by Jon Sanders
Research Editor and Senior Fellow, Regulatory Studies, John Locke Foundation
Citing “increases in Covid-19 cases and increased business restriction,” a recent survey from the National Federation of Independent Business Research found that one-fourth of small business owners expect they will close “if current economic conditions do not improve over the next six months.” North Carolina businesses are among the “hardest hit in the nation,” as discussed here in November.
John Trump reported in Carolina Journal on Jan. 6 of closures just in local bars and restaurants:
More than 100 bars and restaurants in the Triangle have closed since March, because of the lockdowns and the subsequent lack of business.
Zack Medford, a prominent and vocal Raleigh bar owner, on Monday said he has closed Coglin’s on Fayetteville Street, which, he wrote on Facebook, fell “victim to insufficient government aid, negligent leadership from elected officials, and inequitable state policies.”
“Out of money, and out of hope, the bar was forced to lay off over 25 employees and turn the lights off one final time.”
Another kick in the face to small businesses has been the loss of tourism and festivals. Carolina Journal’s Julie Havlak described the struggles of small businesses in cities and towns across the state having to cancel their annual fairs and festivals. From Dillsboro’s Western North Carolina Pottery Festival to Wilmington’s Azalea Festival and everywhere in between, Main Street has been silenced to the detriment of the local shops.
And it’s not as if others can pitch in to help them. Havlak explains:
Help won’t be coming from the private sector. The governor’s shutdowns crippled local chambers’ ability to aid their businesses.
Through November 2020, according to the Federal Reserve, North Carolina had lost a net 222,300 jobs year over year. Nearly half of them (100,000) were in the leisure and hospitality industry. About one out of every five jobs (19.2 percent) in leisure and hospitality had been lost in a year’s time.
What should the governor do? How are jobs created, and by whom?
Even as the state has lost over 222,000 jobs in a year’s time, Gov. Roy Cooper still faces the same choices for seeing job growth in North Carolina. Does he favor the Freedom & Growth option (the “proven way to promote faster economic growth and expansion”)? Or does he resort to Central Planning & Cronyism (the “proven way to slow economic growth and empower politicians”)?
Without question, Cooper’s extreme executive orders are crippling and closing businesses across North Carolina. Should Cooper decide to lift his destructive business restrictions, he could cite, of all people, New York Gov. Andrew Cuomo. On Jan. 11, Cuomo tweeted the following:
So far Cooper continues instead to choose Central Planning & Cronyism. Cooper’s corporate welfare tally for 2020 is jaw-dropping: $519.3 million pledged to just 48 corporations.
Oh, but won’t it create jobs? How do the promised jobs compare with the 222,300 jobs lost? Cooper’s corporate welfare will supposedly lead to 11,600 new jobs —about one-nineteenth the number of jobs destroyed. And that would cost the state $44,764 per job created.
But as discussed in last year’s review of Cooper’s cronyism, those promised new jobs are often little more than numbers for glowing press releases:
Those incentives programs have a poor track record. News analysis found that from 2009 to 2016, JDIG and OneNC awards resulted in just over half the expected jobs. About 37 percent of incentivized companies failed to create even a single job. These poor results were in keeping with established research into corporate incentives, as well as forthcoming new research.
Cooper was, in fact, relatively more efficient at corporate welfare in 2019: $146.0 million to 66 corporations for 11,779 expected jobs. So in 2020 he pledged away three and a half times more money to fewer recipient corporations for nearly the same amount of new jobs (slightly fewer) he can claim he created.
Here’s the final tally of Cooper’s corporate welfare in 2020: