Democrats Make Better Job Creators

Iowa Row Crops

The contrast between Democratic and Republican approaches to the government’s role in job creation could not be clearer than with the Branstad administration’s recently announced deal with the Egyptian corporation Orascom. The company plans to build a fertilizer plant in Lee County. Touted as a “win-win,” the project will result in a $1.4 billion construction project and 165 permanent jobs, according to news sources.

The deal appears to be predicated on cheap natural gas, proximity to fertilizer users, and a package of tax incentives that according to Peter Fisher of the Iowa Policy Project, “amount to more than $650,000 for each permanent job.” CF Industries, Inc., Dow Chemical and Royal Dutch Shell are reported to be mulling similar projects, so Iowa is participating in a broader economic trend related to the explosion of natural gas supply in the United States due to hydraulic fracturing, and its intersection with agriculture.

The Orascom deal is done, it creates jobs, and it occurred on the Republican watch. However, is a tax incentive to a foreign corporation the best way to create Iowa jobs? Democrats have a different answer, one that favors Iowa businesses, and small businesses particularly.

Recently, the Solon City Council approved a $125,000 package of forgivable loans to a local company planning to open a restaurant and microbrewery on Main Street. One can debate how many jobs this will create, but management, a cook, a brew master, wait and kitchen staff, maintenance and accounting functions will all be part of the business. Perhaps five or six jobs and parts of others after the construction is finished and the business opens. For the money spent on each Orascom job, five or six small businesses could receive such a loan, multiplying the job creation many times per dollar spent over the Republican deal.

If one cares about job creation, supporting Main Street is more sensible than giving tax breaks to large, multinational corporations. There is the partisan difference, Democrats support Iowa businesses on Main Street, Republicans support tax breaks to large corporations.

Democrats support a strong Iowa economy by supporting a reduction in commercial property taxes for every Iowa business, focused on Main Street in small towns. We also support giving Iowans first bidding rights on government contracts, and buying American and Iowa made products where cost competitive. We support financial incentives for small businesses like the one in Solon.

This approach would do more for the Iowa economy than providing tax incentives to foreign corporations for a business relying on the economics of the questionable practice of hydraulic fracturing.

The Orascom fertilizer plant deal shows once again that while Republicans favor large corporations, Democrats favor doing business in Iowa with Iowans. It points out that Democrats make the better job creators.

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