Skip to main content

The major economic news in Chicagoland today is that Motorola Mobility (MMI), now wholly owned by Google, is cutting 4000 jobs worldwide.  700 of those job cuts will be made in Chicago’s northern suburb of Libertyville, IL.  This will reduce Motorola Mobility’s Illinois work force from 3000 to 2300.  The significance of that 2300 number is laid out below the fold.

When Motorola Mobility spun off as a separate company early in 2011, there was much concern that the company would pick up and move out of state.  To keep the jobs in Illinois, MMI was promised an $11 million dollar annual tax credit for $110 million overall, on the condition that they keep at least 2500 jobs in Illinois.  When Google bought MMI, the tax credit deal was extended to Google and Google agreed to the offer.

After today’s layoff announcement, MMI’s work force will fall to 2300, below the required 2500 Illinois jobs.  Google today acknowledged that the tax cuts would be suspended, although they did indicate more workers could be hired in the future.  The move was hailed as a cost cutting decision.

So there we have it.  Google could have chosen to keep 200 workers employed and keep the tax credits.  Instead, they chose to cut their labor costs and accept a tax increase.  If tax cuts were the only factor companies use to hire and fire people as the GOP so often claim, then Google would have kept the jobs.  They would have found newer productive roles for the workers, growing the company while paying fewer taxes.  Instead, Google chose to shrink the company and lose the tax credit.

Google has proven what we all know is true.  Companies focus on much more than just the tax rate when adding and cutting jobs.  Tax cuts alone do not by themselves create jobs.  And an economic policy focused only on tax cuts cannot guarantee economic growth.

Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags


More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site