5 ms·

> It’s a blow to Dubuque and Columbia, cities that spent a combined $84 million on tax breaks and other incentives to lure Big Blue in the hopes of attracting o

by wtbob 11y ago

> It’s a blow to Dubuque and Columbia, cities that spent a combined $84 million on tax breaks and other incentives to lure Big Blue in the hopes of attracting other technology firms and incubating a startup scene. Anyone who would pursue IBM in hopes of 'incubating a startup scene' is, not to put too fine a point on it, grossly incompetent. > Instead, Ross found herself toiling on what she described as a new-age assembly line — each employee solving a narrowly focused part of a corporate customer’s technical problem and then passing the baton to the next person. As a result, said some of IBM’s Dubuque workers, they became experts only in a narrow set of skills that weren’t easily transferable. That's exactly IBM's MO: try to solve problems with a smart process executed by low-skilled people. Never mind that a process can never execute judgement, and that low-skilled people executing a process never get the experience needed to develop their own judgement. Never mind that deep knowledge is necessary to solve complex problems. From IBM's perspective, it's good to have low-skilled people who can't easily find jobs elsewhere: it means lower wages and less turnover (and when there is turnover, imparting a few low skills to new hires is easy!). Never mind that if other places wouldn't want to hire them, then one probably doesn't have a reason to hire them either. Never mind that if one's company is composed of low-skilled employees, then customers don't have much reason to use one's services.

fennecfoxen 11y ago
> Anyone who would pursue IBM in hopes of 'incubating a startup scene' is, not to put too fine a point on it, grossly incompetent. Indeed -- and just one of the most painfully obvious illustrations of why the "high taxes with favored big companies getting tax breaks" strategy is a lot less fair and efficient than the "medium-low taxes for everybody" strategy. (Of course, the latter doesn't give the politicians any chances to dole out favors and toot his own horn for getting his constituents jobs!!!, so expect ongoing cronyism well into the future. why capitalism gets a bad name...)
- scarmig 11y ago
  There's a multitude of interpretations there, but to me the obvious(TM) takeaway is that corporate taxes should be zeroed out for everyone, and income/consumption/environmental taxes (take your pick of weighting) increased to make up for it.
  - deleted 11y ago
    [deleted]
  - jtbigwoo 11y ago
    >>corporate taxes should be zeroed out for everyone I'm probably stepping into a pre-existing argument, but forming a corporation allows me to gain benefits that would be difficult or impossible to obtain as an ordinary person. (e.g. limited liability, special tax treatment) It's not unreasonable that a corporation's owners pay additional taxes.
  - s73v3r 11y ago
    The company fucked over the communities is received tax breaks from, so they should be rewarded with simply not having to pay taxes at all? What kind of backwards ass thinking is that? If I don't pay my taxes next year, can I get the same deal?
    - fennecfoxen 11y ago
      > The company fucked over the communities is received tax breaks from, so they should be rewarded with simply not having to pay taxes at all? More like: "the politicians responsible for setting tax policy routinely end up abusing small companies with high taxes while rewarding big companies with low taxes and claims of Jobs Jobs Jobs (re-elect me!). the jobs are frequently a lie so mostly the big companies just get unfair advantages. this is manifestly unfair to small companies and to communities. maybe politicians shouldn't tax corporate activity at all -- besides the problems mentioned already it reduces incentives to invest and to have jobs in a location -- and we should get our taxes from economic activity once the money's left the corporation, like the executives' property, or a sales tax that penalizes excessive consumption, or carbon taxes -- which might also help the environment! and then maybe we should charge companies fees for the services that they use instead of general-fund spending so that companies have a harder time offloading costs onto the jurisdictions where they're hosted." This is a fairly common economically-conservative public-policy position. It can be debated as desirable or undesirable, but!!! it is consistent and coherent and does attempt to achieve equity under the law. It's probably hardest to implement in a place like the US where there are multiple jurisdictions involved and the revenue from a sales tax or property tax could end up far away from the communities where the corporations impose costs (though the fee-for-services model does mitigate that).
