Bribes As Economic Development

According to the Indianapolis Business Journal, Indiana lawmakers are considering paying people to move here.

Members of what I still call “The World’s Worst Legislature” (despite a significant amount of competition from places like Florida and Texas) are evidently considering what the IBJ calls “an extensive piece of legislation to restructure the incentive toolkit of the Indiana Economic Development Corp.” One “key” component would create a statewide remote-worker grant program.

Senate Bill 361 has a provision that would require the department to design and implement a program giving remote workers cash incentives for moving to Indiana.

A remote worker would be eligible for a grant of up to $5,000 a year with a maximum of $15,000 over the life of the program. The total grants, which would come from the IEDC, would be capped at $1 million this year and $1.5 million in 2023….

The bill also would allow businesses outside Indiana to apply for IEDC tax credits, if they bring at least 50 remote jobs to Indiana, paying at least 150% of the state’s average hourly wage. That would be about $25.

This interesting use of taxpayer funds is essentially an admission that Indiana isn’t a very attractive place to live–that (at least, outside Indianapolis, the city our legislators love to hate) people need to be bribed to move to the Hoosier State.

A few days ago, in another blog, I noted that Indiana’s Statehouse is filled with legislators who have exactly one policy proposal to offer for any problem you can name: tax cuts. When it comes to economic development, they assure us that the only thing businesses look at when looking  to relocate or expand is a “favorable tax environment.” Believing this, of course, requires a certain imperviousness to that pesky thing called “evidence,” but if there is one thing our GOP super-majority is really, really good at, it’s ignoring evidence.

Which brings me to yet another bit of unwelcome research, sure to be dismissed and ignored.

The Brookings Institution has been examining ways to “rejuvenate” states in the Midwest that have, as we say, “missed the boat.” The report begins by noting that there are currently two Midwests

One Midwest features communities that have diversified and turned an economic corner in today’s urbanized, global knowledge economy. In this Midwest, many of the region’s major metro areas and university towns have found new economic dynamism and relative prosperity.  

In the other Midwest, however, factory towns that have lost anchor employers continue to languish. Most of these small and midsized industrial heartland communities rely on traditional economic development strategies to reinvigorate their economies, including doling out incentives to attract or retain employers or attempting to create a more “business-friendly” environment with lower taxes and labor costs. 

Most of Indiana clearly falls into that second category. But as Brookings reports, there is “compelling new data” telling us that these traditional economic development tools are–if not entirely ineffective–far less effective than investments in quality of life and place.

Research on smaller communities has found that community amenities– recreation opportunities, cultural activities, and especially “excellent services (e.g., good schools, transportation options, including connectivity to urban areas)” significantly exceed so-called “business-friendly” policies in their ability to  contribute to healthy local economies.

Smaller places with a higher quality of life experience both higher employment and population growth than similarly situated communities, including those that rank high by traditional economic competitiveness measures.

Research has confirmed that people are willing to pay higher housing prices and even accept lower wages to live in places that offer a higher quality of life.  

Indiana’s lawmakers will have great difficulty getting their heads around another finding (assuming they would even bother to consult the research); studies, including this one, have shown that businesses are willing to pay higher real estate prices and offer higher wages in order to locate in places with more productive workers. 

More productive workers, of course, are produced by better schools. Not religious indoctrination academies supported by Indiana’s voucher program with monies drained from our struggling public schools, and not schools in which teachers are forbidden to teach accurate history…

The bottom line:

After estimating quality of life (what makes a place attractive to households) and quality of business environment (what makes a place especially productive and attractive to businesses) in communities across the Midwest, we found quality of life matters more for population growth, employment growth, and lower poverty rates than quality of business environment. 

Or, of course, you can just take some of the tax money generated by those low rates and try to bribe people to move to the “hanging on by a thread” areas of Indiana.

Given the pathetic history of Indiana’s General Assembly, I expect they’ll opt for bribery.


