State pays dearly for these jobs

Published 11:21 am Monday, February 26, 2007

By Staff
(This editorial originally appeared in the Wilson Daily Times.)
How much is a new job worth? In North Carolina, the answer is more than a million dollars.
That’s what the state, along with local governments, is paying to Google, the hugely successful Internet search engine, to build a ‘‘server farm’’ in Caldwell County near Lenoir. The bank of servers, which will keep Google’s search capabilities ahead of Internet growth, will employ an estimated 210 people.
For these 210 jobs, the state and Caldwell County are ponying up an estimated $260 million. You don’t need a computer to do the math: Google will get $1.24 million for each job it creates.
Now, Caldwell County is desperate for jobs. It has lost hundreds of jobs in the furniture industry, most of them migrating overseas. And Google is a high-profile catch. If it makes Caldwell County widely known in the information technology field, more jobs could be attracted to what was once a land of timber, wood products and furniture.
But there’s also plenty of reason for skepticism. The 210 people working at Google’s new facility probably are not going to be laid-off furniture workers. Google is likely to import the workers it needs for the highly technical, highly specialized, high-paying jobs it brings to North Carolina.
Google’s investment is estimated at $600 million, more than double the state’s incentives. But that investment will produce relatively few jobs. Most of Google’s costs will be in capital — the sophisticated computer servers that will process Internet searches. Technocrats will be needed to keep the servers humming, and the facility will consume large amounts of electricity, both to operate the computers and to disperse the heat they produce.
Google’s million-dollar jobs are prompting some legislators to take a second look at the state’s incentives packages for new industries. In both the Google deal and in Forsyth County’s Dell Computer deal, many suspect the state ‘‘got taken.’’ Google executives reportedly demanded secrecy and threatened to quit talks in the manner of a North Korean apparatchik, and Dell apparently made North Carolina think other states were offering bigger incentives.
An overhaul of state incentives is overdue. Incentives have failed to help the most-distressed counties, and a 2003 University of North Carolina study found the state’s primary incentives program actually produced only 4 percent of the jobs it claimed.
Changes are overdue. Stop us before we give away the farm. Again.