A CN Manufacturer came to a Poor AL County, Its Low Wages Dividing Locals

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Chico Harlan, A Grim Bargain; Once a weakness, low-skilled workers who get paid little have become the Deep South’s strength. Washington Post, Dec 5, 2015 (Sunday).
www.washingtonpost.com/sf/business/2015/12/01/a-grim-bargain/

Quote:

"a quarter-mile-long copper plant that would be owned and run by a Chinese company lured to the area with a massive package of state and local tax breaks. Five hundred people would have jobs * * * * in a county where 1 in 5 workers could not get a job.

"Two years later, [James] Deshler, 29 * * * [is] working at the copper plant at a wage nearly half of what he was expecting

"In wide swaths of the Deep South, public schools struggle, turning out workers who lack basic skills. Agricultural work has long faded, while job opportunities in once-prosperous industries such as textiles and timber have been lost to cheaper options in Latin America or automation at home.

"when opportunity arrives, it highlights a grim bargain: Jobs come at great cost [tax breaks] but offer only a slightly better version of a hard life. The region’s weaknesses — a low-skill workforce that doesn’t expect particularly high wages — become its competitive strengths.

"Golden Dragon Precise Copper Tube Group [Inc; state owned; 河南金龙精密铜管集团股份有限公司 (abbreviation: 金龙集团), whose US arm is GD Copper], which is based in Xinxiang 河南省新乡市, China, and is one of the world’s largest makers of coils for air conditioners, announced its arrival with blue and gold 'Now hiring' posters pinned across southwestern Alabama

"Wilcox County sits in the center of Alabama’s Black Belt, a swath of dark-soiled farmland that over the previous decades had been drained of its economic blood: first with the mechanization of agricultural jobs, then with an exodus of people, finally with the shuttering of factories and mills. * * * a county that is 70 percent black * * * Between 2000 and 2010, Wilcox lost 30 percent of its jobs and 25 percent of its businesses. Its unemployment rate went from 8.7 percent to 26.3 percent.  By the time Wilcox turned to China, the median household scraped by with $23,000 per year, according to Census Bureau data, an income level almost half of the state average and 15th lowest among the 3,144 US counties. * * * Wilcox had a rail line, but broad sections of the county lacked sewage, water, even cellphone service. There was no day-care center, no public transportation. The main town [the county seat], Camden, was a grid of treeless streets

"Golden Dragon — or GD Copper, as it would call the US-based arm — started looking for a place to build a factory in the United States after it was slapped with tariffs in 2010.  A US-based consultant, Raymond Cheng [Alabama-based 三叶集团 SoZo Group 总裁 郑礼明], who specializes in Chinese business opportunities, encouraged the company to solicit multiple bidders. * * *chairman of Golden Dragon, Li Changjie 李长杰

Alabama's proposal before it was chosen: "In Alabama, Golden Dragon wouldn’t pay taxes for 20 years; it would get free roads and land.  Alabama also did something no other state was willing to try: Its legislature passed the “Made in Alabama” act, a tailored law that allowed the state to reimburse Golden Dragon for several prior years of tariffs. A version of the law had first been drafted by Cheng and a lawyer, according to Cheng and a lawmaker who sponsored the bill. Ultimately, the company was given the choice of the reimbursements or an extra $20 million in cash. Golden Dragon chose the cash.  All told, according to interviews and documents reviewed by The Washington Post, Golden Dragon received subsidies worth some $200 million — the bulk of it in local and state tax abatements, plus the cash, $5 million in land and road costs and nearly $2 million in worker training.

"Deep South pioneered the practice and remain aggressive users of the tool, pitching not just tax breaks but low costs and anemic union participation. The strategy has both payoffs and potential downsides * * * [Alabama's Republican governor] says his state’s deals 'pay for themselves' within four years, by driving new jobs and new spending [which contribute to a stream of continuous income']. * * * [but critics charge that] the strategy amounts to a flawed attempt at a quick fix that surrenders a source of much-needed tax dollars that could be used for spending on education, health, and infrastructure. 'It’s a vicious cycle, because poorer states spend less on the things that would allow them to be less poor in the long run,' said Wesley Tharpe, a senior policy analyst at the left-leaning Georgia Budget and Policy Institute.

"Golden Dragon’s main allure has been its willingness to bring on people without experience, with nothing more than a high school diploma. Shortly after the plant began hiring, in early 2014, it became a landing spot for some of the region’s most needy. * * * [GD Copper]  said that roughly half of those who apply are rejected because of felonies or failed drug tests. * * * The average worker at Golden Dragon, among the 200 that have so far been hired, makes $13 per hour. The company says it offers generous and regular raises. Deshler started at $11 [in March 2014].

"Unlike the majority at Golden Dragon, Deshler had manufacturing experience. Straight out of high school in 2004, he [had] got a job at Hyundai in Montgomery. He started at $17 per hour and ended up at $25 five years later.

In summer 2014 Deshler was promoted and "now making $11.75 per hour. * * * Now Deshler wondered how any job at Golden Dragon could lead toward the middle class. * * * Even when Deshler’s salary finally climbed to $14.50 an hour earlier this year — the result of meeting performance goals — it didn’t cover a mortgage, insurance, light bills, baby food.  'Literally, going to Dairy Queen is a mini-vacation,' Deshler said. 'And if that’s a mini-vacation, what am I supposed to do if I have bald tires [google (bald tires) and you will see]?'

Note:
(a) Sunny South, Alabama is in Wilcox county whose (county’s) 2000 census had population of 11,670.  Wikipedia
(b) " 'When your hand is in the lion’s mouth, you act accordingly,' said John Moton Jr, the chairman of the county commission. 'We have the highest unemployment rate in the state. Our hand was in the lion’s mouth.' "

Bartlett Jere Whiting, Early American Proverbs and Proverbial Phrases. Harvard University Press 1977, at page 196
https://books.google.com/books?i ... hand+is+in+the+lion’s+mouth&source=bl&ots=1VqjWbeKdA&sig=q9GuFrqwyrZ922IZHlEyOpnNIHY&hl=en&sa=X&ved=0ahUKEwits4LareTJAhUKSSYKHR0BDg8Q6AEINjAE#v=onepage&q=hand%20is%20in%20the%20lion%E2%80%99s%20mouth&f=false
("'You hand is in the Lion's mouth, and you must get it out as easily as possible.' 1829 524: However, as my hand is in the 'lion's mouth,' I must get it out with as little damage as possible. Oxford 346; TW 177(14); Tilley H82")