- pacaro 11y ago
  The city should just embrace sunk costs, I mean, double down, and invest in helping the laid off workers create a startup scene. That at least has a hope in hell of achieving something
  - acveilleux 11y ago
    Most of the people in that IBM operation were probably help desk or equivalent. There's not the base skills to create a startup there. If they had the skills, they'd have moved, not taken a 46k/yr (mean) jobs from IBM. That's the recurring story with just about any small rural place. You need a critical mass to get going and it's just not available locally. Maybe given a large university with a strong tech program you can jumpstart that but Dubuque has got only small liberal arts university run by churches... I say this as someone living half the time in a rural place (PEI)... I work remotely for a Montreal company however when I'm there.
    - pacaro 11y ago
      I hear you, and I probably agree, but the entrepreneurial spirit can be found in the most unlikely of places, and whatever the je ne sais quoi is that makes a great founder might well be as common among "help desk or equivalent". Many people with great skills are in unlikely places because other factors in their lives are reducing their choices. I worked for a bootstrapped startup in rural England that made a successful exit (acquisition by Microsoft), you never know.
      - acveilleux 11y ago
        Unicorns will happen. My partner is working with a PEI-based startup (spun off from local Uni) that has a good many clients, a well established niche and probably more programmers working for them then any other company on the island that isn't a body shop. Doesn't stop them from being special snowflakes rather than a thriving ecosystem. Contrast with a place like NYC or SF where there's funding, support, mentoring available and a wide pool for hiring. In PEI, the second biggest challenge after finding someone is retaining them lest they leave the island to make 50-70% more in TO.
clord 11y ago
> Anyone who would pursue IBM in hopes of 'incubating a startup scene' is, not to put too fine a point on it, grossly incompetent Could be they are geniuses: banking on IBM laying off tech workers in order to get the startup scene going in the wake. Scratch that. Having seen some of these legislative bodies at work, that's too advanced.
A_COMPUTER 11y ago
They were trying to create a tech ecosystem, of which IBM and startups would be parts of. Not creating startups from luring IBM. But yes, this was totally predictable.
marpstar 11y ago
Dubuquer here. This was totally the City of Dubuque's attempt to grow (establish?) a tech scene. Dubuque doesn't have enough computer science graduates to support it. I'm at the biggest "software" company in the city, and we can't find quality talent within an hour commute. As others in the thread have stated, this place was a glorified call center. No research or development going on. I have friends who still work there, and I've watched their careers completely stagnate. In Dubuque, IBM was where you went when you couldn't get a tech job elsewhere in the city. Not anymore. The article says that the average pay at IBM was $46,000 but I don't know anyone who actually made that much. IBM said they'd bring 1300 jobs, but they barely cracked 1000. Anyone who thinks they'll still be here in 10 years is kidding themselves.
- beambot 11y ago
  > I'm at the biggest "software" company in the city, and we can't find quality talent... > the average pay at IBM was $46,000 I think I can solve your talent problem, and I won't even charge you for the insight: Pay more. Presumably you're in a high-margin (software!) industry. If revenues are reasonable, then you can afford to pay higher salaries. Given the untethered lifestyle of younger generations, you're effectively competing with the entire nation. Even SFBA, with its absurd cost of living, offers a better pay-to-living situation than $46k in Iowa. But there's good news! With housing in Mountain View at all time highs (yes, a 2 bdrm home runs ~$800k)... there's lots of good software engineers who spend a few years here and then look to the MidWest. The classic relocations are to Austin TX and Boulder CO. Pay up, and you might have an easier time recruiting people heading back to the MidWest. (BTW: I'm from Nebraska.)
  - meatysnapper 11y ago
    Exactly! There is not an engineering talent shortage- if you paid as much as medicine, you'd get plenty.
    - Yhippa 11y ago
      "Engineering talent shortage for cheap developers who have high skill levels"

