Alabama Defines Favored Industries in the Corporate State
If you want to get special privileges and crony handouts in Alabama, you need to have a company in one of these industries:
automotive, automotive-industry related, aviation, aviation-industry related, medical, pharmaceutical, semiconductor, computer, electronics, energy conservation, cyber technology, and biomedical industry
For example, if you are in one of these businesses, you don't need to bother to accumulate a block of land for your plant the old-fashioned way, by buying it from the current owners. Companies in these industries can now get the government to seize the land by eminent domain and hand it to them.
I am not sure why these are the favored few industries, but this list matches similar lists in other states of industries that get special tax breaks, relocation incentives, subsidies, protection from new competitors, etc. The rest of us who run unfavored businesses have to pay towards the profitability of these industries, because for some reason they are particularly good at re-electing politicians.
PS- I would add liquor wholesalers, professional sports teams, car dealers, and media companies to the list of locally favored industries.
David:
I accidentally read your PS as including "meth dealers" which is certainly not what the state wants...
April 8, 2013, 2:14 pmMingoV:
"I am not sure why these are the favored few industries..."
They all are relatively high tech and have relatively low environmental impact. The former is sexy (but stupid in a state with a large pool of low skill workers). The latter is important because they're easier to get past the environmentalists.
April 8, 2013, 2:52 pmmatthew.slyfield:
"I am not sure why these are the favored few industries..."
Automotive, automotive-industry related, aviation, aviation-industry related, medical, pharmaceutical are heavily unionized.
Semiconductor, computer, electronics, energy conservation, cyber technology, and biomedical industry are high-tech and hip.
April 8, 2013, 3:16 pmDan Sherman:
They are all industries that tend to be higher dollar and harder to offshore. I think that's the reason. Not an excuse, of course. But I believe that is the correlation.
April 8, 2013, 4:27 pmDon:
Because those who are CLEARLY smarter than you and I believe these industries (well established as they are) are the future. And they are so good at determining what the future of industry is.
I think somebody needs to create a mutual fund which shorts any industry that government favors. The bigger the bet by our governmental betters, the bigger the short. Imagine how much money you'd've made in the last 4 years!
April 8, 2013, 5:11 pmsteve:
This is just a list of industries that employ a lot of STEM graduates. You know, those technical degree types that don't have much of a problem getting a job anyway. Even in this economy. They get paid a lot better then average too. So, why do the politicians want to subsidize them. My guess (and its only a guess) is that the politicians are calculating that they will bring in more in taxes then the subsidies, what with "high paying" jobs and all.
April 8, 2013, 7:01 pmSamWah:
"Automotive, automotive-industry related, aviation, aviation-industry related, medical, pharmaceutical are heavily unionized." Not in Alabama. Which could be a reason for them to move.
April 9, 2013, 9:21 amsch:
You left out Bass Pro shops. They are regarded as REALLY GOOD THING, by the locals and are masters at manipulation of local (city and county level) officials who fall all over
April 9, 2013, 9:36 amthemselves putting land buys together, running utility lines and throwing huge sales tax rebates for decade or more if Bass Pro even lets drop the possibility of a store in the
area.
NL7:
To the extent a business involves higher-paying jobs, higher skills or higher education, and a large physical plant with a large number of employees, politicians like it. Ideally it will also make something concrete enough to point out (even if it's not physical) as a result of the policy.
So politicians can claim credit for building planes and the higher paid jobs there, or for pharmaceutical products and the higher education it supports. Then they can turn around and supports other projects, such as education funding, freeways, or canals, that will be enlisted to further focus the region on supporting this industry. And the politician gets credit for supporting the canal that made more shipbuilding jobs possible, or whatever.
Jobs that involve people sitting in offices are less desirable, since they are more interchangeable and do not require the same capital infusion. If you could turn a warehouse, hotel, or apartment building into an office space, then you aren't making a media splash for breaking ground on a 100-acre research campus.
April 9, 2013, 11:01 amNL7:
Don't need higher tax revenues, just need to be associated with positive things. If the pharma company builds a facility in Indiana, it's hard for Ohio politicians to claim credit. There may be little net change for the Midwestern economy if the company relocates east, but there is a big net change for politicians.
This is a list of industries that make large capital infusions and employ lots of people, including higher skilled people and lots of support and maintenance staff. The capital infusions keep them tied longer and the large number of desirable jobs makes people like them.
April 9, 2013, 11:06 amsteve:
"This is a list of industries that make large capital infusions and employ lots of people, including higher skilled people and lots of support and maintenance staff. The capital infusions keep them tied longer and the large number of desirable jobs makes people like them."
Other industries require lots of capital and provide lots of jobs as well. Mining or a new Prison. But, they don't require STEM graduates. So, I would argue the "higher skilled" people is the key to getting on the list. Besides, most facilities for the desired industries don't take all that much physical capital. Basically, an office full of computers for the engineers or a lab for the chemists to work in. The manufacturing itself takes a lot of capital, but those facilities are few and far between (basically one factory for one make of car for all of north america), and in many cases overseas anyway.
April 9, 2013, 11:40 amMatthew Slyfield:
Only a tiny minority of jobs in the named industries require STEM degrees. Most of the jobs are low to mid skill factory jobs.
April 9, 2013, 5:44 pmsteve:
I don't know about other industries, but I work in the semiconductor industry. One third of all employees are engineers. It takes 400-500 hundred engineers to design an intel computer chip. Of course that's not the only chip they make but other chips are easier. It takes just as many to design the new equipment for the next factory. A new process comes out every 18 months or so. Maybe same building. But, new equipment. Then maybe 400-500 technicians (or mid skill factory jobs as you say) to run the factory that makes 10's of millions of chips a year. Their is actually more design work then factory work. It's mostly automated you see. Humans are dirty and mess up the chips. So, they have as few as possible to keep the clean rooms particle free.
The other employees that make up a large percentage are those in any business I think. Human resources, marketing, maintenance;. etc.
April 9, 2013, 8:49 pmMatthew Slyfield:
1/3rd is still a minority, although significantly larger than most of the rest of the industries named.
April 9, 2013, 9:29 pmJIMC5499:
These also tend to be UNION jobs.
April 10, 2013, 7:34 ammarque2:
Well yes, and the drive to push out Meth dealers from the United States, has just pushed the Industry into Mexico. Now instead of US citizens getting money off of Meth, it is all going to the drug cartels.
Not that I want meth production and use in the USA - but it is definitely a more complex problem then "lets ban it."
I also think that meth and crack are products of the 1980 drug war. If cocaine were legal, and therefore low priced, folks who clamor for such things would be taking the coke, because it was banned, and made expensive, drug dealers looked for and found higher potency alternatives, which are much worse for human health than the original drugs they fought against.
Now it is too late to deregulate the relatively benign cocaine, because we already have the meth and crack.
April 10, 2013, 9:22 amnehemiah:
That could be, but Alabama is a right to work state so unionization is not automatic and probably unlikely.
April 10, 2013, 1:13 pm