Governments are giving billions in tax breaks to Apple, Amazon and other tech giants – MarketWatch

State and local governments are seeding the cloud with billions in tax subsidies, but the companies receiving those gifts aren’t exactly making it rain with jobs in return, according to a nonprofit’s recent study.The Good Jobs First study focused on tech giants Alphabet Inc. GOOGL, +0.00% GOOG, -0.07%  , Inc. AMZN, -0.67%  , Apple Inc. AAPL, +0.34%  , Facebook Inc. FB, -0.13%  and Microsoft Corp. MSFT, +0.76%  , and found roughly $2 billion in incentives granted from local and state governments to build a total of 11 data centers in the past decade, a fraction of the facilities these and other companies have actually built. Because these facilities, which provide remote computing power and data storage, require few workers, the subsidies resulted in those governments spending roughly $2 million per job created, the study found.“These numbers are orders of magnitude more than most deals we’ve seen,” said Greg LeRoy, executive director of Good Jobs First.As a comparison, estimates on the $1.3 billion in subsidies provided by Nevada to win Tesla Motors Inc.’s TSLA, -1.58%  Gigafactory suggest that the state is going to lose slightly less than $200,000 per worker, though LeRoy said employment numbers are still speculative there. Tesla’s battery-manufacturing site will certainly provide more jobs than a data center, which are warehouses full of computer equipment that are mostly controlled from afar while on-site jobs tend to be low-skilled positions such as janitors and security personnel.There is a massive wave of data-center projects planned globally to power the world’s expanding cloud needs, such as Amazon Web Services and Microsoft offering remote computing power to companies, and Apple and Facebook handling the needs of mobile users. Commercial real estate and investment firm JLL predicted in a 2016 study that the size of the data-center industry would double over the next five years.

Source: Why governments are giving billions in tax breaks to Apple, Amazon and other tech giants – MarketWatch

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