query: when is business bluffing

[colist-admin at comm-org.utoledo.edu]

[ed:  thanks to  John and Rich for the interesting responses to Peter's query.]

From: "John M. Beam" <beam1 at ix.netcom.com>

ACORN's D.C. office houses a living wage resource center which has an
overview on most of the living wage campaigns that have been done in the
past few years or are in progress. Tel: 202-547-2500.

As a resident of New York City, where businesses threaten to leave even
when they haven't been confronted with an affirmative, progressive
policy, I think it's worth considering another question:  When a
corporation extracts a bribe (incentive, tax abatement, economic
development subsidy) from a locality in exchange for staying put, how
often does the firm eventually leave anyway?  In an economic culture
where the short term bottom line is increasingly the only decision
making criterion, can a local jurisdiction offer enough to correct for
(supposedly) free market pressures?  E.g., Chase Bank, which has been
the recipient of mind boggling retention packages in the past -- which
did indeed "save" thousands of jobs at least temporarily -- is moving
something like 3,500 jobs across the Hudson to Jersey City because the
commercial real estate in Manhattan runs three times what they will pay
to lease made to order space in NJ.

The flip side of this question for Peter's discussion is: Is there any
policy we are realistically likely to win that could change the
fundamental economic dynamic facing a business that it will be any more
than an excuse for doing what the market was going to force it do
anyway?  Strategically, I think the long term "living wage agenda" has
to move beyond just making sub livable wage jobs into livable wage jobs
by fiat -- which I support -- to local/state/national economic policy
that provides educational and economic development infrastructure to
generate jobs that pay living wages to begin with.

John M. Beam
Pumphouse Projects

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From: Rich Keiser <rkeiser at carleton.edu>

Peter:

This is a great topic, one I focus on in my urban political economy 
classes.  A few texts with good examples:

Todd Swanstrom, The Crisis of Growth Politics, discusses business bluffing 
and the complicity of the local media in facilitating the view that a city 
that attempts to call the bluff will be labeled a bad business environment.

Rich DeLeon in Left Coast City addresses how the formation of a progressive 
coalition can help overcome collective action problems that leave citizens 
who believe that business is bluffing disunited.  A particularly important 
tool, in my view, that DeLeon does not emphasize enough for many students 
to grasp is the referendum. Losses in referenda still show the losers how 
many people do believe that business is bluffing and help build a movement 
that can overcome collective action issues.  Victories in referenda call 
the bluff.  Effective as well, according to DeLeon, is the hiring of 
consultants who can offer financial analyses that dispute the analyses that 
the big accounting firms routinely do for major real estate investors, 
sports teams, and mobile capital in general.

The sports stadia literature has a few good cases of calling the bluff of 
capital (as well as capital making good on its threat and bringing a city 
to its knees years later).  Referenda commonly play a role in these 
victories as well.  Noll and Zimbalist's Sports, Jobs and Taxes is a good 
start.

*****************
Richard A. Keiser
Associate Professor of Political Science
Carleton College
Northfield, MN   55057

507-646-4122 (office)
507-646-5615 (fax)