~ AMERICA RECRUITS ACT will encourage companies to locate jobs here in the U.S. ~
Feb 09 2010
Contact: Kevin Hall (202-224-2023)
WASHINGTON, D.C. -- U.S. Senator Mark R. Warner (D-VA) today introduced legislation that provides an additional incentive to encourage overseas employers to create and locate jobs here in the United States. The America Recruits Act of 2010 allows the U.S. Department of Commerce to provide federal loan incentives of up to $10,000 for each new job created in the advanced manufacturing and information technology industries. It would be added to existing state, regional and local economic development incentives, and it would target those projects that would locate new jobs in the nation’s economically distressed regions where unemployment is the highest.
The estimated $40 million cost of this new federal job location incentive would be more than offset by local, state and federal tax revenues generated by the estimated 24,000 direct and indirect jobs created through the America Recruits Act.
“When I served as Virginia's Governor, I often found myself competing against governors of other states to put together incentive packages to try to create, relocate or preserve jobs in Virginia. But today our competitors increasingly are nations such as India, China and Korea – countries which have consistently proven that they are aggressively willing to provide generous national incentives to win the competition for these new jobs,” Senator Warner said. “The America Recruits Act provides one more tool for our state and local governments to add to their existing portfolios of incentives to help them ‘tip the balance’ in the global competition for where these companies will locate new jobs and investment.”
The America Recruits Act will help offset the cost advantage to employers of locating jobs overseas by providing a federal grant of $10,000 for every new U.S.-based job, payable over two years. Grants would be provided to state, regional and local economic development agencies, which would be required to provide at least a 25% match, increasing the total value of the program to at least $50 million. Employers would be required to certify that they located these new jobs in the United States from existing or potential overseas operations, and companies also would be required to maintain the U.S. jobs for at least two years. Employers who fail to meet that obligation will be required to repay the federal grants.
The economic activity and tax revenues that would result from the creation of these new jobs will more than offset the up-front cost of the America Recruits Act. For example, a new U.S. job paying approximately $50,000 per year typically results in nearly $6,000 in combined federal, state and local income and sales tax activity.
In addition, the job multiplier formula used by the U.S. Commerce Department’s Bureau of Economic Analysis demonstrates that every new manufacturing or IT job typically creates as many as five additional new jobs among local suppliers, vendors and service providers. An analysis from the Information Technology and Innovation Foundation demonstrates that the America Recruits Act could result in the creation of nearly 24,000 direct and indirect jobs here in the United States.
Senator Warner consulted with federal, state and local officials directly involved in economic development efforts while drafting the America Recruits Act. During visits to Virginia’s southern region, which has been hard-hit by job losses due to global changes in the textile and furniture industries, his proposal received broad support from local and regional officials who compete every day to attract new jobs and investment to the United States.
"Whether it be technology, manufacturing or any other industry, a job that pays a decent livable wage for our citizens is good for our families and good for our city," said Sherman Saunders, the Mayor of the City of Danville.
Danville’s economic development director, Jeremy Stratton, agreed: "We are not just competing against North Carolina, but also Poland and China. Senator Warner's proposal will give us one more advantage."
“I hope this proposal wins broad, bipartisan approval, because it gives us that much more buying power to be competitive with foreign countries in creating new jobs for our residents,” said Henry “Hank” Davis, Jr., chairman of the Pittsylvania County Board of Supervisors. “I think this is why we sent Senator Warner to Washington.”
From 2002 to 2006, Warner served as Governor of Virginia during a severe economic recession that swept across the entire nation. Close to 200,000 new jobs were created or preserved in Virginia during his four-year term, and when Warner left office in 2006, Virginia was widely and repeatedly recognized as the nation’s best-managed state [Pew Center on the States & Governing magazine] and the country’s best state for business [Forbes.com & CNBC].
“In today’s global economy, other countries have shown that they are willing to aggressively commit enormous financial resources to compete against the United States to attract these good-paying jobs in manufacturing and IT,” Senator Warner said. “We must step up to the plate by adding this modest new tool as one part of our nation’s overall economic development strategy. The America Recruits Act demonstrates that we are willing and able to compete, and ultimately win, in today's worldwide competition for good jobs.”
For more information on the America Recruits Act, click here: https://www.warner.senate.gov/public/index.cfm?p=americarecruitsact
# # #