A detailed analysis of economic development budgets in three diverse states—Florida, Missouri, and New Mexico—finds that at least 68 percent of overall state economic development spending goes to large companies and programs that support those companies. Only a small fraction of state funds—typically about 19 percent—goes to small companies and programs that support their operations. The remaining 13 percent of state spending could not be classified as primarily benefiting large or small companies as program rules were open to companies of any size and programs lacked adequate transparency.
In other words, the economic development budgets of these states are dominated by assistance to large and better-established companies. Far fewer resources are committed to the creation or growth of smaller businesses, despite the fact that they are far more numerous–99.7 percent of all employers nationally have fewer than 500 employees and employ about half of the nation’s private workforce–are disproportionate job creators, and are in the greatest need of help, suffering a persistent credit crunch that is hampering U.S. economic growth.
Published By: Good Jobs First
Fostering sustainable communities in the United States — communities guided by principles of social justice and distinguished by healthy environments, strong local economies, and thriving cultures.