  1. Once again, this is jibberish produced by Brookings, who hosted an article by Mike HIcks from Ball State. Mike is a Koch shill that has peddled neoliberalism in all its forms since the 80s.

    These poor economic decisions have crushed Indiana’s communities except for pockets like Hamilton County where they’ve priced out the “rift-raft” that Indy has to deal with.

    Yes, the evidence.

    Here’s the evidence, in communities like Muncie, our top employers don’t pay any taxes because they were set up as tax-free institutions – hospitals and higher education.

    There is nothing “tax-free” about these institutions today. Far from it.

    The evidence is everywhere, but people like Mike are paid NOT to see it. The newspaper is paid NOT to print it. The TV media is paid NOT to produce the stories.

    It’s amazing how this game works. 😉


  2. The rural jurisdiction dominating state representation makes public/private collaboration in urban areas a challenge to balance revenue sharing to fund desired investment. Quality public school education, wholesome leisure family recreation opportunities, safe transportation infrastructure that minimize commute time, are among attributes that compete with favorable tax rate alone. If tax revenue is aligned with attributes that attract competitive labor and professional workforce, then concerns for favorable tax code is weighed in balance. While we cannot boast about snow capped mountains and pristine beaches, Indiana and Indianapolis can focus on quality of life issues that compete well with other workforce markets around the nation.

  3. Ah. Quality public schools… No. No. No. Rural America is all about burning books, banning books and banning the teaching of actual, true history. Why on Earth would these backward sods even consider providing high-quality education? If they did, the kids would grow up to see the awfulness of their backward-thinking towns and leave. What educated, aware and forward-thinking person wouldn’t want to leave a counter-productive lifestyle location?

    An example: Yesterday I had a follow-up visit with my surgeon after a procedure. He has a resident shadowing him. She told me she was from Kansas and that her school district actually went through her science books with a box cutter and removed any mention of evolution or Darwinism. Yeah. That kind of backwardness will drive smart people elsewhere.

  4. This money would be far better spent on bringing reliable internet service to rural counties and secondary towns and cities. Many areas cannot sustain industry, schools, hospitals, and their population because of inadequate internet service. It is lack of connectivity that his driving young people to leave their communities and the state.

  5. Senate Bill 206 is somewhere in the pile of “lesser” bills waiting to be heard; SB 206 would reinstate Public Employee Retiree’s 13th Check which they ended in 2021. This cut thousands of Public Employee Retiree’s annual retirement income. In 2017 we received notice and the order to REREGISTER to qualify to continue receiving OUR retirement checks. Disbursement of our checks had been handed over to State Street Bank Retiree Systems with our $37 or $39 BILLION fund balance. Where is OUR money now?

    Are you aware that orders from Amazon added Indiana’s sales tax to the cost of purchased items long before their court case approved Indiana residents paying sales tax when purchases did not come from Indiana corporations or stores?

    Has Indiana paid off President-ELECT Trump and Vice President-ELECT Pence’s $6 MILLION bribe to Carrier to keep their business here in the state when they knew the business would be transferred withing 3 months. Indiana officials knew this transfer was a fact and agreed to pay Carrier the bribe; a very large feather in Trump’s MAGA cap. Officials from the Mexican city where Carrier moved the majority of its business came here asking that they NOT move to their city. Wages would be so low they would only cover basics for employees and would NOT benefit local businesses or the city or increase the living scale of employees.

    We, as a Republican state, are sinking deeper and deeper in the mire of Trump’s ego based economic level benefiting only his crony’s 1% holding the majority of this nation’s wealth.

    “Given the pathetic history of Indiana’s General Assembly, I expect they’ll opt for bribery.” Should this sentence read as “continuing bribery”?

  6. You only need evidence if you want to produce results. If they only result you want is to “own the libs”, it isn’t even hard. Just keep doing what you’ve been doing for the last 50 years. The hell scape you want is just around the corner.

