Thursday, March 21, 2013

More Business Flight

MetLife has recently announced it plans to move 2,600 jobs to North Carolina. The company has not yet announced how many jobs will be lost in Bloomfield, but it has announced that it will close its offices in Lowell, Mass., Somerset, N.J., and Aliso Viejo, Calif. It will reduce its workforce in Bloomfield, Boston, Irvine, Calif., Johnstown, Pa., and Warwick, R.I. What’s it all mean? A company spokesman has said that MetLife is trying to save money by consolidating operations.
Why North Carolina rather than, say, Bridgeport Connecticut?

Someone at MetLife knows how to add and subtract. According to a recent report, Bridgeport Connecticut is the highest taxed city in the country, another “first’ for a state that is third highest in its tax burden. South Carolina’s tax structure places it as number 10 among states with the lowest tax burden. Connecticut residents pay 12.3% of their income in taxes compared with 8.4% in South Carolina. One must assume that the bean counters have done their work and concluded that it would be more profitable to move operations to South Carolina.

While it may be possible possible that the governor of South Carolina made the company an offer it could not refuse, the more important consideration is: Why isn’t the Northeast able to meet offers made in the South?

The cost of labor is higher in the Northeast, and the governing ethic in the South, far less aggressive, is more amenable to the entrepreneurial spirit.  Under the progressive administration of Governor Dannel Malloy and a Democratic dominated General Assembly, Connecticut only recently instituted the largest tax increase in state history, and the state still can’t balance its books. Mr. Malloy apparently thought he was in competition with New Jersey Governor Chris Christie; so long as he maintained lower governmental costs than Mr. Christie, Connecticut would not lose jobs in the region. Now South Carolina is poaching Connecticut businesses. What a surprise? 
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