Sunday, February 20, 2011

Job Creation in Arizona

Job Creation in Arizona
Intel will be investing $5 billion in a new fab plant in Chandler.
When the facility opens in 2013, about 1,000 people will be needed to run an operation that Intel executives suggest will be the most advanced high-volume semiconductor-manufacturing facility in the world
Notice that the investment required for each job is $5 million. That's really capital intensive.
Intel will build the plant here for a couple of reasons. It's in a free trade zone so they won't have to pay property taxes on the investment. Second, the state changed the way it taxed capital intensive export businesses in 2005. That reduces Intel's state income taxes. I suspect that without those two tax breaks, Intel would have taken their investment (and the 1,000 jobs) elsewhere.
In the short run,
The Greater Phoenix Economic Council estimates that Fab 42 will create 14,000 temporary jobs, including spinoff jobs created by construction activity.

Just as an aside, since I work in higher education, nowhere in the article is there any mention of an expectation or need for a highly educated workforce.

Update: From the story in the EV Tribune:

Intel chose Chandler because of the quality of schools and universities, as well as its experience in the city, said John Pemberton, manager of the facility. While Intel supports a package of tax cuts that Gov. Jan Brewer signed into law Friday, Pemberton said existing economic incentives - and not any new action by the state - led to the company picking Chandler.



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