EDITORIAL: Handouts to a few won’t diversify Nevada’s economy

Taxpayer giveaways are the “bread and circuses” of economic development.

This month, the Governor’s Office of Economic Development gave nine companies $12 million in tax abatements. It bragged that these companies will create 469 jobs by 2024. Six of the companies are in Southern Nevada. They are expected to create 336 jobs.

Jobs are vitally important, of course. Gainful employment provides dignity along with an income to support one’s family. Having a job gives one a chance to build skills, which usually leads to higher-paying jobs with more responsibility. When people work, they’re usually creating products or providing services that create value for other people. Providing things people desire is how companies turn a profit in a free market. Jobs create the tax revenue that funds education, police and roads. It’s hard to underestimate the significance of quality jobs.

Jobs are also much needed. At 7.3 percent, Nevada is tied with California for the highest unemployment rate in the country. Pre-pandemic, 1.54 million people had a job in Nevada. As of October, 1.44 million were employed. That means 100,000 fewer people are employed than in February 2020.

In that context, a few hundred jobs isn’t something to crow about. It’s a reminder of how inadequate government is compared with a vibrant private sector. That’s especially true, because taxpayers in GOED’s latest handout spree, provided an average subsidy of $25,000 per job.

That’s not a sustainable way to build the economy. But despite the rhetoric about jobs, that’s not the point.

The main utility of handouts such as these is political. Gov. Steve Sisolak gets to look like he’s taking action. He gets to claim credit for “creating” jobs and solving the state’s economic woes. Giving away taxpayer dollars is a way to enhance his political popularity. Few people will ever know if these jobs are actually created. Complete data won’t even be available until after the 2022 election.

It’s not just Gov. Sisolak. Former Gov. Brian Sandoval created GOED during his first term. He said it would help diversify Nevada’s economy. Gov. Sisolak’s lockdowns exposed just how dependent Southern Nevada remains on tourism despite Gov. Sandoval’s efforts and numerous tax giveaways — some to large wealthy corporations — funded by taxpayers.

Handouts like these remain a distraction tactic, similar to how Roman emperors tried to appease the masses with food and entertainment. It would be much effective to provide a hospitable business climate for all than to pass out tax breaks to the favored few.

But then entrepreneurs, not politicians, would get the credit. No wonder so many politicians prefer giving away other people’s money.