Activist Ralph Nader has written an open letter to Apple CEO Tim Cook urging the company to refuse the nearly $30 million in Texan taxpayer money already pledged to lure the company to build a $304 million campus in Austin.The money is nothing compared to Apple's enormous profits, Nader says, but would mean a lot to Texas public schools. Nader writes:
Already Texas public schools have laid off 32,000 workers, including 12,000 teachers. Another round of $2 billion in funding cuts from the state government is coming this September. Who needs $21 million (plus another $14.5 million) more: the bulging corporate treasury of Apple or the school children of Texas?
If Nader wanted to convince more people -- and surely that's the point, since he released the letter to Cook -- he should have let go of some of the standard lefty phrases that distract from his argument, like "corporate welfare," "capitalists," and references to the company's Chinese laborers. But does he have a point?
The money promised to Apple includes $21 million from the Texas Enterprise Fund and $8.6 million more from the city of Austin. Travis County wants to give $7.6 million on top of that. Travis County's tax breaks -- 80 percent off its tax bill -- would be offered on the condition that Apple hire "economically disadvantaged" locals, the Austin American-Statesman explains. That would include people who "went through a targeted job training or live in a poor area pegged for development." But one of the reasons people in poor areas have trouble getting sweet high-skilled jobs is that they go to mediocre or bad public schools. It's been widely reported that some companies have struggled to find high-skilled Americans to fill empty positions. It seems it would be difficult to hire local people who can do the work -- Apple's average salary will be 20 percent higher than the local average -- if the county doesn't have good public schools.
On top of that, those jobs aren't necessarily guaranteed. The Texas Enterprise Fund, Gov. Rick Perry's fund specifically created in 2003 to lure businesses, has had only mixed success, bringing in just a third of the jobs it promised after giving $440 million in taxpayer funds to private businesses. In 2011, Texans for Public Justice found that in 2010, companies who'd gotten those grants had created 22,349 jobs, just 37 percent of the 59,100 jobs promised.
On the other hand, these tax breaks are how cities compete for investment from new companies. At late as mid-March, it was still possible Apple could move to Phoenix instead, Bloomberg BusinessWeek reported. If Texas doesn't offer the tax breaks, someone else will.
Apple's deal with Texas by the numbers:
Money Texas will give to Apple: $21 million over 10 years.
Money Austin will give Apple: $8.6 million over 10 years.
Money Travis County wants to give Apple: $7.4 million over the next 15 years.
Money Austin thinks it will get back: $23.3 million over 14 years.
Jobs Apple will add in the area: 3,600.
Average wage of those jobs: $63,950 a year.
Price of Austin campus: $304 million.
Apple's value: Market capitalization is about $546 billion.
Most surprising revelation: Nader is an Apple shareholder.