  7. They forgot to interview actual Hoosiers that left the state! As someone that never intends to live in the state again, nobody asked me for the reasons I won’t return. It’s mostly because of the attitudes of the locals. Forward thinking individuals that are smart enough to have a work from home job don’t want to live around Neanderthals that don’t believe in science, are racists a$$holes, and leave trash along the highways on their way to the fentanyl dealer! What future do you have in Indiana? Honest to goodness, it’s not the people. I tell people I grew up near Chicago because most people have never heard of Indiana but they all have good thoughts about the Windy City. The intelligent leaders of Indiana, that I include this Professor as, have a whole lot of work to do to end the brain drain that is Indiana. Props to IU and Notre Dame but how many grads have left for better pastures? /rant over

  8. Though empirical evidence refutes it, the Republican Party has been riding the Supply Side Economics (trickle down) gravy train since the 80’s. Rest assure, they ain’t getting off of it now. Facts be damned, indeed!

    And to Todd’s point, note how vociferous the local media is when it comes time to build one of the greatest economic development engines of all time: a sports arena. Whether it’s the Colts down in Indy or the Brewers/Buck in Milwaukee; Dems, Republicans, and the media all are on board with the usual self-serving talk points…none of which are true.

    Remember – when poor people get money, it’s welfare. When the rich get the dough, it’s called economic development.

  9. While I’m not supportive of this program, it seems a lot better than traditional corporate welfare where tax dollars are funneled to corporate interests rather than the workers. Indianapolis is awash in corporate welfare, often disguised as “private-public partnerships” which means the public takes the risk of the investment, while the private takes the profits. Example: We have the city-county building emptying out in Indianapolis, as prime a property as exists in the city. I guarantee you that we taxpayers will be handing over cash to a developer to redevelop the property and then giving them a 10 year tax abatement so they don’t have to pay property tax or reduced property tax. It’s the Indianapolis way.

    Indianapolis has the highest tax rates in the state. Much of that is due to all the tax increment financing (TIF) districts that exist in Indianapolis. Those TIF districts drain off tax resources that would otherwise go to schools or other local services, and redirect those resources to private, usually politically connected companies. Taxes then have to go up to pay for those government services. One thing the left and the right should agree on is stopping phasing out these tax increment financing districts. Unfortunately, Indy Democrats and Republican elected officials are all in bed when it comes to corporate welfare.

  10. In 2018, the writer, James Fallows, and his wife, Deborah, published a book: “Our Towns, A 100,000-Mile Journey into the Heart of America.” They had been flying their small plane around the States and reporting conditions in the numerous communities they visited – both positive and negative situations. I remember that their observations echoed the Brookings report (or vice versa – they were first with this data, I think). Their book and articles in the Atlantic describe cheerful and hopeful fates for communities that managed to work together and to give their imaginations support and room to soar.

    Interestingly, in about 1978 or so, I had an opportunity to re-travel a childhood path along secondary roads – driving from Florida north to North Carolina. Especially in Georgia, we passed through small, dusty, empty, depressing towns with no action, no one on the street, nothing visibly working or, apparently alive. As we made our way further north, suddenly we drove into a busy, busy town with many, many people, in all their myriad hues and appearances, moving up and down sidewalks, bustling, bustling. Fascinating – at that time, I felt proof of the obvious reality that these people working together were creating their own prosperity – it seemed to prove to me that the practice of racism (that we now identify as ’empty pools,’) made a perfect mess of life wherever it triumphed.

    I believe the Fallows’ book also provides the same cheerful proof.

    Now to a different, much, much less cheerful or positive topic. Something weird, dark and as it happens, even more frightening than empty pools – this is the Atlantic article Sheila cited earlier this week – “The Anti-vaccine Right Brought Human Sacrifice to America.” Please read it, if you haven’t yet. Equally fascinating and chilling, yet guaranteed to fly over the heads of the unfortunately threatened citizens.

    Thank you, as always, for listening.

