Did Michigan Narrowly Dodge a Foxconn Con?

Michigan officials are all sad that Wisconsin got the Foxconn plant.

Now when we see what was offered we might just take a moment and be glad that as taxpayers it was Wisconcin that got it after all.

The Detroit Free Press: Michigan offered Foxconn $3.8 billion for flat screen plant, still lost to Wisconsin's $3 billion bid

The Detroit News: Inside Michigan’s $7.3B pitch to Foxconn

Note that two different news papers, owned by the same management group are about 4 billion dollars apart in their description of the offers Michigan made to Foxconn.

Ah, that's just petty cash among incentive plans, right?

So let's take the lower 3,700,000,000.00 number, noting that is about 7% of the entire state budget - for an incentive to one company.

Reading the articles its rather difficult to say how many proposed jobs were claimed to be created by these moves, nor how would actually be created by this incentive plan, and as such the following calculatiosn may be totally off under the principle of JGIGO - Journalism Garbage In, Garbage Out.

So, reading between the lines The Detroit News says of the 3 Billion portion of the offer that

Wisconsin won the first round of the Foxconn sweepstakes after finalizing a $3 billion incentive plan that will reportedly allow the company to qualify for up to $2.85 million in cash from state. Foxconn plans to build a liquid-crystal display panel plant in Racine County and will qualify for the full state incentives over 15 years if it invests $10 billion in Wisconsin and ultimately adds 13,000 jobs paying an average salary of nearly $54,000.

Basically that portion will cost Wisconsin and not Michigan now $230,769.23 per job or the government is essentially paying the $54,000 annual salary for each of these workers for about 4 years. Putting them all on welfare directly, or heck giving each of them $100,000 in cash upfront rather than having their employing unit on welfare would be cheaper, neh?

But it gets better, and possibly it will become worse for Michigan.

The Freep offers the following gem:

The jobs announcements from Foxconn may not be over, as the offers from Michigan and Wisconsin show.

Both states bid on another potential factory known as Project 868. Little is known about this plant but Michigan expected it to bring a $4.2 billion investment from Foxconn and up to 5,200 jobs. In their June letter to Foxconn, Michigan officials offered the company $3.1 billion in incentives for Project 868.

Well, 3.1 billion by 5,200 jobs is a whopping $596,153.84 subsidy per job, and dividing it at the above claimed average salary of $54,000 would mean the state via the subsidy (in other words, your taxes) would be paying the worker's wages for the company for 11 years.

How anyone thinks that Michigan winning this bid would be an actual win for Michigan taxpayers is beyond me.

Did anyone actually do a cost-benefit analysis or was the shiny lure of a technology company promising jobs in return for massive subsidies overriding any rational thought?

Sure, a ribbon cutting ceremony and a claim that high-tech manufacturing is coming to Michigan is nice and all, but the level of outright bribery involved via these incentives and the costs imposed on all the people in Michigan who are not beneficiaries of this largess is pretty much outrageous.