Harley Davidson and the Problem with Corporate Welfare

Harley Davidson’s announcement that they may shut down their plant in York illustrates the problem with taxpayer funded corporate welfare.

For starters, Harley Davidson has received $4.3 million in state grants since 2000 for their York factory – ostensibly to “create or retain jobs”.  Yet despite what should be a clear lesson, Pennsylvania’s two U.S. Senators – Bob Casey and Arlen Specter – are already scrambling to get another deal done (see their letter here).

Instead, consider what Harley Davidson officials have stated – they are considering the move because “York is not competitive long term … due to cost pressures,” but they are “exploring other possible locations within the U.S.”  This implies that the economic climate in Pennsylvania is unwelcoming, compared with other states.  There are two possibilities:

1) Harley officials, like Mario Lemieux, are bluffing.  They have no intention of moving, and are only angling for more taxpayer aid.  In which case, lawmakers would be foolish to oblige.

2) They are telling the truth – Pennsylvania’s economic climate isn’t good for them.  They would have plenty of evidence supporting this.  Unfortunately, that economic climate is bad for all Pennsylvania businesses.  Instead of offering new funding incentives specifically to benefit Harley Davidson, lawmakers should … wait for it … work to improve Pennsylvania’s economic climate.