Subsidies, incentives and legal immigration

By Michael Randle, Editor

Okay fellow journalists, this is for you: stop calling incentives “subsidies.” The one thing we need to do as an industry is to change the word from “subsidies” to “incentives.” “Subsidies” are what GM and Chrysler received in 2009 to keep their companies open and running. Without government subsides, both of those car makers would have been toast. They were meant to save the companies, not create any jobs, at least on the front end. “Incentives” are paid to create jobs. There is a big difference.

In 2009, U.S. Department of Commerce Secretary Wilbur Ross (he was not Secretary Ross then) and I were on CNBC during the auto bailout discussion. Ross said on the show that the domestic auto industry was going down because of “subsidies paid by Southern states to foreign automakers.” I disagreed with him, saying, “Mr. Ross, these are not subsidies. They are incentives in return for billions in investment and tens of thousands of high-paying jobs. What you want to do with GM and Chrysler is a subsidy because the goal is to simply prevent them from closing for good.”

It’s easy to calculate the return on incentives. Don’t bother calculating tax generation or anything else other than wages. It doesn’t matter the size of the employer. Just count how many employees are working there and then multiply that by the average salary per year. Then compare that figure to the incentives that were granted. For example, the BMW plant in Greer, S.C.— just the plant — pays out wages of about $700 million a year. So, let’s say the BMW plant has averaged a $300 million annual payroll in the 25 years of its existence. That’s almost $8 billion in wages. . .so far. 

Trump team quietly plans increase in legal immigration

The biggest challenge this country is facing now, and for many years or decades to come, is that too few people are being born and too many people are aging out of the workforce. In other words, we cannot replace those workers that are retiring. Not only can we not replace our current workers, we can’t even come close to filling the number of jobs that are available.

I will give President Donald Trump credit here. He knows that we cannot replace our current workforce as a result of the lowest fertility rates in the nation’s history. If you recall, in his state of the union address, Trump said, “Legal immigrants enrich our nation and strengthen our society in countless ways. I want people to come into our country in the largest numbers ever, but they have to come in legally.”

I am sure that statement angered the hardline immigrant activists that support him. Regardless, Trump has charged his son-in-law Jared Kushner to work on a proposal that would increase the number of low- and high-skilled workers admitted into the country annually. Today, the U.S. brings in about 1 million legal immigrants a year. To replace our current workforce, that figure needs to be tripled.

Just look at our labor situation right now. There are 7.5 million jobs available and about 150,000 takers on average per month. In fact, in February, only 20,000 Americans were hired to fill 7.5 million available jobs. Just imagine what our economy would be like if those millions of jobs were filled in just two years?