Want to know the problem with enterprise zones? Then check out Sunday’s Riverside Press Enterprise, one of the best midsized newspapers in California.
A story in it covers Governor Jerry Brown’s successful campaign to have the legislature put enterprise zones out of their misery. (Brown recently signed the bill abolishing the zones.) Conceived by the late Jack Kemp and other unusually well-meaning right-wingers to bring jobs to the inner-city, enterprise zones have provided subsidies to businesses for creating jobs they might have created in any case. Disproportionately, the jobs created were low-paying.
Also at Brown’s prompting, the legislature replaced enterprise zones with a better-targeted subsidy. Under the new law, businesses in high-unemployment and high-poverty areas will be eligible for tax credits that come to 35 percent of a new hire’s wages—provided those wages are between $12 and $35 an hour.
This drew a wondrous complain from Colin Strong, the head of the San Bernardino Chamber of Commerce. In the several decades that the San Bernardino Enterprise Zone was in existence, he told the Press Enterprise, it helped subsidize roughly 10,000 jobs. Had the new wage criteria been in effect during that time, Strong added, that number would have dropped to 350.
In other words, just 3.5 percent of the enterprise-zone jobs paid more than a poverty wage. People who wonder how San Bernardino fell into receivership may want to ponder this. Californians’ tax dollars subsidized poverty so pervasive that San Bernardino is now in bankruptcy court—just in case you were wondering what the problem is with enterprise zones.
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