Written by Matt Murray and Liz Iacobucci
Did you happen to read AFP’s claims about Sturm Ruger’s expected new facility in North Carolina? Those hypotheticals about whether or not Ruger’s siting decision was motivated by North Carolina’s Right To Work (for less) law?
Anyone who didn’t check the facts might actually believe it.
First thing to be clear on: Sturm Ruger hasn’t actually made a final decision to open the North Carolina plant. Here’s the actual, latest word:
The deal still hinges on final approval of an unknown amount of state and local incentives.
Want to know what those “incentives” probably include? North Carolina state law gives huge tax breaks to corporations who locate there. “The State perpetuates its practice of meddling with the State’s economy to the detriment of free market principles and the robustness that brings.” Some of those state-level incentives include:
- a $12,500 tax credit for each job that is created;
- a 30% tax credit for investing in real property; and
- an additional 7% tax credit for investing in business property (such as manufacturing equipment and plant furnishings).
Add them up, and you get somewhere between $8.5 million and $17.25 million in state money (depending on whether you use Ruger’s estimate of new 500 jobs or AFP’s estimate of 1,200 jobs).
And that’s just the state-level incentives. But wait, there’s more! In North Carolina, “Rockingham County and the local municipalities review each new business location individually in order to offer a generous location assistance package.”
So, who knows how much Ruger might get paid to open a facility in North Carolina? In last week’s conference call with industry analysts, the corporation did not disclose the total amount – just that “the deal hinges on final approval”. (Not a single mention about Right to Work, by the way.)
And Ruger couldn’t expand their operations here, anyway – because there aren’t any buildings around that are big enough. “At the moment, Claremont does not have an available building of 250,000 square feet, said Nancy Merrill, the city’s economic development coordinator. “We have a couple of buildings of about half that, like the Lowe’s building, which is about 130,000 square feet.” (Back in May, Ruger’s CEO Michael Fifer told shareholders that “the company is looking for an existing 250,000-square-foot building, and Fifer said he hopes Texas Gov. Rick Perry will give it to him.”)
Again, that’s not in any way related to North Carolina’s Right to Work law. If you happen to be checking facts, rather than swallowing AFP’s spinning lure.
What sort of jobs are we talking about, anyway? Let’s look at the Ruger jobs that are already here in New Hampshire. There are a bunch of jobs available, mostly paying between $10.00/hr and $13.50/hr. (Maybe AFP Honorary Chairman Tom Thomson can pass the word along to all the Upper Valley people his op-ed says “would love to have an opportunity to have a high-skill, high-paying job that a manufacturer like Sturm, Ruger would” provide. Thomson could tell them: Ruger has job openings: right here, right now.)
Ruger’s jobs simply don’t pay enough to keep a family afloat here in New Hampshire. To pay for a two-bedroom apartment, and keep housing costs below 30% of their income, workers in New Hampshire need to be paid $20.47/hour. That’s a lot less than what they’re offering.
In North Carolina, housing costs are a lot cheaper. In North Carolina, workers need to be paid only $14.17/hour in order to be able to afford a two-bedroom apartment.
But yes, that’s still more than what Ruger is offering, if you’re checking facts about those jobs that AFP describes as “high paying”.
Ruger can’t fill the jobs that it already has, here in New Hampshire. So why did Saturday’s Union Leader op-ed try to make this situation all about Right to Work?
Straight from Ruger’s Annual Report:
“As of February 1, 2013, the Company employed approximately 1,460 full-time employees of which approximately 38% had at least ten years of service with the Company. The Company uses temporary employees to supplement its workforce. As of February 1, 2013, there were approximately 580 temporary employees. None of the Company’s employees are subject to a collective bargaining agreement.”
Did you do the math? More than one-quarter of their workforce is made up of temporary employees.
And Ruger isn’t even a union company – so why on earth would they care what restrictions state law places on companies’ negotiations with unions?
Think about it for a minute. In reality, that’s what a Right to Work law is: a government restriction on how a company can do business. Would Ruger really base its siting decision on the fact that North Carolina prohibits the corporation from doing something that New Hampshire allows?
No, this siting decision – which still hasn’t been finalized – is all about money.
Maybe Gov. Perry didn’t give them a building. But North Carolina is going to give them $12,500 per job they create – plus an undisclosed amount of other incentives.
So maybe, at one level, this is a good example of the Right to Work dynamic. Right to Work states tend to bid against each other for the honor of acquiring lower-paying, non-unionized jobs that often don’t have health insurance or pension benefits. (Back in the 1990s, the Federal Reserve Bank advised that Congress should prohibit these kinds of bidding wars.)
Is this really the future that we want for New Hampshire? Do we really want New Hampshire to follow North Carolina’s lead? To be paying corporations $12,500+ per job, even for jobs that won’t support a family?
Why does the Union Leader think this is a good idea?