Register is right to question Iowa data centers

The Des Moines Register is questioning tax and other incentives given to major technology companies relocating in Iowa, including Facebook, Google, Microsoft and now Apple.

Reporter Kevin Hardy’s article,  “Will Iowa’s giant data centers spur growth in technology jobs here?,” recounts how Iowa has “attracted billions in new data center investments over the last decade, most recently with Apple’s announcement of a $1.4 billion data center planned for Waukee.”

Unlike other media that simply recount corporate relocations with a theme of job creation, the Register looked more closely at the situation. This stands in contrast to some newspapers in Wisconsin that merely recited the Trump administration’s announcement of Foxconn opening a $10 billion facility in that state.

See my post, “FOXCONN IN WISCONSIN, TRUMP? Say Hi to C-3PO!,” noting how that company fired 60,000 Chinese workers, replacing them with robots.

Interpersonal Divide in the Age of the Machine covered the Foxconn firing in depth, noting robots don’t need health care. “What they do, primarily, is replace workers, degrade existing jobs, lower wages and reduce incomes (and hence taxes), leading to budget shortfalls in the name of corporate profit.”

As far as tech companies and data centers go, Interpersonal Divide cites an article titled “Four fundamentals of workplace automation,” published in the senior management journal, McKinsey Quarterly:

“As digital technologies automate many of the tasks that humans are paid to do, the day-to-day nature of work will change in a majority of occupations. Companies will redefine many roles and business processes, affecting workers of all skill levels. Historical job-displacement rates could accelerate sharply over the next decade.”

The Register was right on the money, or lack thereof for Iowa taxpayers, in stating:

“Data centers deliver big capital investments and fuel short-term employment in construction. But once online, the highly automated operations don’t require masses of workers. That dynamic has put renewed scrutiny on Iowa’s economic development practices, as tech giants continue to reap millions in taxpayer incentives to build here.”

Lawmakers in Iowa and elsewhere should read the Register article and hold tech companies accountable by reviewing incentives and carefully measuring the benefit to Iowa taxpayers. When we give tax breaks to companies that employ more machines than people, we are adding to the burden of ordinary citizens, including ones in the future who will be replaced by automation.

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