We were surprised to read Stacey Pickering’s attack on our report about the $1.3 billion in subsidies made available to Nissan in connection with its assembly operations in Mississippi. The surprise was both at who wrote the article and what it said. Why is the Mississippi State Auditor responding to a report that criticized a private corporation and said nothing negative about his office?
Pickering takes pains to point out that his office has been auditing Nissan’s employment figures since the plant opened and that the company has met the minimum requirements mandated by its agreement with the state. This is the same position taken in the brief statement released by Nissan itself. We don’t quarrel with this claim.
The main focus of our report was not on overall employment levels but rather on the quality of a large portion of the jobs that have been created in relation to the magnitude of the subsidies.
Never mentioned in Pickering’s column (or in Nissan’s statement) is the fact that the audits have shown that a significant percentage of jobs created at the Nissan plant have been temporary positions that pay as little as about $12 an hour, far below the level for regular full-time workers. The temps are also denied many of the benefits received by those regular employees.
The audit for 2007, for instance, found that more than 28 percent of the workers were temps. The published audits for the past few years have been much less detailed and have not provided a breakdown between permanent employees and temps.
Our report contrasted the high number of temps—which under the state’s agreement with Nissan may be counted in determining whether minimum employment levels have been reached —with the fact that those subsidies, according to our estimates, could total $290,000 per job. While Pickering refers to the number of “direct jobs” created, the data he cites includes all workers employed at the Nissan plant, not merely the number of regular employees hired directly by the company. There were, for example, more that 1,400 temporary employees working at the Canton facility at the end of 2007. We thus wrote: “Taxpayers have paid premium amounts for jobs that in many cases are far from premium.”
Pickering’s column claims that Nissan workers “enjoy a secure job with very good pay and benefits,” while Nissan claims that its “team members hold some of the most secure jobs in Mississippi and enjoy competitive pay.” For the temps these statements are – to borrow from Pickering – “false and misleading”: their jobs are insecure with low pay and poor benefits.
Pickering also writes about the $3.6 million that Nissan pays to Madison County each year. That figure is accurate, but what the Auditor fails to mention is that the amount is far below what Nissan should be paying in ad valorem taxes based on the value of its real property and equipment. We estimate that this tax break amounts to about $7 million per year.
In other words, Nissan is not doing the county a favor by paying the $3.6 million per year; the county is doing the company a favor by allowing it to avoid two times that amount in additional payments. Those lost revenues could be put to good use by the county, which has no doubt benefited from Nissan’s presence but has also incurred additional costs for which the company is not paying its fair share.
Pickering also makes the argument that Nissan’s presence has helped the state attract other investments such as the plant built by Toyota and the one planned by Yokohama Tire. He fails to note that Toyota was offered a subsidy package reported to be worth $354 million, and $130 million in public funding was recently made available to Yokohama. These deals, like Nissan’s, have to be evaluated in terms of costs as well as benefits — and in terms of job quality not just job totals. On these terms, Mississippi’s deal with Nissan is nowhere near as good as Pickering would have us believe.
Philip Mattera and Kasia Tarczynska
Good Jobs First