Mon
Feb 22 2021
10:01 am
By: michael kaplan

Pratt & Whitney will build a 1 million square-foot advanced manufacturing center on a 100-acre Asheville site the Biltmore Farms Co. offered to Pratt & Whitney for $1, part of $15 million in state economic incentives plan that lured the company to North Carolina instead of several competing states.

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Treehouse's picture

Engine failure?

And if they get sued what happens?!

yellowdog's picture

Advanced manufacturing versus warehouses

Amazon plans 800 $15/hr jobs in a warehouse and Pratt & Whitney plans 800 jobs paying twice that. Only the Asheville jobs can suupport a middle class life.

bizgrrl's picture

Hah! Blount County (Alcoa)

Hah! Blount County (Alcoa) could have given away 100 acres for $1 to get these better jobs. The Amazon facility is on 89 acres and there is more available in that location. Alas.

Bill Lyons's picture

Amazon looks pretty good.

I suppose I am an outlier here but the Amazon deal look good and an excellent use of the available land. This creates 800 jobs paying $15 hour with full-time employees receiving medical and other benefits including a 50% 401k match. Full time at $15 is $30,000 yearly.

This is not employment nirvana to be sure. It is hard work and many positions are not full time, but it does require only a HS diploma or GED. Only about 25% or Blount County adults have a college degree. There are plenty of people in the area for whom such a job would be life changing. The $15hr wage will also put pressure on other employers.

Perhaps Pratt and Whitney would be a better catch but it is so hard to compare the state incentive packages or the workforce demands and, in any case the really good outcome need not be the enemy of the good one.

fischbobber's picture

On the other hand,

They are displacing 30 dollar an hour jobs at UPS and USPS. The loser is the worker with this plan.

michael kaplan's picture

Bloomberg, December 18,

Bloomberg, December 18, 2020

Many Amazon warehouse employees struggle to pay the bills, and more than 4,000 employees are on food stamps in nine states studied by the U.S. Government Accountability Office. Only Walmart, McDonald’s and two dollar-store chains have more workers requiring such assistance, according to the report, which said 70% of recipients work full-time. As Amazon opens U.S. warehouses at the rate of about one a day, it’s transforming the logistics industry from a career destination with the promise of middle-class wages into entry-level work that’s just a notch above being a burger flipper or convenience store cashier.

yellowdog's picture

Amazon jobs are better than some

but we should not pretend that it is some great coup, Without union representation, these workers will be treated like the replaceable parts they will be. Anybody who has looked will know the health and safety and scheduling trials of Amazon workers worldwide. It is revealing and accurate to say that these jobs will raise the standard here.

bizgrrl's picture

There is a problem with City


There is a problem with City of Alcoa over extending
. I don't see how the Amazon facility is going to fix the problem.

yellowdog's picture

It is not clear what the objective is

of all the expansions. Angling for tax revenue from commercial transactions (as opposed to property taxes) seems the common denominator. But what for? Growth for the sake of growth is not a plan.

michael kaplan's picture

Growth for the sake of growth

Growth for the sake of growth is not a plan.

Growth - what is often called 'economic development' - is intrinsic to the capitalist system. Once growth stops, the system fails.

Bill Lyons's picture

Growth - what is often called

Growth - what is often called 'economic development' - is intrinsic to the capitalist system. Once growth stops, the system fails.

Well, just about every kind of society desires economic development and growth, not so much for growth's sake but as a way to provide opportunity for residents or constituents, or in authoritarian societies, resources to maintain power. It was a huge staple of the Soviet's 5 year plans. East Germany was every bit as much about economic growth as was West Germany with production quotas,etc. Non capitalist, central planned China was all about economic growth. Recall Mao's Great Leap Forward. While these systems' failures (largely because of economic decay) have left precious few non-capitalist,central planned economies, Kim Jung Un is certainly of the same mindset.

