Occupations with Highest Projected Job GrowthAVERAGE ANNUAL JOB OPENINGS350030002500200015001000$12.69/hr $24.63/hr $6.63/hr $7.75/hr $10.85/hrManufacturing Registered Nurses Waiters & Food Preparers Retail SalesTeam Assemblers Waitresses PersonSource: ACPP analysis <strong>of</strong> Alabama Department <strong>of</strong> Industrial Relations, Occupational Statistics —2014 projections <strong>and</strong> 2007 Statewide Employment <strong>and</strong> Wage Estimateswould construct a $3.7 billion steel-making facilitynear Mobile, <strong>the</strong> state has achieved a stellar record<strong>of</strong> industrial recruitment. A number <strong>of</strong> nationalpublications have recognized Alabama’s efforts;for example, Site Selection designated <strong>the</strong> AlabamaDevelopment Office as <strong>the</strong> top <strong>economic</strong> developmentagency in <strong>the</strong> United States for both 2004<strong>and</strong> 2006. 50 A 2006 poll <strong>of</strong> site-selection consultantsby Expansion Management ranked Alabama ashaving <strong>the</strong> nation’s best workforce training incentiveprogram, <strong>the</strong> Alabama Industrial DevelopmentTraining (AIDT) Institute. 51Though it is administered under <strong>the</strong> state’s postsecondarycollege system, AIDT functions asa training service for incoming <strong>and</strong> exp<strong>and</strong>ingindustries. In 36 years <strong>of</strong> operation, <strong>the</strong> programhas provided free skill development for thous<strong>and</strong>s<strong>of</strong> Alabama’s workers, but its success is measuredin terms <strong>of</strong> <strong>the</strong> product it delivers free-<strong>of</strong>-chargeto employers: recruitment, assessment <strong>and</strong> jobspecifictraining <strong>of</strong> potential employees; development<strong>and</strong> production <strong>of</strong> training materials; <strong>and</strong>provision or, in some cases, construction <strong>of</strong> trainingfacilities. AIDT does not, for example, provideeducational certifications unless <strong>the</strong> employer specificallyrequests such certification for trainees.AIDT represents a significant investment <strong>of</strong>state resources as part <strong>of</strong> Alabama’s comprehensiveindustrial recruitment incentives; <strong>the</strong> value toThyssenKrupp <strong>of</strong> training activities alone is set at $67million. 52 In <strong>the</strong> absence <strong>of</strong> any required assessment<strong>of</strong> AIDT’s impact on <strong>the</strong> workforce in general, it isimpossible to determine whe<strong>the</strong>r low-income <strong>working</strong>adults receive benefit from <strong>the</strong>se incentives. These28 Bridging <strong>the</strong> Gap
Enacted in 1995, <strong>the</strong> state’s corporate tax creditprovides a credit <strong>of</strong> up to 5 percent <strong>of</strong> <strong>the</strong> qualifyingindustry’s capital investment to be applied toward<strong>the</strong> industry’s state corporate income tax.recruitment efforts have brought a number <strong>of</strong> large,national <strong>and</strong> international companies to Alabama <strong>and</strong>created thous<strong>and</strong>s <strong>of</strong> well-paying jobs. Between 1996<strong>and</strong> 2006, notices <strong>of</strong> intent to qualify for corporateincome tax credits were file by 737 corporations, representing<strong>the</strong> creation <strong>of</strong> an estimated 84,000-plusjobs <strong>and</strong> an anticipated capital investment <strong>of</strong> almost$17 billion. 53 Alabama uses a mixture <strong>of</strong> “up-front”incentives (including property acquisition, site preparation,infrastructure development <strong>and</strong> job training),tax exemptions <strong>and</strong> tax credits to recruit prospectiveindustries to <strong>the</strong> state. Recent recruitment effortshave attracted considerable attention for <strong>the</strong>ir lavishup-front incentives – <strong>the</strong> state <strong>and</strong> local outlay for<strong>the</strong> ThyssenKrupp deal, for example, totaled $811million. 54 But it’s actually <strong>the</strong> capital investment taxcredits that <strong>of</strong>fer qualifying companies <strong>the</strong> largestadvantages over <strong>the</strong> long haul, making it possible torecover <strong>the</strong>ir full capital outlay.Enacted in 1995, <strong>the</strong> state’s corporate tax credit providesa credit <strong>of</strong> up to 5 percent <strong>of</strong> <strong>the</strong> qualifyingindustry’s capital investment to be applied toward<strong>the</strong> industry’s state corporate income tax. 55 The initiallegislation requires an average hourly wage <strong>of</strong>only $8 or an average total compensation <strong>of</strong> $10 anhour, including unspecified “benefits.” Employersinvolved in <strong>the</strong> direct food processing <strong>of</strong> agriculturalproducts, however, need not meet thisminimal st<strong>and</strong>ard. Such employers are requiredonly to provide a wage “subject to <strong>the</strong> local labormarket.” The credit is available for a period <strong>of</strong> upto 20 years. In 2001, <strong>the</strong> tax credit was amendedto reduce <strong>the</strong> thresholds for new employees <strong>and</strong>for capital costs for projects locating or exp<strong>and</strong>ingin a “favored geographic area.” The credit statutewas again amended in 2007 to provide additionalabatements <strong>and</strong> credits to companies investing atleast $2.5 billion in capital construction <strong>and</strong> creatingat least 2,000 jobs with unspecified “benefits.”The 2007 amendments extend to 30 years <strong>the</strong> timein which <strong>the</strong> qualifying industry may recover capitalcosts, continuing with <strong>the</strong> cap <strong>of</strong> no more than5 percent per year.A Red-Carpet WelcomeAlabama beat Louisiana in <strong>the</strong> battle for a $3.7 billion ThyssenKrupp (TK) steel plant in June 2007, but<strong>the</strong> victory was a costly one. TK will receive more than $811 million in upfront payments <strong>and</strong> tax breaksfrom state <strong>and</strong> local governments in exchange for building <strong>the</strong> steel plant, scheduled to open in nor<strong>the</strong>rnMobile County by 2010. About $461 million <strong>of</strong> those incentives will consist <strong>of</strong> upfront payments,including $314 million that will go to <strong>the</strong> company in cash, while $350 million will come in <strong>the</strong> form <strong>of</strong>tax breaks. To earn all <strong>of</strong> <strong>the</strong> incentives, <strong>the</strong> company will have to employ at least 2,000 people withinthree years after opening <strong>and</strong> <strong>the</strong>n continue to do so for two years <strong>the</strong>reafter. 1The enticements don’t stop <strong>the</strong>re. TK will benefit from a tax credit that, at an unknown cost, essentiallywill exempt <strong>the</strong> company from state corporate income taxes for 30 years. In addition, <strong>the</strong> StatePort Authority plans to spend $115 million on a Mobile Bay facility to make it easier to move steel fromoceangoing ships to barges. And Alabama’s agreement with TK contains a pledge that <strong>the</strong> state “shalluse its best efforts” ei<strong>the</strong>r to defeat any state legislation that would increase energy taxes or to seekan exemption for TK. 21 Jeff Amy <strong>and</strong> Dan Murtaugh, “Steel Mill Incentives Accord Signed,” (Mobile) Press-Register, June 7, 2007, http://blog.al.com/pr/2007/06/steel_mill_incentives_accord_s.html.2 Ibid.Alabama’s Working Families 29
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