The tech company's tax deal will grow local wages—but for who?

City Council recently voted to provide about $3.4 million in tax incentives over the next six years to Root Insurance, Columbus’s digital auto insurance tech “unicorn.”

While the spectacle of last year’s Amazon HQ2 bidding war has soured many on economic development incentives, such incentives can still be helpful for cities looking to entice businesses. Incentives are not costless, though, and companies like Root don’t take relocation lightly and may have stuck around without incentives. Foregone tax revenue spent on incentives is revenue not spent on local programs like safety, education and infrastructure.

Upjohn Institute Economist Timothy Bartik published a report last year that sheds some light on this tradeoff. He found that incentives tend to boost local wages as a whole, though the impacts are usually regressive, accruing mainly to high- and middle-income workers and decreasing wages for low-income workers because of decreased revenue for programs to support them.

Continue reading Rob Moore's latest "Local Politics" column at Columbus Alive.