New Mexico’s pols are falling over each other, attempting to take credit for Facebook’s new data center in Los Lunas. But a new study by Good Jobs First, a liberal research organization that scrutinizes corporate welfare, explores some inconvenient facts that the state’s political class enthusiastically ignores.
“Money Lost to the Cloud: How Data Centers Benefit from State and Local Government Subsidies” is a scathing indictment of the billions of taxpayer dollars being given away to companies “like Google, Microsoft, Apple, and Facebook.” Some highlights:
* “[D]ata centers have a small employment impact. While the number of construction jobs is comparable to building a factory or distribution center, an operating data center requires few permanent workers: an average of just 30 to 50 permanent jobs.”
* As for compensation, the positions “created are a mix of low-paying janitorial and security jobs and some more remunerative technical positions.”
* Economic benefits to local businesses are “limited.” The servers stored at the centers are purchased “from companies such as HP, IBM and Oracle that source from offshore plants.”
* Long-term, the fate of subsidized facilities is unknown. “What is the life cycle of a data center? Might not companies demand a renewal of their tax breaks as they re-equip data centers? We … have seen many examples of companies threatening to relocate if new subsidies are not offered to older facilities. With the tech world’s notoriously short product life cycles, there is no guarantee that data centers will stay around for two or three decades.”
Access to industrial revenue bonds, GRT reimbursement, LEDA funding, JTIP subsidization — New Mexico taxpayers are handing Facebook a pretty sizable package of perks to set up shop in Los Lunas. Supporters of the giveaway should read “Money Lost to the Cloud” — perhaps they’ll change their minds about “this … big win for our state and the community here.”