North Korea's Growth Plan

Kim Jong Un’s ambitious new plan for the next five years is aimed at developing North Korea’s shattered economy,

Stepping from global systems to local government, I think it is safe to say that attracting jobs and tax revenue to any city or county is not so much about "growing" the population as growing the tax base. That is more of a strategy than a plan but a path to fund schools and provide services such as affordable housing as well as opportunity for residents to build better lives without having to move far from home.

Without growing the tax base the public sector suffers from having to reset the tax rate so that the city or county does not gain revenue from higher assessments that occur through inflation. The expense side of the ledger is not so constrained. Stagnant revenues with increasing expenses is not a recipe for success in any enterprise.

With all of that in mind, of course state and local officials should not mindlessly chase every project. And there does need to be a plan for population growth lest infrastructure demands put too great a drain on resources. Each project or development merits real scrutiny. Personally, considering the totality of the circumstances, I think locating Amazon here makes good sense.

fischbobber's picture

Updating Amazon rumors

The latest hot rumor about the Amazon facility is that it will be a fulfillment warehouse with small package consumer goods and electronics. Strictly a warehouse fulfillment center for east coast fulfillment.

As such, assuming there will be a health insurance and some kind of retirement program in the benefits structure, a fifteen dollar an hour starting wage does indeed make them an upper tier employer in this area.

You are right Dr. Lyons and I apologize for jumping the gun on my response. I stand corrected. Now the East Town project may well be another story.

Joe328's picture

Growing Tax Revenue is a Political Pipe Dream

Allowing any retail business a TIF or PILOT to increase sales tax revenues is ignorant. When a new big box store opens using a tax break, I don't spend more on groceries or supplies since my income has not increased. While the local mom and pop store loose customers to big box store, the results is nothing more than a new retailer collecting the sales tax. The BIG difference is the mom and pop spent their profits locally creating more local sales tax revenue. The big box stores pays low wages and deposits their profits out of state. The local mom and pop store has property tax increase to support the city services provided to the big box at no cost.
So tell me how tax revenues grow without income growth?

michael kaplan's picture

So tell me how tax revenues

So tell me how tax revenues grow without income growth?

That's a good question. Is anyone tracking income growth in the community? The income of many of my friends has declined in the last year, and they're lucky if they still have jobs.

So, it would be useful to track real income growth in the Knoxville MSA over, say, the last 20 years.

Bill Lyons's picture

Per Capita Real Income change for US & Knox MSA

So, it would be useful to track real income growth in the Knoxville MSA over, say, the last 20 years.

The Knoxville area seems to have done a bit better than the US as a whole. See below for Real Per Capita Income (2012 dollars) for the US and the Knox MSA between 2009 & 2019.

2009 / 2019 / Increase
US -- $41,750 / $51,424 / +23%
Knox $39,666 / $49,374 / +25%

Source Federal Reserve Bank of St. Louis

US Per Capita Real Income

Real Per Capita Income Knoxville MSA

yellowdog's picture

Fishbobber says "As such,

Fishbobber says "As such, assuming there will be a health insurance and some kind of retirement program in the benefits structure, a fifteen dollar an hour starting wage does indeed make them an upper tier employer in this area."

An income of ca. $30,000/yr being "upper tier" does not indicate an especially good situation. Of course if the boss makes you work lots of overtime, at whatever time of day you are "needed," you could make enough barely to afford someplace to live in this area.

Bill Lyons says, correctly, "And there does need to be a plan for population growth lest infrastructure demands put too great a drain on resources. Each project or development merits real scrutiny." So, is there a plan? What is it? Who made it? Who provides "scrutiny?"

fischbobber's picture

To be clear

I was referring to warehouse jobs and work. There is a belief among some of us in the industry that Amazon will open a local delivery hub. Fifteen dollars an hour for those workers is well below prevailing wage for this area. Watch the East Town site.

yellowdog's picture

How does a "local delivery hub" fit into the larger system?

IS the work better paid?

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