions of dollars per job created -- an amount that obviously will not pay off in the long run, especially when another state can just hand them a check to move when the benefit wears off.

Though Apple has an estimated $285 billion in cash reserves, it still looks for subsidies when opening new facilities. The company was awarded $213 million to open a data center in Waukee, Iowa in 2017, even though it would only create 50 jobs at a price tag of $4.3 million per job created, making it almost impossible to see how those incentives would ever be recovered.

Similarly, when officials in Nevada awarded Tesla a tax incentive of $1.25 billion to win its Gigafactory, watchdogs warned that it would starve the state of funding for public services. Now, years later, with the incentive expected to be closer to $1.4 billion, that's exactly what happened. Since the factory isn't contributing to the budget, there isn't money to increase funding to police and fire services, which are feeling the strain of population growth. Schools are also overcrowded and bus routes for students are being cut, while those suffering from increased prices talk of being "Tesla'd."