by Bruce Walker
Michigan-based outdoor and recreation clothier Carhartt was granted $937,500 of taxpayer money to expand its facilities in Dearborn.
Gov. Gretchen Whitmer says the Michigan Economic Development Corp. investment will create 125 new jobs and spark a $4.67 million capital investment.
The company recognized $600 million in annual sales in 2021.
University of Michigan economics professor Chris Douglas said state taxpayers will pay $75,000 per job created.
“This subsidy isn’t the worst one I’ve seen. With that said, subsidies such as this often fail to deliver the number of jobs promised,” Douglas told The Center Square. “It will remain to be seen if all 125 jobs are created.”
Carhartt’s plans include expanding product design, digital marketing, customer care, and operations due to increased demand to the brand’s highly popular workwear, boots, and recreation apparel. A news release from the economic development arm noted the 125 new workers – a 19.4% increase of those working in the state already – would receive wages averaging $43.22 per hour plus benefits; at 2,080 hours annually, that’s a yearly take of just under $90,000. Additionally, the release said Carhartt had recently invested $32 million in three Dearborn facilities.
“Lawmakers ought to celebrate business expansion without feeling the need to contribute millions of taxpayer dollars,” Mackinac Center for Public Policy Economic Policy Director James Hohman told The Center Square. “We will all be better off when profit-seeking businesses expand in Michigan without special treatment.”
Carhartt was founded in Detroit in 1889. The majority of the company’s sales derive from its wholesale distribution network to retailers in North America and Europe. It also operates brick-and-mortar retail shops, e-commerce operations, employing 5,500 workers worldwide and 644 workers in Michigan.
“We’re excited to bring more high-paying jobs to Michigan,” Carhartt Chief Financial Officer Susan Telang said in a statement. “Our business continues to grow year over year and partnering with the MEDC allows us to expand our employee base by adding top talent and, at the same time, continue to invest in our home state where Carhartt was established in 1889.
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Bruce Walker is a regional editor at The Center Square. He previously worked as editor at the Mackinac Center for Public Policy’s MichiganScience magazine and The Heartland Institute’s InfoTech & Telecom News.
Photo “Carhartt Headquarters” by Dwight Burdette. CC BY 3.0.