by Dr. Roy Cordato
Senior Economist, Emeritas
Today’s Carolina Journal’s “Daily Journal” features an important article by my colleague Jon Sanders on Amazon’s attempt to fleece North Carolina’s taxpayers in soliciting an unprecedented incentive package, i.e. bribe, from the State. If Governor Cooper and NC’s always-anxious-to-extend-the-corporate-gravy train legislature, hands over the booty Amazon wants, the corporate giant promises to create 50,000 new jobs in the state. But here’s the rub, with a 4.1% unemployment rate, NC already is experiencing what any economist would describe as full employment. What this means is that Amazon will, on net, not be increasing the number of North Carolinians employed but bidding away workers from other employers and in the process driving up labor costs. In a free market setting this would not be a problem because those workers who were being lured away by Amazon would be going to more efficient uses. But these new jobs would not be created by free market capitalism buy by crony capitalism, where the state and Amazon would be working hand in glove to thwart the labor needs of other North Carolina businesses. The workers that would be employed by Amazon would not be being bid away from their existing employers to occupy higher valued positions, but instead would be being reallocated toward less efficient, lower valued uses made possible by the state’s largesse. Because of this, if Amazon were to come here based on a coercive wealth transfer from taxpayers in their direction the state’s economy will be made less efficient and worse off not more efficient and better off.