Reports Coming in of Big IBM Layoffs Underway in the U.S.

Re:Reports Coming in of Big IBM Layoffs Underway in the U.S. by rtpg on Friday March 04, 2016 @01:00AM (#11222294)

This might be a case of (X-50 Million) (X being the taxes on 1000 jobs) is bigger than 0 (amount of taxes collected on non-existent IBM office)

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Re:Reports Coming in of Big IBM Layoffs Underway in the U.S. by mathattack on Friday March 04, 2016 @08:35AM (#11223573)

Let's do some math from a source [0]

Sounds like 1300 jobs paying 46K, double the local average, over the course of 6 years.

From a "paying taxes to buy higher salaries" point of view this is 1300 * (0.5 * 46K) * 6 ~= $180M. Sounds like a positive NPV transaction. But... How much of the increase does the city and state actually capture in Taxes? Let's call it 15% between city, state, local and sales. (This is very fuzzy math) Then you get 180M * 0.15 ~= 27M.

In the end it sounds like the city and state of Dubuque did a wealth transfer from taxpayers to a subset of local employees, many of whom are now jobless and will need to go back to $23K jobs or move.

These types of arrangements frequently end poorly. If the local market won't bear a certain wage rate, it's hard for one-off tax rebates to fix things. You need to go deeper - change the entire tax regime, improve the education system, etc.

Cringely [1] opines on this too.

[0] http://www.bloomberg.com/news/articles/2015-05-19/iowa-spent...

[1] http://www.cringely.com/2012/04/18/somethings-rotten-in-dubu...

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Re:Reports Coming in of Big IBM Layoffs Underway in the U.S. by TulliusCicero on Friday March 04, 2016 @03:41AM (#11222687)

But you're not factoring in the cost of the services for that office and the people who work there.

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