    I should emphasize that reading this blog and accompanying comments feels like a constant education, a very much appreciated education. (Which also manages to be surprisingly encouraging.) Thank you all for your time and effort.

  11. Marion is an outstanding example of the ‘other Midwest’. Our local economic development efforts have been a joke for nearly 20 years. Amenities have suffered and the transportation net is a joke.Save the culture that exists through Indiana Wesleyan (and that is heavily influenced by religious intent) it has become more challenging. What was a city of 40,000 in 1970 is now about 25,000 (and 10% are IWU students). ‘where there is no vision, the people perish’. But still reliably Republican. SAD

  12. Investment in quality of life and place is the key to survival of communities in Indiana. I live in Jasper, near the “toe of the Indiana boot.” Having live a large part of my life in the Indy metro area, I am overwhelmed with the beauty and history of southwest Indiana that is the home of the Hoosier National Forest. But this area is in dire need of people. We need people to come here to live to keep our economy running and to keep the great companies such as Kimball here. (Just a point for this comment, no comapny located in Jasper has indicated they would ever leave the area.) I agree with the findings of Brookings, that quality of life is the factor that keeps or attratcs people and businesses to an area. But too many of our business and political leaders here in Southern Indiana believe that building a new terrain hughway through the Hoosier National Forest and bringing warehouses that offer $15/hour jobs is the answer to increase our economic viability. People are willing to pay the taxes if they get a return for their investment. Our problem in Indiana is not the unattractivness of place, but incompetence of our leaders starting with Mitch Daniels, that have destroyed our middle class and made Indiana the place with the largest income disparity in the nation. We all need to do what we can to get rid of our horrible political leaders and replace them with people that want what is best for the people that live here.

  13. Perhaps before the World’s Worst Legislature starts paying people to move here they better first pay people not to leave.
    In my family half of my generation left decades ago, and although from time to time they each express a desire to move back, all such discussions end up listing the social and political backwardness that Indiana is as the main reason they stay put. Now the current generation living here is making “get the hell out of here” noise.

  14. As an outsider looking in, $5000 is not very much money . Would be less than half of a 3rd party professional movers’ cost to move to Indiana or enough money to buy a few pieces of modestly priced furniture. Live next door(Ohio) with the same economic and social issues possibly a bit worse with inane politicians and frightened middle-aged white residents trying to return to a time that never existed. With that in mind, Gov. DeWine has brokered a deal with INTEL to build two factories in greater Columbus for $20 BILLION! This is a very viable project to produce chips required for almost everything that has a power assist. Intel has stated it would provide 3000 jobs with $135,000 salary/job. While lots of incentives were thrown in, the annual salaries would exceed $400 million. The salaries are in line with employees responsible for operating/controlling output of BILLION DOLLAR or more pieces of ultra special machines. That be the cost of entering the 21st century.

  15. I was under the impression that our legislators were of a mind to let businesses figure out -and to pay for – ways to get people to their jobs.
    As I read about this giveaway allegedly designed to attract workers to Indiana, I couldn’t help recall the arguments made when the discussion of public transportation is up for debate. The crowd touting this incentive at the same time wants to defund projects that are underway, and torpedo other efforts, to have a credible bus service in Indy. When talking down public transportation they have relied in part on the claim that the government shouldn’t underwrite corporate America’s need to move workers to where they work.
    I’m struggling to understand the difference between paying people to move to Indiana to work from their kitchen table and funding a transportation system that moves people to work in jobs that can’t be done from home. Seems like the same goal to me.

  16. Out of state developers have been lured here for years with large tax abatements to gentrify entire areas. Also they buy up blocs of vacant, abandoned houses and businesses but allow them to sit and further deteriorate; often just using them later as a tax write-off al la Trump. Local businesses have threatened to leave the state and are lured with large tax abatement to stay. Years ago, Allison was threatening to leave their Speedway location and were given a 10-year tax abatement; was their threat real or, knowing the way the system works, did they use the threat to get the tax abatement?

