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GA: New Jobs or Costly Boondoggle?

On the heels of plant closings by Ford and GM, Georgia Governor Sonny Perdue needed something to turn around his manufacturing jobs performance. That something ended up being $400 million in incentives to South Korean automaker Kia to build a plant in Georgia. The Kia plant is expected at best to create 2,500 jobs, less than half the number lost from the closing of the Ford and GM plants. And even at 2,500 jobs, the cost to the state is roughly $160,000 per job created. That's an awful lot of money to dump into incentives to attract a business. Of course, it seems other states may have been willing to offer even more. ABC News reports that Mississippi offered as much as $1 billion in incentives to attract the plant, roughly $400,000 per expected job created. The fact that Georgia won out is a testament to the extent to which tax policy is not the driving factor in firm location. With outsourcing abroad increasingly a possible option for firms, American companies looking to compete have to turn to quality as the determinant, not cost.