NCPA - National Center for Policy Analysis


February 23, 2005

Over the last few decades, Arkansas' state government has grown so large that it has contributed to a loss of jobs in the manufacturing industry. Greg Kaza of the Arkansas Policy Foundation says a high tax burden -- particularly high taxes on capital investment -- has left the state at a competitive disadvantage. Consequently, businesses have chosen to relocate to less costly states.

Today, Arkansas has more jobs in state government than manufacturing, says Kaza:

  • According to the Arkansas Employment Security Department, there were 204,200 state government employees in November, compared to 203,400 in manufacturing.
  • By contrast, manufacturing employment in other states is significantly larger than in government; for instance, there are some 519,000 manufacturing jobs in Wisconsin, while there are only 406,000 in the state government.

Kaza suggests lower corporate or individual income tax burdens help drive manufacturing employment growth. Nevada, a state that has no corporate or income tax, has led the nation in manufacturing job growth (at 6.7 percent) since 2001.

Source: Greg Kaza, "'Everyone Does It'," Arkansas Policy Foundation, December 2004.


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