Intel shouldn't be only winner in deal. 80 percent jobs must go to Ohioans | Opinion
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Zach Schiller is the research director for Policy Matters Ohio. Prior to coming to Policy Matters in 2001, he worked for more than two decades researching and writing about the Ohio economy as a business reporter for The Plain Dealer and Business Week.
Intel Corporation’s $20 billion investment to build two new semiconductor plants here is welcome news that could create opportunities for Ohioans from all walks of life.
With the Mike DeWine administration promising Intel nearly $2 billion in cash, infrastructure, and tax credits, it’s also the largest economic development deal in state history.
A big share of that, including $600 million in cash, will require approval of the General Assembly, which OK’d the first $85 million in infrastructure spending for the Intel project April 6.
It’s critical that the legislature include measures in any future legislation that will maximize the benefits for all Ohioans. That includes expanding opportunity for those who are too often left out, and accountability measures if Intel doesn’t live up to its promises.
At least four-fifths of the Intel jobs should go to Ohioans.
In New Mexico, the corporation committed as part of a revenue bond supporting its investment that 60% of the people it hired would be state residents for at least one year. Ohio has a far bigger workforce than New Mexico, so it is reasonable to set a higher target of 80%.
The DeWine administration agreed to pay the bulk of the incentives upfront—betting that Intel will come through on its promises. It could very well do so, but it’s no certainty; Intel has fallen behind key competitors in semiconductor technology and is trying to catch up.
More: Intel hopes to save the chip industry, one competitor at a time
Tax incentives for corporate development deals don’t always pay off. For instance, General Motors had to repay the state after it shut its Lordstown plant and failed to make good on its job promises.
The Intel deal must have similar repayment requirements. They should include compliance with all laws and annual reports on key measures such full- and part-time jobs created and the demographics of its Ohio workforce.
Lydia Mihalik, director of the Ohio Department of Development, has cited possible clawbacks if Intel does not deliver. She also said that Intel would provide an annual report on the project and that there would be conversations with stakeholders. These steps are welcome, but more is needed.
More: Intel wants to add a new Licking County factory "every year or two," CEO says
To maximize community benefits from this huge public expenditure, policymakers should create a meaningful, robust process to include the public. This, at minimum, includes considering the deal’s effects on schools, housing, transportation, and the environment. Legislation should be crafted based on that input and include a specific program for monitoring impacts of the development.
Intel has pledged $50 million over 10 years to help Ohio colleges and universities develop curricula and the like; what will it do to support K-12 schools in the state?
More: Intel to invest combined $100 million in Ohio, U.S. for semiconductor education program
Intel should pay family-sustaining wages and benefits to all its workers. And to be sure that benefits reach those who have often been left out, Intel should make specific commitments to hire people of color in line with Columbus metropolitan area demographics and engage in targeted hiring of people from high-poverty census tracts in Ohio.
Additionally, respecting workers’ right to organize and collectively bargain would demonstrate a commitment to fair treatment on the job regardless of color or class.
The people of Ohio are giving up a great deal to back Intel. The subsidies will be drawn from resources that could be used to educate our young people, help recover from the pandemic and meet a host of other needs. It’s crucial that lawmakers ensure that the benefits of our deal with Intel extend far and wide.
Zach Schiller is the research director for Policy Matters Ohio. Prior to coming to Policy Matters in 2001, he worked for more than two decades researching and writing about the Ohio economy as a business reporter for The Plain Dealer and Business Week.
This article originally appeared on The Columbus Dispatch: Opinion: How does the Intel deal benefit the Columbus community?