by wtbob 11y ago

fennecfoxen 11y ago

> Anyone who would pursue IBM in hopes of 'incubating a startup scene' is, not to put too fine a point on it, grossly incompetent. Indeed -- and just one of the most painfully obvious illustrations of why the "high taxes with favored big companies getting tax breaks" strategy is a lot less fair and efficient than the "medium-low taxes for everybody" strategy. (Of course, the latter doesn't give the politicians any chances to dole out favors and toot his own horn for getting his constituents jobs!!!, so expect ongoing cronyism well into the future. why capitalism gets a bad name...)

scarmig 11y ago
There's a multitude of interpretations there, but to me the obvious(TM) takeaway is that corporate taxes should be zeroed out for everyone, and income/consumption/environmental taxes (take your pick of weighting) increased to make up for it.
- deleted 11y ago
  [deleted]
- jtbigwoo 11y ago
  >>corporate taxes should be zeroed out for everyone I'm probably stepping into a pre-existing argument, but forming a corporation allows me to gain benefits that would be difficult or impossible to obtain as an ordinary person. (e.g. limited liability, special tax treatment) It's not unreasonable that a corporation's owners pay additional taxes.
- s73v3r 11y ago
  The company fucked over the communities is received tax breaks from, so they should be rewarded with simply not having to pay taxes at all? What kind of backwards ass thinking is that? If I don't pay my taxes next year, can I get the same deal?
  - fennecfoxen 11y ago
    > The company fucked over the communities is received tax breaks from, so they should be rewarded with simply not having to pay taxes at all? More like: "the politicians responsible for setting tax policy routinely end up abusing small companies with high taxes while rewarding big companies with low taxes and claims of Jobs Jobs Jobs (re-elect me!). the jobs are frequently a lie so mostly the big companies just get unfair advantages. this is manifestly unfair to small companies and to communities. maybe politicians shouldn't tax corporate activity at all -- besides the problems mentioned already it reduces incentives to invest and to have jobs in a location -- and we should get our taxes from economic activity once the money's left the corporation, like the executives' property, or a sales tax that penalizes excessive consumption, or carbon taxes -- which might also help the environment! and then maybe we should charge companies fees for the services that they use instead of general-fund spending so that companies have a harder time offloading costs onto the jurisdictions where they're hosted." This is a fairly common economically-conservative public-policy position. It can be debated as desirable or undesirable, but!!! it is consistent and coherent and does attempt to achieve equity under the law. It's probably hardest to implement in a place like the US where there are multiple jurisdictions involved and the revenue from a sales tax or property tax could end up far away from the communities where the corporations impose costs (though the fee-for-services model does mitigate that).
pacaro 11y ago
The city should just embrace sunk costs, I mean, double down, and invest in helping the laid off workers create a startup scene. That at least has a hope in hell of achieving something
- acveilleux 11y ago
  Most of the people in that IBM operation were probably help desk or equivalent. There's not the base skills to create a startup there. If they had the skills, they'd have moved, not taken a 46k/yr (mean) jobs from IBM. That's the recurring story with just about any small rural place. You need a critical mass to get going and it's just not available locally. Maybe given a large university with a strong tech program you can jumpstart that but Dubuque has got only small liberal arts university run by churches... I say this as someone living half the time in a rural place (PEI)... I work remotely for a Montreal company however when I'm there.
  - pacaro 11y ago
    I hear you, and I probably agree, but the entrepreneurial spirit can be found in the most unlikely of places, and whatever the je ne sais quoi is that makes a great founder might well be as common among "help desk or equivalent". Many people with great skills are in unlikely places because other factors in their lives are reducing their choices. I worked for a bootstrapped startup in rural England that made a successful exit (acquisition by Microsoft), you never know.
    - acveilleux 11y ago
      Unicorns will happen. My partner is working with a PEI-based startup (spun off from local Uni) that has a good many clients, a well established niche and probably more programmers working for them then any other company on the island that isn't a body shop. Doesn't stop them from being special snowflakes rather than a thriving ecosystem. Contrast with a place like NYC or SF where there's funding, support, mentoring available and a wide pool for hiring. In PEI, the second biggest challenge after finding someone is retaining them lest they leave the island to make 50-70% more in TO.

clord 11y ago

> Anyone who would pursue IBM in hopes of 'incubating a startup scene' is, not to put too fine a point on it, grossly incompetent Could be they are geniuses: banking on IBM laying off tech workers in order to get the startup scene going in the wake. Scratch that. Having seen some of these legislative bodies at work, that's too advanced.

A_COMPUTER 11y ago

They were trying to create a tech ecosystem, of which IBM and startups would be parts of. Not creating startups from luring IBM. But yes, this was totally predictable.

marpstar 11y ago

Dubuquer here. This was totally the City of Dubuque's attempt to grow (establish?) a tech scene. Dubuque doesn't have enough computer science graduates to support it. I'm at the biggest "software" company in the city, and we can't find quality talent within an hour commute. As others in the thread have stated, this place was a glorified call center. No research or development going on. I have friends who still work there, and I've watched their careers completely stagnate. In Dubuque, IBM was where you went when you couldn't get a tech job elsewhere in the city. Not anymore. The article says that the average pay at IBM was $46,000 but I don't know anyone who actually made that much. IBM said they'd bring 1300 jobs, but they barely cracked 1000. Anyone who thinks they'll still be here in 10 years is kidding themselves.

beambot 11y ago
> I'm at the biggest "software" company in the city, and we can't find quality talent... > the average pay at IBM was $46,000 I think I can solve your talent problem, and I won't even charge you for the insight: Pay more. Presumably you're in a high-margin (software!) industry. If revenues are reasonable, then you can afford to pay higher salaries. Given the untethered lifestyle of younger generations, you're effectively competing with the entire nation. Even SFBA, with its absurd cost of living, offers a better pay-to-living situation than $46k in Iowa. But there's good news! With housing in Mountain View at all time highs (yes, a 2 bdrm home runs ~$800k)... there's lots of good software engineers who spend a few years here and then look to the MidWest. The classic relocations are to Austin TX and Boulder CO. Pay up, and you might have an easier time recruiting people heading back to the MidWest. (BTW: I'm from Nebraska.)
- meatysnapper 11y ago
  Exactly! There is not an engineering talent shortage- if you paid as much as medicine, you'd get plenty.
  - Yhippa 11y ago
    "Engineering talent shortage for cheap developers who have high skill levels"