    SB 361 appears to be a lure for individual workers; will they be used to replace years long employees as Rolls Royce here did a few years ago. I believe it was 5,000 or more workers out of work and replaced by new-hires at much lower pay scale; 3-4 years later former workers were offered their old jobs back if they would work for minimum wage. Would SB 361 workers be needed for the out of state developers gentrifying areas or building new businesses because locals won’t work for the wages offered? Or does Indiana have less productive workers due to our voucher based education system? It’s a Monopoly game with real families given no chance to win.

    As Theresa Bowers so aptly stated; “Perhaps before the World’s Worst Legislature starts paying people to move here they better first pay people not to leave.” In today’s economy, aren’t out of state workers wondering why Indiana would have to pay workers to move here, why the state doesn’t have residents willing to work at jobs offered through SB 361?

  17. I have to agree with Todd this morning, the political realm is loaded with Riff Raff 👍

    I also have to agree with Vernon this morning. You can’t get any more neo-fascist then telling people what they can and cannot read. A free moral agent means, you are free to make your own decisions about your life. Unfortunately there seems to be so many that have combined church and state, neo-fascism, with religious neo conservatism. None of it is appropriate. Especially if you are supposedly a democracy!

    I was asked by the head of the democratic party in this area of illinois, to run for office many times. But I also have Friends of mine and Friends of my wife who have decided to pick up that mantle, and they were really good folks. And each one of them were thrown under the bus. If you rock the boat, if you try and bring change, they’ll eviscerate you in a heartbeat. The only way to solve that other than blowing everything completely to shreds, is to blow it completely to shreds, lol! Executive order, executive martial law! Because I guarantee if one side doesn’t do it the other side will. You better git while the gittin is good. But, I have zero faith in humanity and his creation of government.

  18. Europe is a good example of what happens when state size areas compete. After a while everyone loses and that’s why they all agreed to combine economically and avoid those loses.

    Here in the States formerly United we have gone the other way, from good to bad in my and apparently Europe’s opinion (except for Great Britain which has the same kind of political dysfunction as we do.

    Why isn’t the answer the same on both sides of the pond?

  19. I think the bill’s plan to pay for bringing workers into the state is an admission that living and working in Indiana is so out of step with what it could be that it will fail. I remember long ago a CEO who said that the first thing he looked at when his corporation wanted to expand to a new community was their library system(s). I can’t know how his corporation fared with such expansion(s) but given this CEO’s positive insights I would guess that it did well.

    Humans are not merewidgets to be moved around on some corporate chessboard for the sole benefit of “the company.” Such workers have families, children, and a place in their social culture that calls for good schools, libraries, sports and academic opportunities etc. Indiana has apparently been in bed with the corporate model for so long that greedy corporations alarmed at the exodus of their workers who aren’t going to take it anymore have gone to their friendly politicians to pay off people to come to town – or even work remotely – when they should be correcting the conditions that brought about the exodus via amendment of their model (the real remedy but one unlikely to be chosen).

    So we should spend millions of taxpayer monies to maintain a 1950 corporate model? My vote? Nay. . .

  20. Great essay and so many thoughtful comments. I’ll only add that the General-Assembly-EDC-Complex in Indiana is largely responsible for what they have financed over the last 40+ years (under both Dems and Repubs). Instead of investing in Hoosier human capital they invested in physical capital and not even high-tech capital. But that would have required swimming against popular political currents and being truly innovative. But no. The ONE thing they COULD have done and STILL could do is lower tuition for both in-state and out-of-state students at all our state universities and Ivy Tech, the state community college system. But, again, no.

    In Indiana 18-year old B-student from a solid middle-class family is expected to wager $50K-$100K or more that they will graduate and also secure employment sufficient to retire that debt over the next 20 years, AND be able to pay for housing, transportation, food and in many cases, health care. It makes absolutely no sense as public policy. But as a business strategy for monetizing a market for financing higher education to let state governments off the hook? Solid Gold.

