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Labor's Edge: Views from the California Labor Movement

Time to End the Corporate Gravy Train

by Art Pulaski, California Labor Federation

It’s no secret that corporate CEOs game the system to their favor. There’s a maze of loopholes and tax dodges for big corporations like Walmart that the rest of us couldn’t dream of getting. These big corporations are riding the corporate gravy train. And taxpayers like us are paying the fare.

Imagine a program that encourages unscrupulous companies to eliminate good union jobs, pack up and move to another part of the state, and get a fat tax bonus for hiring workers at low wages.

California’s poster child for the corporate gravy train is the “Enterprise Zone” (EZ) tax credit program. The program is supposed to encourage job creation in disadvantaged areas. But the only thing it actually encourages is low-paid jobs with our tax dollar support.

Studies show that this corporate enrichment program has no effect on job growth rates, but it sure takes a lot of our money. This boondoggle costs the state $700 million a year, and it’s growing by 35 percent every year.

California’s economy is still fragile. Every available dollar of state spending should go to create good jobs and strengthen the middle class. The enterprise zone program does neither.

And who is being paid with our tax dollars to take away good union jobs for low-wage hires? The vast majority of enterprise zone tax breaks go to corporations with over $1 billion in assets. Walmart. McDonald’s. Target. Low-wage, anti-union employers that, like pigs to the trough, slurp up our taxpayer money to make themselves even richer.

Defenders of this program say it’s about creating jobs for low-income workers and veterans. Wrong! Last year, only seven percent of hiring credits went to workers that are economically disadvantaged, and less than one percent went to veterans.

Some supporters of the anti-worker EZ program are democratic legislators who claim to be pro-union! It’s time we insist that state spending is used to create good jobs, not steal them away. And it’s time to smoke out those “pro-union” Democrats in Sacramento who keep voting for the EZ rip-off, and tell them to stop hurting union jobs. 

The California labor movement is launching a campaign to reform the EZ boondoggle. The campaign has a simple principle: Every single corporate tax break must be put to the jobs test. Either prove these tax breaks create good jobs or eliminate them. The end.

Big corporations have had a free ride on our dime for too long. It’s time for us to fight back, starting with the wasteful EZ program.

Let’s derail the corporate gravy train.


Learn more about enterprise zones.

Posted on 03/18/2013Permalink

More posts by Art Pulaski

Reader Discussion

Good information and good action Art. Thanks for stepping up to this issue.
Ed Sanford, AFA-CWA, Council 11, SFO

at 6:41 pm on Fri, Mar 22, 2013Posted by Ed Sanford

Certainly makes one wonder about the motives of California companies in this win win concept.

Does anyone know where to access what companies have benefited from the Enterprise Zone, specifically the Los Angeles Times?

Thank you,
IBT/GCC Local 140-N

at 1:34 am on Tue, Apr 2, 2013Posted by Edward Padgett

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