  21. NO NO NO
    You don’t understand – big corporations are addicts – they need more bribes and bigger bribes to stay
    What we really need to do is cater to their true desire — to be gods
    Annual tributes of gold bars and don’t forget the virgins

    I remember the competing TV ads – “move your business to our state”
    All of the states try to bribe big business to move, but they don’t do a thing to encourage local small businesses.

    Personally, I have lived in six states – Academic jobs, well you expect them in college towns and cities – IT jobs are concentrated in certain areas, ones that seem to value educated workers and cultural amenities. With a different legislature, those jobs could have been attracted to this area. The midwest (both versions) will have one thing that other areas might soon lose – potable water.

    If we preserve our environment, support education and the arts, and care more about our citizens/workers, Indiana could become a very attractive place for business. Then again, if pigs had wings, they could fly.

  22. I moved to Indiana in the 1970s from Texas. I returned to Indiana briefly in the 1980s and the 1990s, when I left for good. I hope I never have to live in the state again. The only reason I would return to HoosierLand is because my son lives in the -iana part of Michiana. I would be more likely to live in the Mich- part, though the appeal of Mich over Indiana is rather like chosing to vote for Democrat over Republican. Voting Dem is the least worst choice since that political party is far less delusional and nowhere near as sociopathic and psychopathic as the Repub Party. Thankfully, I don’t have to make the least worse choice at present because the state I live is like many other US states. It is, particularly when it comes to federal politics probably more of a one party state than the USSR was in its heyday.

    Indiana today, like many other so-called red states, is dominated by delusional thinking. Delusional thinking blames the morass that characterises large swathes of the US on, for example, high taxes on the rich and limits on the operation of the free market, something that links up with the delusional Horatio Alger myth and its magical thinking. The actual reason, of course, for economic distress in large parts of the US, including in Indiana is deindustrialisation and globalisation, both of which were polemicised for by members of both dominant political parties in the country.

    Deindustrialisation deindustriaised large swaths of the state including places like Hartford City. Globalisation brought corporate globalisation which benefited corporations and bankers. It certainly didn’t benefit workers who are not free to move around the globe and seek out the best paying jobs, something that is, at least in theory, central to the capitalist myth of rational consumers. Globalisation also led to the dominance of the service or retail sector of America’s economy, a sector of the economy that historically has low wages and limited, if any, benefits.

    That so many don’t recognise this reality and prefer the simplistic rhetoric of scapegoating demagogues says it all. Of course, the manipulation or propagandisation of the masses for political and economic benefit is not new. Nor are the levels of delusional thinking. What has changed is the means and modes of communicating this sort of delusional thinking and the sociopathy at its heart.

  23. What the legislators won’t tell you is that many of those supposedly high paying jobs that result when a company moves to Indiana after being offered 10 year tax abatement and other subsidies, is that most of the highest paying jobs will go to their current employees who are already trained to do the work, not to Hoosiers looking for a good paying job.
    Technology and globalization are moving so quickly that those new workplaces have to be upgraded or abandoned for newer facilities, the workers being replaced by robotics, the administrative staff working remotely. In 10 years, after the abatement and subsidies terminate, the corporations will be looking for a new place to move.
    Without a well-educated workforce, not specifically trained to any specific company’s job requirements, Indiana will remain a backward and repressive place to live. Young people leave in droves after finishing their education, looking for a quality of life that doesn’t exist except in the delusional and willfully ignorant left behind. Rural counties are losing population for a reason.
    Sad to say, but if there were reasonable alternatives available to me, I wouldn’t be here. Several recent visits to the statehouse while the legislature has been in session proved to enlighten me about corrupt and self-serving politics, well-fed by corporate lobbyists.
    Why not pay a decent living wage to teachers instead of sending the money into private hands where the money won’t be spent in the local economies? Duh!

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